Key Budget Announcement on Income Tax: Increased Exemption Limit by Central Government

In a significant relief for salaried individuals and the middle class, the Union government has announced an increase in the income tax exemption limit in the latest budget. Finance Minister Nirmala Sitharaman declared that individuals with an annual income of up to ₹12 lakh would be exempt from income tax under the new tax regime. Additionally, when combined with the standard deduction, the total tax-free income limit rises to ₹12.75 lakh per year.

The minister also announced an increase in the tax deduction at source (TDS) limit on interest income. The current limit of ₹50,000 has been raised to ₹1 lakh. Furthermore, the exemption limit on rental income for senior citizens has been increased from ₹2.4 lakh to ₹6 lakh annually.
New Income Tax Slabs

    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%