Union Government Increases Income Tax Exemption Limit, Offers Relief to Middle Class
In a move aimed at providing relief to salaried individuals and the middle class, Finance Minister Nirmala Sitharaman announced a significant increase in the income tax exemption limit in the latest Union Budget. Under the revised tax regime, individuals with an annual income of up to ₹12 lakh will be exempt from paying income tax. The increase in the exemption limit is expected to benefit a large section of the population, particularly those in the middle-income group.
Additionally, when combined with the standard deduction, the total tax-free income limit rises to ₹12.75 lakh per year. This change is expected to significantly ease the financial burden on taxpayers, especially those in the salaried and middle-class segments.
Tax Deduction at Source (TDS) Limit Increase
As part of the budgetary reforms, the government also announced an increase in the Tax Deduction at Source (TDS) limit on interest income. The current TDS limit of ₹50,000 has been raised to ₹1 lakh, providing relief to those with higher interest income, especially senior citizens and individuals relying on fixed deposits and savings.
In another positive move for senior citizens, the exemption limit on rental income has been increased from ₹2.4 lakh to ₹6 lakh annually, further enhancing their financial security.
New Income Tax Slabs
The revised income tax slabs under the new tax regime are as follows:
- Up to ₹4 lakh – No tax
- ₹4 lakh to ₹8 lakh – 5%
- ₹8 lakh to ₹12 lakh – 10%
- ₹12 lakh to ₹16 lakh – 15%
- ₹16 lakh to ₹20 lakh – 20%
- ₹20 lakh to ₹24 lakh – 25%
- Above ₹24 lakh – 30%
These new tax slabs are designed to provide relief to taxpayers by reducing the overall tax burden. With these changes, the government aims to promote savings and investment, boost economic growth, and support the middle class in achieving financial stability.
Overall, the budget’s income tax reforms reflect a commitment to providing greater relief to individuals, particularly those with middle-income earnings, and offer a more equitable tax structure.
