5 income tax relief measures announced by Nirmala Sitharaman in Budget 2025

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5 income tax relief measures in Budget 2025

1) No income tax for up to ₹ ₹12 lakh per annum

The most prominent tax relief measure in the Budget 2025 is the exemption of income tax for all those earning up to ₹12 lakh annually.

2) New tax slabs

The Budget 2025 introduces new tax slabs. Sitharaman said, “I propose to revise tax rate structures as follows: 0 to ₹4 Lakhs – nil, ₹4 Lakhs to ₹8 Lakhs – 5%, ₹8 Lakhs to ₹12 Lakhs – 10%, ₹12 Lakhs to ₹16 Lakhs – 15%, ₹16 Lakhs to ₹20 Lakhs – 20%, ₹20 Lakhs to ₹24 Lakhs – 25% and above ₹24 Lakhs – 30%.”

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3) Tax benefits

A tax payer in the new regime with an income of ₹12 lakh will get a benefit of ₹80,000 in tax. A person with income of ₹18 lakh will get a benefit of ₹70,000 in tax, and a person with an income of ₹25 lakh gets a benefit of ₹1.10 lakh.

4) Standard deduction

Under the new tax regime, salaried employees as well as pensioners get a standard deduction of ₹75,000, which raises the tax-free income limit to ₹12.75 lakh for salaried individuals, considering the revised ₹12 lakh nil-tax threshold announced in the budget.

However, for those opting for the old tax regime, the standard deduction remains unchanged at ₹50,000. The old regime does still continue to offer additional exemptions and deductions, especially those under Section 80C ( ₹1.5 lakh), Section 80D (health insurance), as well as HRA benefits.

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5) Rationalised TDS

The government also proposed to increase the annual threshold for tax deduction at source (TDS) on rent to ₹6 lakh from the current limit of ₹2.4 lakh.

This will reduce the number of transactions which are liable to TDS and benefit small taxpayers receiving small payments.