[humyum]

Only on the surface this looks like a good move. If you have HRA, 80C, Mediclaim, Housing Loan Interest etc to claim, you are better off in the old regime.

[searacer932]

Originally Posted by Revvatron

I get that but can't understand if salary is 15lacs then whats the point of 0-4 or 4-8 lacs slabs. Aren't they pointless since <12 lacs are not taxabale anyways.

I know it's a bit confusing, let me try to explain it to the best of my capability

if the income is >12 lakhs then income tax is applicable and you will need to pay income tax as per the slabs starting from 4 lacs.

So, you will pay a % for 4 to 8 and another % for 8 to 12 and then so on.

If the income is <=12 then no income tax on the entire amount.

[DCEite]

This extra upto 9000 per month in the hands of middle/upper middle class salaried employee is a good move and going to give boost to consumption, which in turn help the otherwise slow moving economy.

A balanced budget finally after a long long time. All previous budgets were either too poor oriented or too ultra rich oriented, leaving out the middle class in dismay.

This one has something for everyone, and the ruling party finally cozying up to its traditionally biggest patron the middle class.

[Chetan_Rao]

Originally Posted by Revvatron

I get that but can't understand if salary is 15lacs then whats the point of 0-4 or 4-8 lacs slabs. Aren't they pointless since <12 lacs are not taxabale anyways.

Everyone's taxes get calculated with the same new proposed slab rates to begin with, from the first reported rupee earnt.

Once that's done, for people with taxable income up to 12L, the tax payable bit gets offset via a rebate, so that person's tax liability becomes net zero. There's also marginal benefits like before, so a borderline case doesn't get unduly penalised (e.g. someone with 12.xxL income).

The proposed 12L number is an increase from the current 7L (people with taxable income upto 7L pay net zero tax after rebates as it stands today).

The table provides a good illustration: look at the calculation for 12L Vs. 16L. 12L chap gets a rebate equal to tax payable under new rates, making liability net zero. 16L guy gets taxed on new proposed slabs, he gets no rebate but still saves money based on new slab calculations.

12L chap:
Tax at current slabs: 80k
Tax at proposed slabs: 60k
Slab change saving: 20k
Rebate: 60k
Net tax payable: 0
Total benefit: 80k

16L chap:
Tax at current slabs: 1.7L
Tax at proposed slabs: 1.2L
Slab change saving: 50k
Rebate: 0
Net tax payable: 1.2L
Total benefit: 50k

[PearlJam]

Originally Posted by sups

https://www.ndtv.com/india-news/budg...mainnavigation

I guess there should also be some more savings due to lower health and education cess, due to reduced tax?

[mrbaddy]

Originally Posted by humyum

Only on the surface this looks like a good move. If you have HRA, 80C, Mediclaim, Housing Loan Interest etc to claim, you are better off in the old regime.

A rough comparison for a 36 lakhs net take home salaried individual with a monthly breakup as below.

Basic: 150,000
HRA: 75,000
Others: Rest in Others.

Claiming House Rent: 75,000 per month and not using any other deduction except 80C (all of it covered by EPF contribution considering the salary above).

Old Regime: 6.41 lakhs
New Regime: 6.63 lakhs.

If you add like you suggested Mediclaim (7800 benefit on 25k premium), NPS (15k benefit for 50k deposit) & Housing Loan Interest (62,400 benefit on 2 lakhs interest payment), then those benefits add up as well. However during the speech today, it was mentioned about 2 home properties now can be self-occupied with all conditions being removed. Hopefully they clarify this further in next week's new income tax bill and gets self-occupied housing loan interest benefit to New Tax Regime as well.


Personally, I like the New Tax Regime which is simplifying and making it easy to understand and avoid all the confusion/complexity that is there in the old Tax regime. Old Tax Regime also encourages a lot of cheating mindset among individuals by claiming false deductions under the various sections which can be avoided.

[Capri89]

Find below link to calculate income tax for FY 2025-26 post budget 2025 proposals.

https://www.moneycontrol.com/persona...tax-calculator

[pram_ind]

I am still in Old tax regime and my tax is calculated after cutting the installment amount of Company leased car.

Is it applicable to new TAX regime too?

[Ananthang]

Originally Posted by pram_ind

I am still in Old tax regime and my tax is calculated after cutting the installment amount of Company leased car.

Is it applicable to new TAX regime too?

To my knowledge your car lease amount is shown as deductible from salary and hence the net salary becomes less which is the used for taxation. But other seniors and auditors can confirm

[hothatchaway]

Many of us are elated by the tax cuts, lets slice and dice the tax base in a different way, the results are quite revealing.

As per an infographic in the Times of India today, 7% of farmer households in rural India are 'rich', with an annual income exceeding 25 L/annum. A further 18% are 'middle class', ie income between 11.6 L - 25 L/annum. Needless to say, not only does this segment not pay any taxes but are actually recipients of sarkari doles like the PM kisan yojanas and the like. 29% of the wealthy farmers own cars and tractors.

