How much income tax will you save in the new regime post Budget 2025? Here’s the math | Mint

Budget 2025 Income Tax Changes: Finance Minister Nirmala Sitharaman proposed sweeping tax reforms for the middle class in the Budget 2025. From zero tax on income of up to ₹12 lakh to cutting the income tax rates proposed in the new tax regime, Budget 2025 came as a much needed relief for the India’s middle class.

Taxpayers with a normal income (excluding special rate income like capital gains) of up to ₹12 lakh will have no tax liability due to a rebate and reduced slab rates. Those earning ₹12 lakh will receive a tax benefit of ₹80,000, which covers 100% of their tax payable under existing rates. For an income of ₹18 lakh, the benefit is ₹70,000, covering 30% of the tax payable. Similarly, a person earning ₹25 lakh will get a benefit of ₹1,10,000, which accounts for 25% of their tax liability under the current rates.

Other tax reliefs

Threshold for TDS and TCS increased: Finance Minister Nirmala Sitharaman proposed to increase in the threshold for Tax Deduction at Source (TDS) on rent from Rs2.40 lakh per annum to Rs6 lakh per annum in her Budget 2025 speech. This effectively raises the monthly limit for TDS deduction on rent from Rs20,000 to Rs50,000, benefiting small taxpayers and easing compliance burdens.

Relief for Senior citizens: The finance minister has proposed to double the limit for tax deduction on interest for senior citizens from the present ₹50,000 to ₹1,00,000.

TCS on remittances: Tax Collected at Source (TCS) on remittances under the RBI’s Liberalized Remittance Scheme (LRS) has been increased from to Rs10 lakh from Rs7 lakh, and TCS on remittances for education purposes, where the remittance is out of a loan from a financial institution, has been removed.