In the Budget 2025-26, Finance Minister Nirmala Sitharaman announced a major relief for taxpayers by making income up to Rs 12 lakh tax-free.
Additionally, the time limit for filing ITR (U) has been extended from 2 years to 4 years.
This means that if you have filed an incorrect income tax return, you now have 4 years to correct it.
These announcements were made by the Finance Minister towards the end of her budget speech and are expected to benefit the general public, especially the middle class.
Finance Minister’s Major Announcement for the Middle Class
In her budget announcement, Finance Minister Nirmala Sitharaman has provided significant relief to the middle class by making income up to Rs 12 lakh tax-free.
Along with this, new tax slabs have been introduced, which will offer substantial benefits to the middle class.
Tax slabs as per the new tax regime
- Income up to Rs 4 lakh = 0% tax
2. Rs 4 lakh to Rs 8 lakh = 5% tax
3. Rs 8 lakh to Rs 12 lakh = 10% tax
4. Rs 12 lakh to Rs 16 lakh = 15% tax
5. Rs 16 lakh to Rs 20 lakh = 20% tax
6. Rs 20 lakh to Rs 24 lakh = 25% tax
7. Above Rs 24 lakh = 30% tax
- No income tax on earnings up to Rs 12 lakh (equivalent to Rs 1 lakh per month).
- For salaried taxpayers, the limit is Rs 12.75 lakh (which includes a standard deduction of Rs 75,000).
Know the new announcements
The Finance Minister has made significant changes to the ITR and TDS limits.
The TDS limit has been raised to Rs 10 lakh. In a major announcement for senior citizens, the time limit for filing income tax returns has been extended to four years.
Additionally, the tax exemption for senior citizens has been doubled, increasing from Rs 50,000 to Rs 1 lakh.
The fiscal deficit forecast is also positive
The fiscal deficit for the financial year 2025 is set at 4.8%, and for the financial year 2026, it is estimated to be 4.4%.