New Tax Regime 2025: More Money in Your Pocket, Less for the Taxman!

What’s Happening?

• Revised Income-Tax (No. 2) Bill, 2025 was introduced in Lok Sabha on August 11, 2025, after an earlier draft was withdrawn on August 8. The revised bill integrates over 285 recommendations from the Parliamentary Select Committee and stakeholder feedback. India BriefingWikipediaIndiatimes

• Passed by both Houses:

  • Lok Sabha approved it the same day.

  • Rajya Sabha cleared it on August 12, 2025.

Key Benefits of the New Tax Regime 2025

1. Zero Tax Up to ₹12.75 Lakh

Salaried individuals now pay no income tax on earnings up to ₹12.75 lakh (including the ₹75,000 standard deduction). This means more take-home salary every month.

2. Simplified & Lower Tax Slabs

The complicated maze of old slabs is gone. Now:

• 0% – up to ₹4 lakh

• 5% – ₹4 lakh to ₹8 lakh

• 10% – ₹8 lakh to ₹12 lakh

• 15% – ₹12 lakh to ₹16 lakh

• 20% – ₹16 lakh to ₹20 lakh

• 25% – ₹20 lakh to ₹24 lakh

• 30% – above ₹24 lakh

3. Bigger Section 87A Rebate

The maximum rebate has jumped to ₹60,000 from the earlier ₹12,500, putting more cash back in taxpayers’ hands.

4. Higher TDS/TCS Limits

• TDS on interest for senior citizens: ₹1 lakh/year

• TDS on rent: ₹6 lakh/year

• TCS on foreign remittances: ₹10 lakh/year

5. Tax-Free NSS Withdrawals

Withdrawals from the National Savings Scheme made after August 29, 2024, are now 100% exempt from tax.

Who Benefits the Most?

• Middle-class salaried employees without heavy deductions

• First-time job holders

• Senior citizens earning interest income

• Small business owners shifting to the new regime

Key Tag

• New Tax Regime 2025

• Income Tax Slabs India 2025

• Zero Tax till ₹12.75 Lakh

• Section 87A rebate 2025

• Budget 2025 tax changes

Bottom line: The New Tax Regime 2025 is a game-changer if you prefer simplicity over deductions. With higher tax-free limits and fewer compliances, this is the perfect time to rethink your tax planning strategy.