New tax system: After exemption of up to 12 lakhs, the salary of the taxpayer will increase by this much? this is the complete calculation

Income Tax New Rule: How much is Ravi’s salary going to increase? According to Ravi, his salary is Rs 1 lakh per month. Last year, Ravi had to pay Rs 71,500 as income tax annually on this salary under the New Tax Regime.

Income Tax New Rule: This time the central government has made a big change in the budget and made income up to Rs 12 lakh tax free under the new tax regime. People coming in this slab will see its effect in the salary coming today, which is going to increase.

For example, understand that Ravi is waiting for 1st May i.e. today, because salary comes in Ravi’s account on the first date of every month, but this time Ravi’s salary is going to increase without appraisal. Not only Ravi, there are lakhs of salaried people in the country, whose April salary is going to increase. Ravi also knows how much his salary is going to increase.

Actually, Ravi’s monthly salary is Rs 1 lakh, i.e. annual income is 12 lakh. Ravi had opted for the New Tax Regime last year as well, but now Ravi’s salary is going to increase only with the change of financial year, because in the budget this year, the government had given a big relief in income tax, now there will be no income tax on income up to Rs 12 lakh. Whereas till the financial year 2024-25, there was no income tax on income up to Rs 7 lakh under the New Tax Regime. Which has been increased to Rs 12 lakh from the financial year 2025-26.

Salary of those earning 1 lakh will increase by this much

Now let us know how much Ravi’s salary is going to increase, according to Ravi, his salary is Rs 1 lakh monthly, last year on this salary, Ravi had to pay Rs 71500 annually as income tax under the New Tax Regime, that is, Ravi had to pay Rs 5958 income tax every month. Which kept getting deducted from the salary till March 2025. But this money is going to be saved now. This amount is now going to increase in the salary of April.

Let us tell you, in Budget 2025, the central government has increased the amount of tax rebate under section 87A to Rs 60,000. Under the New Tax Regime (2025), on an income of 12 lakh, tax of Rs 52,500 is payable according to the tax slab. But under 87A, if tax rebate of Rs 52,500 is also available, then no tax is payable. Due to which Ravi is going to get Rs 5958 more in salary on 1st May, which is no less than any appraisal. Now the old tax regime is not very beneficial, if Ravi chooses the old tax regime then the annual income tax is Rs 1,63,800, in which he can take advantage of deduction, but then he will have to invest a lot of money. Whereas zero tax is applicable on this income in the new tax regime.

No tax on income up to Rs 12.75 lakh

New tax regime has come into effect from 1 April 2025. No tax will have to be paid on income of Rs 12 lakh. Apart from this, the benefit of standard deduction of Rs 75000 is also going to be available in the new tax regime. That is, those whose salaried income is Rs 12.75 lakh annually, they will not have to pay any income tax. Let us tell you, before this, there was no income tax on income up to Rs 7 lakh in the new tax regime. The middle class is to benefit the most from this.

Now those whose salary is up to Rs 12.75 lakh do not have to think about income tax. Under section 87A, there was already a tax exemption on income up to Rs 7 lakh, which has now been increased to Rs 12 lakh. Let us understand with an example… If someone’s salary was more than Rs 7.75 lakh in the last financial year, and they had chosen the new tax regime, then they would have had to pay income tax in any case. But this year, they will not have to pay any tax, meaning the amount they paid as income tax last year will be saved directly this year.

Now the new tax regime is beneficial

It is worth noting that the financial year 2025-26 has started from April 1, 2025, and the ‘new tax regime’ will be the default option. However, the old tax regime will still exist. If it is beneficial based on your income and deductions, then you can choose it. Especially employed people can opt for it while filing their ITR.

Finance Minister Nirmala Sitharaman says that with the change in the new tax slab, now one crore taxpayers will not have to pay any tax. This simply means that now 9 out of 10 salaried persons will not have to pay income tax. According to CBDT, in the financial year 2024-25 itself, more than 75 percent of the people have adopted the new tax regime, and now when income up to Rs 12 lakh has also been made tax free, then after this 90 percent to 97 percent of taxpayers can join this new tax system.

For whom can the old tax regime still be beneficial?

Now the old scheme will be beneficial only for those who claim deduction under Chapter 6-1. Those who come in the salary class, who get HRA, and are also paying home loan. That is, those who invest in life insurance, mutual funds, house rent, children’s school fees, home loan, medical insurance, NPS in income tax can save tax by taking advantage of deduction. But now more than 95 percent of people will shift to the new tax regime.

The post New tax system: After exemption of up to 12 lakhs, the salary of the taxpayer will increase by this much? this is the complete calculation first appeared on informalnewz.

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