Revised New Tax Slabs: Rs 12,500 tax on Rs 15 lakh Income? How you may need to pay just that on Rs 12.75 lakh annual salary and Rs 2.25 lakh capital gains

In Budget 2025, Finance Minister Nirmala Sithraman proposed significant changes in the new tax regime. The main change was that salaried individuals don't need to pay any tax on their annual income up to Rs 12.75 lakh. This also includes a standard deduction of Rs 75,000. For non-salaried individuals, this limit is Rs 12 lakh. 

While the tax exemption limit was increased from Rs 7 lakh income to Rs 12.75 lakh, tax slabs were also changed. The 30 per cent tax slab now starts from Rs 24 lakh income.

In her speech, Sithraman said, "I am now happy to announce that there will be no income tax payable upto income of Rs 12 lakh (i.e. average income of Rs 1 lakh per month other than special rate income such as capital gains) under the new regime. This limit will be Rs 12.75 lakh for salaried tax payers, due to standard deduction of Rs 75,000."

It means that income from capital gains will not be included in the tax-free limit. A salaried person earning Rs 12.75 lakh, including capital gains needs to pay capital gains tax. 

Capital gains tax is paid on capital assets such as real estate, stocks, mutual funds and bonds. 

The rates depend on the holding period and may vary from asset to asset. In this write-up, we are talking about capital gains from mutual funds and stocks.

For stocks and mutual funds, the holding period for short term capital gains is less than 12 months, while the holding period for long term capital gains is more than 12 months.

The short-term capital gains tax rate is 20 per cent.

The long-term capital gains tax rate is 12.50 per cent.

We are calculating total tax liability for a salaried-class individual earning Rs 12,75,000 a year and having long-term capital gains of Rs 2.25 lakh. This makes the cumulative income Rs 15 lakh a year.

Since the income is Rs 12,75,000, there will be no tax on it.

An important clause in terms of long-term capital gains tax is that an individual doesn't have to pay long-term capital gains tax on Rs 1,25,000 gains a year. They need to pay tax only on the income above that level.  

E.g., if their long-term capital gains are Rs 2 lakh a year, they need to pay tax only on Rs 75,000. 

The individual doesn't have to pay any tax on the first Rs 1.25 lakh gains. They need to pay tax on Rs 1 lakh gains. At a 12.5% rate, the tax on it will be Rs 12,500.