It is clear above that in the case of 12 lakhs or salary in case of salaryid, those who income up to Rs 12.75 lakh will not have to pay any tax at all. But those who earn more than this will be taxed. There are tax slabs for how that tax will be calculated. Nirmala Sitharaman has also announced a new tax slab and will also benefit those who earn more than 12 lakh rupees.
First of all take a look at the proposed tax slab. At the same time, we also look at the previous tax slab because it is necessary to know this to understand the whole thing.
New Tax Slab (2025-26)
Income Income Tax
0-4 lakh 0 percent
4-8 lakh 5 percent
8-12 lakh 10 percent
12-16 lakh 15 percent
16-20 lakh 20 percent
20-24 lakh 25 percent
30 percent above 24 lakhs
Old Tax Slab (2024-25)
Income Income Tax
0-3 lakh 0 percent
3-7 lakh 5 percent
7 to 10 lakh 10 percent
10-12 lakh 15 percent
12-15 lakh 20 percent
30 percent above 15 lakhs
Big relief to those who earn more
If you look at the last year’s slabs and new slabs, then it is clear that those earning above 12 lakhs have also got a big relief in income tax. Earlier, 30 percent tax was levied on income above 15 lakhs, but now only 15 percent tax will be levied on income up to 12-16 lakhs. 16-20 lakhs will be taxed at 20 percent, 25 percent on 20-24 lakh and 30 percent tax on income above 24 lakhs.
Income tax free means up to 12 lakhs
If this question is coming in your mind that when there is zero tax up to Rs 12 lakh, then why are these slabs on income above Rs 4 lakh, then why are these slabs, then understand the answer. Income tax slab occurs so that tax is calculated accordingly. The tax will also be calculated according to the slab for those who earn up to Rs 12 lakh, but here the government gives them a tax rebate under Section 87A of the Income Tax. Now the tax rebate has been reduced to 60 thousand rupees under section 87A for new tax regime. According to the slab, a tax of 60 thousand rupees will be made on the man’s manual of Rs 12 lakh, which will be forgiven as a rebate i.e. zero tax liability.
And to understand better, look at this chart issued by PIB, which is given above. It is known that there was no tax on income up to Rs 7 lakh earlier. Now understand the mathematics of income of more than 8 lakh rupees. If someone’s income is Rs 8 lakh, then according to the current slab, he/she would have to pay 30000 tax and according to the new slab, 20 thousand rupees, but that will be the benefit of the rebate i.e. zero tax. 40 thousand tax would be made according to the current slab on income up to 9 lakh. According to the new slab, 30 thousand taxes will be made and the rebate will also be 30000 i.e. zero tax. In this way, whatever tax will be made up to Rs 12 lakh, it will be forgiven in a way as a rebate.
Now if someone’s income is Rs 13 lakh, then he/she will have to pay tax-
- 0% + 4-8 lakh on 4 lakhs at 5% + 8-12 lakhs 10% + 12 to 13 lakhs on 15%
- That means 0+20000+40000+15000 = 75000 rupees tax
Similarly, 90 thousand rupees tax on 14 lakh income, 105000 rupees on 15 lakhs, 120000 rupees on 16 lakh rupees. According to the old tax slab, Rs 1 lakh 70 thousand would have to be paid for Rs 16 lakh, but according to the new slab, only 120000 rupees will have to be paid.
