Zero tax on income up to Rs 12 lakh; Modi Govt woos middle class ahead of Delhi election

New Delhi: In a relief to middle class and woo voters ahead of crucial Delhi elections, the Government today announced changes in the Income Tax slabs whereby zero tax will be payable for income up to Rs 12 lakh, up from Rs 7 lakh now.

“I am now happy to announce that there will be no income tax payable up to income of Rs 12 lakh (i.e. average income of Rs 1 lakh per month other than special rate income such as capital gains) under the new regime. This limit will be Rs 12.75 lakh for salaried tax payers, due to standard deduction of Rs 75,000,” Finance Minister Nirmala Sitharaman said while presenting the Union Budget for the year 2025-26.

Revised tax slabs and tax rates are as under:

Total income	Rate of tax
Upto Rs 4,00,000	Nil
From Rs 4,00,001 to Rs 8,00,000	5 percent
From Rs 8,00,001 to Rs 12,00,000	10 percent
From Rs 12,00,001 to Rs 16,00,000	15 percent
From Rs 16,00,001 to Rs 20,00,000	20 percent
From Rs 20,00,001 to Rs 24,00,000	25 percent
Above Rs 24,00,000	30 percent

Sitharaman also proposed to rationalize tax deduction limit for senior citizens which has been doubled from Rs 50,000 to Rs 1 lakh, while the annual limit of Rs Rs 2.40 lakh for TDS on rent increased to Rs 6 lakh.

With these revised slabs, individuals earning up to Rs 12 lakh per year will not be required to pay any income tax. The government expects these changes to improve financial security, boost consumer spending, and support economic growth as new slab will give benefit of at least Rs 30,000 and maximum up to Rs 1,10,000, the Minister said.