PM Narendra Modi praised the budget and said- ‘This budget is going to fill the pockets of the common man’, income up to Rs 12 lakhs became tax free!

Union Finance Minister Nirmala Sitharaman presented the budget in Parliament today. During this, she made several announcements for different sectors. Also, in this budget, the middle class has been given a big relief. Tax up to Rs 12 lakh has been removed. Meanwhile, PM Narendra Modi said about the budget that this reason is a force multiplier. This budget will increase savings, investment, growth and consumption. I congratulate Finance Minister Nirmala Sitharaman and her entire team for this budget of the people. Usually the focus of the budget is on how the government’s treasury will be filled. But this budget is exactly the opposite of that. But how this budget will fill the pockets of the citizens of the country and how their savings will increase, this budget lays a very strong foundation for this.

Entry of private sector in nuclear energy

PM Modi said that promoting the private sector in nuclear energy is a historic decision. In the budget, priority has been given to all areas of employment in every way. Due to giving infrastructure status, the construction of big ships in India will be encouraged. Everyone knows that shipbuilding is the sector that provides maximum employment. Tourism is also the sector that provides maximum employment. This sector, which creates employment opportunities all around, will provide energy. Today, the country is moving ahead with the mantra of development as well as heritage. Concrete steps have been taken for this in this budget as well. Vinna Bharatam Mission has been launched for the conservation of one crore manuscripts.

What did PM Modi say on income tax?

He said that the announcement made for farmers in the budget will become the basis of a new revolution in the agriculture sector and the entire rural system. The limit of Kisan Credit Card being increased to Rs 5 lakh will help them more. In this budget, income up to Rs 12 lakh has been exempted from tax. Tax has also been reduced for people of all income groups. Our middle class, employed people whose income is fixed, such people are going to benefit from this. This exemption from income tax will become a huge opportunity for those who have got new jobs. This budget has a 360 degree focus on manufacturing, so that entrepreneurs get strengthened and MSMEs get strengthened, so that new jobs are created.

Finance Minister Nirmala Sitharaman today (February 1, 2025) presented the record 8th consecutive Union Budget. The Finance Minister said that no tax will be payable on income up to Rs 12 lakh. Giving a big gift to salaried taxpayers, Finance Minister Nirmala Sitharaman announced that no income tax will be payable on income up to Rs 12 lakh. About 85 percent of the 7.5 crore tax return filers will get relief as the government has given tax exemption to those with income up to Rs 12 lakh.

New Income Tax Slabs for FY 2025-26

Rs 0-4 lakh Nil
Rs 4-8 lakh 5%
Rs 8-12 lakh 10%
Rs 12-16 lakh 15%
Rs 16-20 lakh 20%
Rs 20-24 lakh 25%
Rs 24 lakh 30%

The Finance Minister has announced an increase in tax exemption under Section 87A. Due to this increase, resident individuals with taxable income up to Rs 12 lakh will have to pay zero tax. Under the new tax regime, salaried individuals with standard deduction benefit of Rs 75,000 will have to pay zero tax if taxable income does not exceed Rs 12.75 lakh. The existing income tax laws allow zero tax on income up to Rs 7 lakh in the new tax regime.

Understand in simple terms

Broadly speaking, total income up to Rs 13 lakh (including exemption of Rs 12 lakh, standard deduction of Rs 75,000 and marginal relief of around Rs 30,000) will be tax free. However, any income above this will attract tax on the entire income based on the revised slabs.

Now when income tax is calculated, it is divided into parts as per the slab rates. For example for those earning Rs 16 lakh annually, their income will be divided into four parts (Rs 0-4 lakh, Rs 4 lakh to Rs 8 lakh, Rs 8 lakh to Rs 12 lakh, Rs 12 lakh to Rs 16 lakh).

Zero- On income of Rs 4 lakh, no tax will be levied (this is called exemption. It applies to all irrespective of income level)- 5 per cent tax will be levied on income of Rs 4 lakh to Rs 8 lakh (tax of Rs 20,000 on this Rs 4 lakh income), 10 per cent tax (Rs 40,000) on income between Rs 8,00,001 to Rs 12,00,000, 15 per cent tax (Rs 60,000) on an additional Rs 4 lakh on income between Rs 12 lakh to Rs 16 lakh.

So a person earning Rs 16 lakh in the financial year 2025-26 will have to pay Rs 1,20,000, which is a gain of Rs 50,000 compared to the earlier tax rates and slabs.

So the tax slab for income below Rs 12 lakh is not applicable for those earning less than Rs 12 lakh. This is for tax calculation for those earning more than Rs 12 lakh in a year.