1. No Tax up to ₹12 Lakh

Under the new tax regime, individuals with an annual income of up to ₹12 lakh will enjoy zero income tax. This is made possible through a combination of revised tax slabs and a generous tax rebate.

2. Tax Rebate

A tax rebate is available for taxpayers earning up to ₹12 lakh, effectively eliminating their tax liability.

3. Revised Tax Slabs

The new tax regime introduces the following income tax slabs:

• 0 - 4 lakh rupees: Nil
• 4 - 8 lakh rupees: 5%
• 8 - 12 lakh rupees: 10%
• 12 - 16 lakh rupees: 15%
• 16 - 20 lakh rupees: 20%
• 20 - 24 lakh rupees: 25%
• Above 24 lakh rupees: 30%

4. Example: ₹13 Lakh Income

An individual earning ₹13 lakh annually will have a tax liability of ₹15,000 after applying the rebate.

5. Focus on the Middle Class

The new tax regime aims to reduce the tax burden on the middle class, providing them with increased disposable income.

6. Benefits Across Income Levels

This new tax structure is designed to benefit all taxpayers by adjusting the slabs and rates, including those with incomes above ₹12 lakh.

7. Reduced Tax Liability

The changes in the tax regime significantly lower the tax burden, ensuring that taxpayers retain more of their earnings, which can enhance household consumption, savings, and investment.

8. Tax Benefit Examples

Taxpayers will experience substantial benefits under the new system. For instance:

• A person with a ₹12 lakh income will receive a tax benefit of ₹80,000.
• An individual earning ₹18 lakh will benefit by ₹70,000.
• Someone with a ₹25 lakh income will enjoy a benefit of ₹1,10,000.

9. Revenue Forgone

Due to these tax proposals, the government is expected to forgo approximately ₹1 lakh crore in direct taxes and ₹2,600 crore in indirect taxes.

10. New Income Tax Bill

The forthcoming income tax bill will be clear, direct, and simple to understand, reducing the complexity of the current law by nearly half in terms of both chapters and words. This will lead to greater tax certainty and reduced litigation.