Mon Feb 03 20:50:00 IST 2025: ## Budget 2025 Sweetens New Tax Regime, Leaving Old Regime Intact

**NEW DELHI** – India’s Finance Minister Nirmala Sitharaman unveiled changes to the income tax structure in Budget 2025, primarily focusing on enhancements to the New Tax Regime. The aim is to simplify taxation and boost its appeal. Key changes include lower tax rates and a significant increase in the rebate under Section 87A, raising it from ₹25,000 to ₹60,000 for individuals earning up to ₹12 lakh (₹12.75 lakh for salaried individuals). This effectively makes income up to ₹12 lakh tax-free.

The New Tax Regime now offers the following slabs:

* 0-₹4,00,000: 0%
* ₹4,00,001-₹8,00,000: 5%
* ₹8,00,001-₹12,00,000: 10%
* ₹12,00,001-₹16,00,000: 15%
* ₹16,00,001-₹20,00,000: 20%
* ₹20,00,001-₹24,00,000: 25%
* ₹24,00,001 and above: 30%

While the New Regime simplifies the process, the existing Old Tax Regime remains unchanged, offering numerous deductions and exemptions under various sections (80C, 80D, 24(b), etc.) Taxpayers who have historically utilized these deductions may still find the Old Regime more beneficial. The Old Regime continues to offer a tax-free income limit of ₹5 lakh through rebates, with higher slabs attracting rates of 5%, 20%, and 30%.

The government’s decision to adjust the New Tax Regime instead of introducing a new system or modifying the Old Regime aims to provide greater flexibility and choice to taxpayers based on their individual circumstances and financial planning strategies. The Budget 2025 changes are intended to make the New Tax Regime a more attractive option for a larger segment of the population.

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