Latest Income Tax Slabs 2025-26: Tax Details for Earners Above Rs 12 Lakh Finance Minister Nirmala Sitharaman’s Announcement on Zero Tax and Marginal Relief
Latest Income Tax Slabs 2025-26: Understanding the New Tax Regime
In a significant move, Finance Minister Nirmala Sitharaman announced in Budget 2025 that individuals earning up to Rs 12 lakh will enjoy zero tax liability. This decision has brought relief to many taxpayers across the country. But what happens if you earn slightly above this threshold? Let’s break down the income tax slabs for 2025-26 and understand how marginal relief works for those earning between Rs 12 lakh and Rs 12.75 lakh.
Income Tax Slabs for FY 2025-26
The new income tax structure is designed to provide a clearer roadmap for taxpayers. Here’s a quick overview:
- Income up to Rs 12 lakh: 0% tax
- Income from Rs 12,01,000 to Rs 12,75,000: 5% tax
- Income from Rs 12,75,001 to Rs 15 lakh: 10% tax
Marginal Relief Explained
For individuals earning just above the Rs 12 lakh mark, the tax calculations can get a little tricky due to marginal relief provisions. If your income is, say, Rs 12,10,000, you would fall under the 5% tax bracket. However, the marginal relief ensures that you don’t end up paying more tax just because you crossed the Rs 12 lakh threshold.
To illustrate, let’s say your total income is Rs 12,10,000. Here’s how your tax liability would be calculated:
- Tax on Rs 12 lakh: 0
- Tax on Rs 10,000 (Rs 12,10,000 – Rs 12,00,000): Rs 500 (5% of Rs 10,000)
Thus, your total tax payable remains minimal, and the government’s intent is clear: to encourage taxpayers and alleviate financial burdens.
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Conclusion
The new income tax slabs for 2025-26 are designed to provide relief and clarity to taxpayers. Understanding the marginal relief mechanism can help you make informed financial decisions. Stay updated with Looffers.com for more tips and tricks to navigate the financial landscape!
