Q1. What is the ‘New Regime’?
The New Regime offers lower tax rates with wider income slabs but limits deductions. However, specific deductions such as 80JJAA, 80M, and standard deductions are still available.
Q2. What are the tax slabs in the earlier new regime?
The Finance (No.2) Act, 2024 defined the following tax slabs for individuals, Hindu Undivided Families, and certain other entities:
| Total Income (Rs.) | Tax Rate |
|---|---|
| Up to 3,00,000 | Nil |
| 3,00,001 to 7,00,000 | 5% |
| 7,00,001 to 10,00,000 | 10% |
| 10,00,001 to 12,00,000 | 15% |
| 12,00,001 to 15,00,000 | 20% |
| Above 15,00,000 | 30% |
Q3. What are the new slabs in the proposed new regime introduced by Finance Bill, 2025?
| Total Income (Rs. In Lacs) | Tax Rate |
|---|---|
| 0 - 4 | 0% |
| 4 - 8 | 5% |
| 8 - 12 | 10% |
| 12 - 16 | 15% |
| 16 - 20 | 20% |
| 20 - 24 | 25% |
| More than 24 | 30% |
Q4. What is the tax benefit for different categories of taxpayers (0-12 lacs)?
The proposed tax regime reduces tax liability compared to the existing regime. The following table provides a comparative view:
| Total Income (Rs.) | Tax as per existing rates | Tax as per proposed rates | Benefit of Rate/Slab | Rebate Benefit | Total Benefit | Tax Payable under new regime |
|---|---|---|---|---|---|---|
| 8,00,000 | 30,000 | 20,000 | 10,000 | 20,000 | 30,000 | 0 |
| 9,00,000 | 40,000 | 30,000 | 10,000 | 30,000 | 40,000 | 0 |
| 10,00,000 | 50,000 | 40,000 | 10,000 | 40,000 | 50,000 | 0 |
| 12,00,000 | 80,000 | 60,000 | 20,000 | 60,000 | 80,000 | 0 |
Q5. What is the maximum total income for which tax liability is NIL?
Under the proposed new tax regime, the maximum total income for which tax liability is NIL is Rs. 12 lakhs.
Q6. How can taxpayers claim the benefit of NIL tax liability?
The benefit is available only in the new tax regime, which is now the default. Taxpayers must file their return (ITR) to avail of this rebate; no additional steps are required.
Q7. Which category of persons benefits from the change in tax slabs?
The new tax regime applies to individuals, Hindu Undivided Families, associations of persons (excluding cooperative societies), bodies of individuals, and artificial juridical persons.
Q8. How does a person with an income of Rs. 12 lakh benefit?
Previously, a tax of Rs. 80,000 was payable in the new regime. Now, tax liability is NIL for the same income.
Q9. Has the limit for NIL tax payments increased?
Yes, the limit has increased from Rs. 7 lakh to Rs. 12 lakh, benefiting nearly one crore taxpayers who previously paid tax amounts ranging from Rs. 20,000 to Rs. 80,000.
Q10. What is the difference between rebate and marginal relief?
Rebate is a tax deduction available to those with income up to Rs. 12 lakh. Marginal relief ensures that those earning slightly above Rs. 12 lakh do not pay disproportionately higher tax.
