Vikrant Shekhawat : Feb 02, 2025, 06:00 AM
Union Budget 2025: Finance Minister Nirmala Sitharaman presented the country's general budget on Saturday, in which she has given a big relief to the taxpayers by announcing tax exemption on annual income up to Rs 12 lakh. This means that people who earn up to Rs 12 lakh annually will not have to pay any kind of income tax. Let us know when taxpayers will benefit from this decision.Taxpayers got relief in the budgetIn the General Budget 2025, the Finance Minister clarified that the government is planning to introduce the new tax law next week. According to the new budget, no tax has been imposed on income up to Rs 12 lakh. Not only this, if the standard deduction of Rs 75 thousand is also added to it, then the tax liability on total income up to Rs 12.75 lakh will be zero.When will the tax exemption be applicable?The Finance Minister has made it clear that this exemption will not be applicable with immediate effect. The new rules regarding income tax will come into effect from April 1, 2025. However, the actual benefit of this will be available to the taxpayers when they file their Income Tax Return (ITR) in the assessment year 2026-27. That is, this tax exemption will be applicable on the income of the financial year 2025-26.Effect of the new tax regimeThis tax exemption will be applicable only under the new tax regime. Taxpayers who have adopted the old tax regime will not get the benefit of this exemption. This move of the government has brought relief to the middle class and upper-middle class taxpayers, so that they will have more funds available for spending and investment.Effect on the economyThis decision will increase the purchasing power of the common citizens, which will boost consumer spending in the market. Along with this, the government hopes that tax compliance rates will also improve due to this relief.ConclusionThis tax exemption announced by Finance Minister Nirmala Sitharaman is a relief news for millions of taxpayers. However, it is still some time before it is implemented and taxpayers will get its benefits only after the financial year 2025-26. After the implementation of the new tax rules, taxpayers will need to re-determine their investment and financial planning.