No income tax payable up to Rs 12 lakh income

.

Finance Minister Nirmala Sitharaman fulfilled expectations and hopes of a major income tax relief as she presented the Union Budget for the financial year 2025-2026 on Saturday.

People with incomes of up to Rs 12 lakh will not have to pay a single rupee in income tax, the Finance Minister announced, as she also proposed rejigging the tax slabs under the new income tax regime.

According to the income tax changes proposed in the Budget, salaried employees would effectively pay no tax on incomes up to Rs 12.75 lakh after taking into account the benefit of standard deduction. This effective exemption limit earlier was Rs 7.75 lakh.

Nirmala Sitharaman also announced changes in the slab structure of the new income tax regime, expanding the first slab - attracting nil income tax - from Rs 0–3 lakh to Rs 0–4 lakh.

"I am now happy to announce that there will be no income tax payable up to income of Rs 12 lakh under the new regime," the finance minister said in Parliament as she presented a record eighth consecutive budget.