Finance Minister Nirmala Sitharaman delivered a historic relief to India’s middle class in the Union Budget 2025, announcing that under the new tax regime, income up to ₹12 lakh (₹12.75 lakh with standard deductions) will be tax-free. Revised slabs now impose a 5% tax on ₹4-8 lakh income, 10% on ₹8-12 lakh, and 15% on ₹12-16 lakh, significantly easing the tax burden.
The Budget also unveiled a rationalized TDS regime, doubling the senior citizens’ tax deduction limit to ₹1 lakh and extending the deadline to file updated returns to four years. Additionally, the government will introduce a new, simplified Income Tax bill next week, reducing complexity and compliance burdens.
Other key reforms include raising the TCS limit on remittances to ₹10 lakh and tax exemptions on EV and mobile phone battery components. These measures aim to boost disposable income, savings, and investment.
