NO TAX TO 15 PERCENT SLAB: what is the math?
In the new budget, Finance minister Nirmala Sitharaman has given a big relief to the taxpayers on saturday (February 1, 2025). On an annual income of Rs 12 lakh, that is, those whose salary is one lakh rupees per month, will have to pay zero tax. You will also be happy to know that those earning Rs 12 lakh 75 thousand will also not have to pay any tax. However, if your salary increases by even one rupee, then 15 percent tax will have to be paid.
Taxpayers will get this benefit under standard deduction. The limit of standard deduction was increased from Rs 50 thousand to Rs 75 thousand last year. In such a situation, if the salary is Rs 12 lakh 75 thousand annually, then zero tax will have to be paid. However, if your salary increases by even one rupee from 12 lakh 75 thousand, then you will come in the 15 percent tax slab.
Standard deduction is the amount which is deducted directly from your income and the remaining salary is taxed according to the tax slab. Suppose if your annual salary is Rs 10 lakh and a standard deduction of Rs 50,000 is made from it, then the tax will be levied only on Rs 9,50,000.
Last year in 2024, nirmala sitharaman gave a big gift in the new tax regime by increasing the limit of standard deduction and the limit was increased from Rs 50,000 to Rs 75,000. Suppose if someone's salary is Rs 1 lakh, then under the new tax slab, his tax liability is Rs 80,000, but by adding Rs 12 lakh and standard deduction of Rs 75,000, only Rs 25,000 will be taxed on Rs 13 lakh.
If even one rupee increases on the salary of Rs 12 lakh 75, then you will come in the 15 percent tax slab. In the new regime tax slab, 15 percent tax will be levied on those earning 12 lakh to 16 lakh salary. There is zero tax up to Rs 4 lakh, 5 percent tax on Rs 4 lakh to 8 lakh, 10 percent tax on Rs 8 lakh to 12 lakh, 15 percent tax on Rs 12 lakh to 16 lakh, 20 percent tax on Rs 16 lakh to 20 lakh, 25 percent tax on Rs 20 lakh to 24 lakh and 30 percent tax on more than Rs 24 lakh.
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