If we delve a little deeper and take the last census count of the total number of households (HH) in India of 30 crores (urban + rural) as base -

Of the 20 crore rural HHs in India (68% of India live in villages)
8 crore HHs are engaged in farming, of this
0.5 crore HHs make more than 25 lakhs/annum but pay no tax
1.5 crore HHs make between 25 lakhs and 11.6 lakhs/annum but pay no tax

Coming back to the folks who actually pay taxes in India, the number currently stands at 3 crores. After yesterday's announcement, one crore will no longer have to pay taxes thanks to the rebate.

This means that 2 crore Indians reported being paid at least Rs 12 lakhs/annum which represents ~ 45 lakh households

Instead of just tinkering with the slabs and missing the woods for the trees, the government could increase its earnings via direct taxes upto 4 times by just bringing within the ambit of taxes the 2 crore farm households who make more than 12 lakhs/annum.

At the very least, it can support the 2 odd crore farm HHs who make less than 3 lakhs/annum and are classified as 'poor' and 'vulnerable'.

For added context, Income tax receipts make up 22% of GoIs total earnings.

[volkman10]

Budget 2025: Where does the rupee come from?

The govt earns its revenue from several sources. Borrowing and other liabilities make up 24%, followed by #incometax at 22%.

GST and other indirect taxes contribute 18%, while corporate tax adds 17%. The remaining share comes from non-tax receipts, excise duties, customs, and non-debt capital receipts.



Budget 2025: Where does the rupee go?

On the expenditure side, 22% of the govt’s funds are allocated to the states’ share of #taxes and duties, and 20% goes towards interest payments.

The remaining funds are spent on central sector schemes, defence, finance commission transfers, centrally sponsored schemes, and subsidies.

Pension payments and other miscellaneous expenditures account for the rest of the allocation.

[DigitalOne]

Originally Posted by volkman10

Budget 2025: Where does the rupee go?

On the expenditure side, 22% of the govt’s funds are allocated to the states’ share of #taxes and duties, and 20% goes towards interest payments.

20% of expenditure to interest payments is a whopper, the effect of past profligacy . But of course, it included the pandemic years where the government was forced to borrow more.

Good thing is the fiscal deficit is trending down. For FY 2024-25 it is 4.8% and targeted to come down to 4.4% for the next year (FY 25-26). It will keep inflation and interest rates low.

---

The other huge welcome announcement in the budget was on Nuclear energy:

Big 'Nuclear' Announcement In Budget 2025
In her 8th consecutive budget speech on February 1, Finance Minister Nirmala Sitharaman announced the government's decision to set up a ‘Nuclear Energy Mission’ with an outlay of Rs 20,000 crore.

The finance minister said the ‘Nuclear Energy Mission’ for research and development of Small Modular Reactors (SMR) with an outlay of Rs 20,000 crore will be set up. “Development of at least 100 GW (Gigawatt) of nuclear energy by 2047 is essential for our energy transition efforts,” she said.

India To Amend Nuclear Liability Laws
In the budget speech, Sitharaman also announced the government's plans to amend the nuclear liability laws plans to amend the nuclear liability laws.

Certain clauses in India’s Civil Liability for Nuclear Damage Act, 2010 have emerged as hurdles in moving forward in the implementation of the historic civil nuclear deal that was firmed up between the two strategic partners - India and the US - around 16 years ago.

Source

"Amendments to the Atomic Energy Act and Civil Liability for Nuclear Damage Act will be taken up. A nuclear energy mission for research and development of small modular reactors with an outlay of Rs 20,000 crore will be set up. At least five indigenously developed small modular reactors will be operationalised by 2033," she said

Source

[Stribog]

Originally Posted by hothatchaway

Instead of just tinkering with the slabs and missing the woods for the trees, the government could increase its earnings via direct taxes upto 4 times by just bringing within the ambit of taxes the 2 crore farm households who make more than 12 lakhs/annum.

At the very least, it can support the 2 odd crore farm HHs who make less than 3 lakhs/annum and are classified as 'poor' and 'vulnerable'.

For added context, Income tax receipts make up 22% of GoIs total earnings.

The last time we had a chance to tax agri income was in the early 60's. Any govt that does this today is doomed to not even win 50 seats. It is a logical and effective move yes, but toxic from an electoral pov.

[TURb]

I am not an expert but with my little understanding what I can compile is as below.

Income below 12L (12.75L including standard deductions) => Nil tax
Income above 12L => As per the tax slabs mentioned in the new regime.

Here I made a table for better understanding.



To make it more simplified, I have made the below table with income and applicable income tax as per old vs new (25-26) regime.



This will be more helpful for the people who are currently opted for old tax regime and are in confusion with the latest changes.

[rohityadav6ae47]

In the old tax regime, you can invest 50k in NPS + 10% of basic salary for private company employees. This gives you an extra exemption of 50k + 10% basic over and above 1.5 lakh limit of section 80 C. I'm not sure whether this would be applicable in the new tax regime, can someone clarify if you're aware of this?