Union Budget 2025: New vs Old Tax Regime Comparison and Tax-Free Income up to Rs 12 Lakh
| Aspect | Details |
|---|---|
| Budget Announcement | Union Budget 2025 introduced revised income tax slabs under the new tax regime. |
| Tax-Free Income Threshold | Income up to Rs 12 lakh is tax-free due to rebates. |
| Standard Deduction | Rs 75,000 standard deduction increases rebate threshold to Rs 12.75 lakh. |
| Rebate Details | - Rs 10,000 rebate for income of Rs 8 lakh.- Rs 80,000 rebate for income of Rs 12 lakh. |
| Tax Calculation (Rs 16 Lakh) | - Rs 0-4 lakh: No tax.- Rs 4-8 lakh: 5% (Rs 20,000).- Rs 8-12 lakh: 10% (Rs 40,000).- Rs 12-16 lakh: 15% (Rs 60,000).- Total Tax: Rs 1,20,000 (Rs 50,000 less than old regime). |
| Tax Calculation (Rs 50 Lakh) | - Total Tax Liability: Rs 10,80,000.- Savings: Rs 1,10,000 compared to old regime. |
| Old Tax Regime Status | Not discontinued; offers deductions under Section 80C, HRA, and home loan interest. |
| Adoption Rate | 75% of taxpayers have shifted to the new tax regime. |
| Phase-Out Plan | Government expected to gradually phase out the old tax system. |
| Regime Comparison (Rs 16 Lakh with Rs 4 Lakh Exemptions) | - Old regime: Taxable income Rs 12 lakh, tax Rs 1,72,500.- New regime: Tax Rs 1,20,000, saving Rs 52,500. |