Revised Income Tax Slabs in Budget 2025: How much tax will new regime taxpayer save on Rs 20 lakh salary under proposed slabs? See detailed analysis

The Finance Minister announced that taxpayers with an annual income up to Rs 12 lakh in a year won't have to pay tax. Other than that, the taxpayer will get an additional benefit of Rs 75,000 as a standard deduction. But if the salary is above Rs 12.75 lakh, they have to pay tax on the entire amount. However, for a non-salaried person, the standard deduction of Rs 75,000 won't apply and they need to pay tax if their income is more than Rs 12 lakh.

Nil tax in the new regime on income up to Rs 0-4 lakh 5% tax in the new regime on income up to Rs 4-8 lakh 10% tax in the new regime on income up to Rs 8-12 lakh 15% tax in the new regime on income up to Rs 12-16 lakh 20% tax in the new regime on income up to Rs 16-20 lakh 25% tax in the new regime on income up to Rs 20-24 lakh 30% tax in the new regime on income above Rs 24 lakh

For income 0-Rs 3 lakh- Nil For income Rs 3 lakh-Rs 7 lakh- 5% For income Rs 7 lakh-Rs 10 lakh- 10% For income Rs 10 lakh-Rs 12 lakh- 15% For income Rs 12 lakh-Rs 15 lakh- 20% For income Rs 15 lakh+- 30%

We are calculating how much a new tax regime taxpayer with Rs 20 lakh annual income pays in tax and how much they will pay under the proposed slabs. We will first show how much they are paying now (under the existing slabs) and then compare it with how much they will pay under the proposed slabs. The end result will show the amount saved under the proposed tax slabs.

We will break up tax in several parts and see that at every stage how much tax they pay now.

There is no tax on this part of income. 

On this part, the tax amount for the income is Rs 20,000.

For this part of the salary, the tax is Rs 30,000.

The tax for this part will be Rs 60,000.

The total tax paid on the Rs 20 lakh salary in a year is Rs 1,40,000 under the existing system.

There will no tax on this part of salary.

The tax paid for this part of income is Rs 20,000.

The tax paid for this portion of income is Rs 40,000.

The tax paid on this income is Rs 45,000.

The tax paid on this income is Rs 60,000.

The total tax paid is Rs 1,05,000.

The tax saved on a Rs 20 lakh salary under proposed slabs will be Rs 35,000.

While there were changes in the new tax regime, there was no change in the old tax regime.