New Delhi: The government has put “substantial amount of money” in hands of people through rejig of I-T slabs in the Budget and an additional 1 crore people will pay no tax due to hike in tax rebate to Rs 12 lakh per annum, Finance Minister Nirmala Sitharaman said on Saturday.
The 2025-26 Budget hikes the tax rebate available to individual taxpayer to Rs 12 lakh from next fiscal, from Rs 7 lakh currently.
“One crore more people will pay no income tax due to hike in rebate to Rs 12 lakh,” Sitharaman said at the post-Budget press conference.
“Government has put substantial amount of money in hands of people” through I-T rate rejig, she said, adding that the government has responded to the voice of people.
The Budget has revised the tax slabs for computing tax liability on income earned in 2025-26 for those with income of more than Rs 12 lakh and filing ITR under new tax regime.
Under the new slab, income of up to Rs 4 lakh will be exempt. A 5 per cent tax will be levied for income earned between Rs 4-8 lakh, 10 per cent for Rs 8-12 lakh, 15 per cent for Rs 12-16 lakh.
A 20 per cent income tax will be levied on income between Rs 16-20 lakh, 25 per cent on Rs 20-24 lakh and 30 per cent above Rs 24 lakh per annum.
“We have reduced tax rates to benefit the middle class,” Sitharaman added.
Finance Secretary Tuhin Kanta Pandey said tax bouyancy of 1.42 is expected in next fiscal, lower than 2 in current fiscal.
“We have assumed a moderate tax revenue bouyancy looking into the sacrifice of revenue (on account of rebate),” Pandey said.
He said 75 per cent of the income tax filers have already moved to the new income tax regime. “We expect every taxpayer to shift eventually.”
