In a major relief for India's middle class, the Union Budget 2025-26 has introduced a significant overhaul of the personal income tax structure under the new tax regime. Union Finance Minister Nirmala Sitharaman announced that the nil tax slab has been raised from Rs 7 lakh to Rs 12 lakh. This will provide major relief to taxpayers.
The revised tax structure aims to boost household consumption, savings, and investment by increasing disposable income. The government has also recalibrated tax slabs and rates to ensure a more progressive taxation system.
The move is expected to significantly benefit salaried professionals and small businesses owners, offering them greater financial flexibility. No income tax will be payable upto Rs 12 lakhs income other than for specified special rates income, under the new tax regime.
“The middle class provides strength for India’s growth. Under Prime Minister Modi’s leadership, we have consistently reduced their tax burden. From raising the nil tax slab to Rs 2.5 lakh in 2014, to Rs 5 lakh in 2019, and Rs 7 lakh in 2023, our government has demonstrated its trust in middle-class taxpayers,” said Minister Nirmala Sitharaman.