Budget 2025 Updated Income Tax Slab Rates
The income tax system is a form of direct taxation that operates on a progressive scale, meaning that as an individual’s income increases, the applicable tax rate also rises. The Income-tax Act of 1961 establishes two distinct tax frameworks: the traditional system, which provides taxpayers with various deductions and exemptions, and the newer system, which features reduced tax rates but does not allow for exemptions.
Note: No income tax is levied on income up to Rs. 12,00,000.
| Income Range (Rs.) | Tax Rate |
|---|---|
| Rs. 4,00,001 to Rs. 8,00,000 | 5% |
| Rs. 8,00,001 to Rs. 12,00,000 | 10% |
| Rs. 12,00,001 to Rs. 16,00,000 | 15% |
| Rs. 16,00,001 to Rs. 20,00,000 | 20% |
| Rs. 20,00,001 to Rs. 24,00,000 | 25% |
| Above Rs. 24,00,000 | 30% |
In conclusion, the progressive structure of the income tax system ensures that individuals contribute to government revenues based on their earnings, promoting fairness and equity. The two tax regimes offer flexibility, allowing taxpayers to choose between lower tax rates without exemptions or a system with deductions. With no tax levied on income up to Rs. 12,00,000, the tax framework provides relief to lower and middle-income earners while ensuring higher contributions from those with higher incomes. This structured approach balances revenue generation with financial ease for taxpayers.
Note:- Refer to Incometaxindia official website.