Budget 2025 New Tax Slabs: Big Relief for the Middle Class; Here's How You'll Be Taxed

Budget 2025 introduces new tax slabs, offering big relief to the middle class with significant tax rebates and reductions. Here’s how you will be taxed and what this means for you.
  • Amit Diwan
  • Editorial
  • Updated - 2025-04-01, 10:13 IST
budget 2025 new tax slabs

In a move that’s set to bring smiles to millions, Finance Minister Nirmala Sitharaman has unveiled a major overhaul of the income tax system in the Union Budget 2025. The new tax slabs, designed to ease the burden on the middle class, promise a simpler and fairer way to pay taxes. Starting April 1, 2025, these changes could mean more money in your pocket but only if Parliament gives the green light.

Budget 2025 New Tax Slab: How You Will Be Taxed

The updated tax structure introduces new income brackets with lower rates, making it easier for individuals to plan their finances. Here’s the breakdown:

Income Range (in Rs)

Tax Rate (%)

Up to 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

 24%

Above 24,00,001

 30%

The biggest highlight? A higher tax rebate under Section 87A means if your taxable income is up to Rs 12 lakh, you won’t owe any tax. For salaried individuals, this benefit stretches even further—up to Rs 12.75 lakh, thanks to the standard deduction of Rs 75,000.

Budget 2025 Old Tax Slab Comparison

Here’s a quick look at how the new slabs stack up against the old ones:

Income Range (in Rs)

Income Range (in Rs)
Up to 3,00,000

0%

3,00,001 - 7,00,000

 5%

7,00,001 - 10,00,000

 10%

10,00,001 - 12,00,000

 15%

12,00,001 - 15,00,000

 20%

15,00,001 and above

 30%

The new system is a win for the middle class, especially those earning between Rs 4 lakh and Rs 12 lakh, who’ll see a noticeable drop in their tax bills.

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Budget 2025: What Does This Mean for Middle Class

For the average taxpayer, this budget is a breath of fresh air. Lower tax rates and higher rebates mean more disposable income, which could help families manage rising costs and save for the future.

Experts are calling it a game-changer. Sushanto Mitra, CEO of Lead Angels, says, “The budget’s focus on simplifying taxes and supporting startups is a win-win. It eases the financial pressure on individuals while encouraging innovation.”

Hanuman Tripathi, Partner at Lead Angels, adds, “With better access to funding and fewer compliance hurdles, startups can now focus on growth instead of paperwork.”

The budget isn’t just about tax cuts. It also aims to strengthen healthcare and support startups. Dr Apurba Ganguly, Founder of Nano Phyto Care & bioGAN, highlights, “The increased focus on digital health and preventive care will transform patient outcomes and drive innovation.”

Abhi Sinha, Co-Founder of HealSpan, agrees, “Expanding health coverage and improving data security will make healthcare more accessible and trustworthy for millions.”

Yateesh Wahaal, Director, M3M India, “We applaud Finance Minister Nirmala Sitharaman for presenting a visionary Budget 2025 that emphasizes infrastructure development and urban growth, especially in Tier 2 and Tier 3 cities. The Udaan Yojana will be a game-changer by improving connectivity and unlocking economic potential. The national framework for Global Capability Centers in these cities will enhance talent availability and foster industry collaboration, creating a strong investment climate.”

Budget 2025 is more than just numbers, it’s a step toward a fairer, more inclusive economy. By easing the tax burden on the middle class and investing in critical sectors like healthcare and startups, the government is laying the groundwork for long-term growth and stability.

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