What's New

Nil Tax Slab Increased to ₹12 Lakh Limit

Why in the news?

The Union Budget 2025 raised the Nil Tax Slab to ₹12 lakh, offering tax-free income up to ₹12.75 lakh for salaried individuals, along with new tax slabs to reduce the financial burden on taxpayers.

Key Highlights:

• Finance Minister Nirmala Sitharaman presented the first full-fledged budget of the NDA government’s third term in the Lok Sabha.
• The Nil Tax Slab has been extended to cover annual incomes up to ₹12 lakh.
• Salaried individuals can avail a ₹75,000 standard deduction, making incomes up to ₹12.75 lakh tax-free.

Revised Tax Structure

• New tax slabs were introduced under the new tax regime.
• Income up to ₹4 lakh will not attract any tax.
• Additional tax slabs offer structured benefits for different income categories.

Significance and Impact

• The tax revisions aim to boost disposable income for the middle class, promoting higher consumption.
• It provides relief for salaried individuals by reducing their tax burden.
• The restructuring of tax slabs aligns with the government’s focus on taxpayer welfare and economic growth stimulation.

Union Budget 2025-26: Key Highlights

Theme & Focus Areas

• Theme: “Sabka Vikas”
• Focus: Zero poverty, quality education, healthcare, skilled employment, women’s economic participation, and farmers’ prosperity.

Growth Engines of Development

• Agriculture: PM Dhan-Dhaanya Krishi Yojana, Kisan Credit Card limit raised to ₹5 lakh.
• MSMEs: ₹2 crore loans for SC/ST & women entrepreneurs.
• Investment: ₹1.5 lakh crore interest-free loans for states.
• Exports: BharatTradeNet (BTN) for seamless digital trade.

Tax Reforms

• No tax up to ₹12 lakh; ₹75,000 standard deduction for salaried individuals.

New Schemes

• PM SVANIDHI: UPI-linked credit card loans.
• Nuclear Energy Mission: ₹20,000 crore for Small Modular Reactors.

These budgetary changes reflect a strategic move to improve public purchasing power and strengthen the overall financial ecosystem of the country.