If someone told you last year that earning ₹12 lakh could be completely tax-free in India, you'd probably laugh it off. But here we are in 2025, and the income tax India 2025 rules have turned this dream into reality for millions of taxpayers.
Gone are the days when no tax up to 7 lakh was the gold standard. The new income tax regime in India has completely revolutionized the game, and if you're still thinking in terms of the old ₹7 lakh limit, you're leaving money on the table. If you’d like more detailed information,See Auditfiling.
The Union Budget 2025 introduced significant changes to the income tax slabs under the new tax regime. For the financial year 2025–26 (AY 2026–27), the government has restructured the tax slabs to offer progressive taxation and greater relief to taxpayers.
At auditfiling.com, we are committed to providing you with accurate, up-to-date information and services to help you navigate the complexities of income tax filing, audits, and compliance.
| Income Range | Tax Rate | What You Pay |
| Up to ₹4,00,000 | 0% | Nothing |
| ₹4,00,001 - ₹8,00,000 | 5% | ₹5 on every ₹100 |
| ₹8,00,001 - ₹12,00,000 | 10% | ₹10 on every ₹100 |
| ₹12,00,001 - ₹16,00,000 | 15% | ₹15 on every ₹100 |
| ₹16,00,001 - ₹20,00,000 | 20% | ₹20 on every ₹100 |
You're probably thinking, "This sounds too good to be true." Let me break down exactly how income tax on 12 LPA salary can be zero:
Great question! The Section 87A rebate 2025 used to make ₹7 lakh completely tax-free, and it was revolutionary at the time.
Old vs New: The Comparison
The ₹7 Lakh Era:
Basic exemption: ₹2.5 lakh
Section 87A rebate covered the rest
Total tax-free: ₹7 lakh max
The ₹12 Lakh Revolution:
Basic exemption: ₹4 lakh
Enhanced rebates and deductions
Total tax-free: ₹12+ lakh possible
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