Budget 2025: FM Nirmala Sitharaman will present Budget 2025 on February 1, 2025. The Budget speech is expected to begin at 11:00 AM.

How has Budget 2025-26 made the Aam, Aadmi, and middle class happy?
Income Tax Budget 2025 Live Updates: These two major changes post the 2025 Budget announcements are set to have the most impact on the common man’s pockets. As per Anuj Puri, Chairman, ANAROCK Group:

Zero income tax for individuals earning up to Rs 12 lakh annually provides a major consumption boost. This move is also expected to strengthen demand for affordable housing. Additionally, the new income tax bill will retain nearly 50% of existing provisions while introducing personal tax reforms and rationalizing TDS and TCS regimes by streamlining rates and thresholds.

Investors can now claim Nil valuation for two self-occupied properties instead of just one – a positive move for residential real estate investment. The simplified TDS on rent decreases the compliance burden and enhances liquidity for landlords and will positively impact the rental housing market, especially in metro cities. Previously, homeowners could claim only one self-occupied property as tax-free; now, they can claim two, thereby removing taxation on notional rental income from a second home.

Taxpayers can now claim tax benefits for two self-occupied houses after Budget 2025-26 announcement
Income Tax Budget 2025 Live Updates: In a significant move announced on February 1, Finance Minister Nirmala Sitharaman relaxed the conditions for tax relief on self-occupied properties in the 2025 Union Budget. Taxpayers can now claim tax benefits for two self-occupied houses, a major change from the previous rule that allowed relief for only one property.

“This reform significantly eases the tax burden for individuals who own and live in multiple properties, offering financial flexibility and promoting homeownership. By acknowledging the diverse housing needs of families, this decision not only provides greater tax relief but also encourages real estate investment. The move aligns with the government’s broader focus on financial empowerment and ease of living, strengthening the middle class while simplifying the tax structure”, adds Adhil Shetty, CEO of Bankbazaar.com

Rs 80,000 is the savings for people with annual income of Rs 18,00,000 in the new tax regime. See how.
Income Tax Budget 2025 Live Updates: Here is how people earning Rs 18,00,000 can save up to Rs 80,000 in the new tax regime

Tax savings under the new regime (existing)
Rs. 3 to Rs 7 lakh—Rs 20,000
Rs 7 lakh to Rs 10 lakh—Rs 30,000
Rs 10 lakh to Rs 12 lakh– Rs 30,000
Rs 12 lakh to Rs 15 lakh–Rs 60,000
Rs 15 lakh to Rs 18 lakh—Rs 90, 000
Total Tax= 2,30,000

Tax savings under the new regime (proposed)
Rs 4 lakh to Rs 8 lakh: Rs 20,000
Rs 8 lakh to Rs 12 lakh: Rs 40, 000
Rs 12 lakh to Rs 15 lakh: Rs 45,000
Total Tax= 1,05,000

Total Savings (Difference)= Rs 80,000

Despite no 87A rebate, people earning Rs 15 lakh will save Rs 35,000 in income tax. Here’s how
Income Tax Budget 2025 Live Updates: People with an annual income of up to Rs 15,00,000 can still save Rs 35,000 in taxes, even without the Section 87A rebate available. See how

Tax savings under the new regime (existing)

Rs. 3 to Rs 7 lakh: Rs 20,000
Rs 7 lakh to Rs 10 lakh: Rs 30,000
Rs 10 lakh to Rs 12 lakh: Rs 30, 000
Rs 12 lakh to Rs 15 lakh: Rs 60, 000
Total Tax = Rs 1,40, 000

Tax savings under the new regime (proposed)

Rs 4 lakh to Rs 8 lakh: Rs 20,000
Rs 8 lakh to Rs 12 lakh: Rs 40, 000
Rs 12 lakh to Rs 15 lakh: Rs 45,000
Total Tax= 1,05,000

Net Savings: Rs 35, 000

Effective income of up to Rs 12,00,000 for salaried taxpayers tax-free under the new tax regime is tax-free. See how
Budget 2025 Income Tax Live Updates: Post FM Nirmala Sitharaman’s budget announcement, effective income of up to Rs 12,00,000 for salaried taxpayers is tax-free. This includes the standard deduction of up to Rs 75,000.

According to Manoranjan Sharma, Chief Economist at Infomerics Ratings, “As visualized by us and strongly stressed on multiple channels and in various mediums, the middle class has been given a welcome relief with no income tax up to Rs. 12 lakhs income. In view of the ravages of the inflationary spiral and the shrinking disposable income, this enhanced income tax limit will be welcome across the development spectrum.”

How has annual income of up to Rs 12,00,000 become tax-free under the new tax regime in Budget 2025-26?
Income Tax Budget 2025 Live Updates: As per the budget memorandum, “to enhance the limit of total income for rebate in clauses (a) and (b) of the first proviso under section 87A, on which the income tax is payable as per the rates of income tax under sub-section (1A) of section 115BAC, from Rs. 7,00,000 to Rs. 12,00,000 and the limit of rebate in clause (a) of first proviso to section 87A from Rs. 25,000 to Rs. 60,000,”

Middle Class Taxpayers Benefit from Increased Rebate Limit Under Section 87A
Income Tax Budget 2025 Live Updates: In a much anticipated move, the government has announced an increase in the rebate limit under Section 87A of the Income Tax Act. The rebate limit has been raised from Rs 7 lakhs to Rs 12 lakhs, offering significant tax relief to the middle class. For salaried individuals, who are eligible for a standard deduction of Rs 75,000, the effective rebate limit now stands at Rs 12.75 lakhs.

“This increase is expected to provide much-needed financial relief to many taxpayers, reducing their overall tax burden and improving disposable income. However, it’s important to note that this benefit will not be applicable to income taxed under special tax rates, as clarified by the Finance Minister. This means individuals with income subject to special tax rates such as capital gains or certain other categories will not be eligible for this rebate”, explains CA Jigar Suba.

The move is seen as a step toward enhancing financial stability for the middle-income group, and is expected to have a positive impact on their purchasing power in the coming fiscal year.

Here is how old tax regime and new tax regime will look like post Budget 2025-26
Income Tax Budget 2025 Live Updates: The new proposed tax regime, post FM Nirmala Sitharaman’s budget announcement, looks like this:

Zero to Rs 4,00,000—No Tax
Rs 4,00,000 to Rs 8,00,000—5%
Rs 8,00,0001 to Rs 12,00,000—10%
Rs 12,00,001 to Rs 16 lakh—15%
Rs 16,00,001 to Rs 20 lakh—20%
Rs 20,00,001 to Rs 24 lakh – 25%
Above 24 lakh—30%

The old tax regime, where no changes have been announced, looks like this (for those aged under 60).

No income tax on annual incomes-Rs 2,50,000
Between Rs. 2,50,001 and Rs 5,00,000-5%
Between Rs 5,00,001 to Rs 10,00,000-20%
Over Rs 10,00,000- 30%

No income tax on annual income of up to Rs 12 lakh in new tax regime
Income Tax Budget 2025 Live Updates: No income tax for salaried people on income of up to Rs 12,75,000

Withdrawals from National Savings Scheme post August 29, 2024 made tax-free
Income Tax Budget 2025 Live Updates: “A number of senior and very senior citizens have very old National Savings Scheme (NSS) accounts. As interest is no longer payable on such accounts, I propose to exempt withdrawals made from NSS by individuals on or after 29th August, 2024.”

TDS exemption limit for rent payment hiked in Budget 2025-26
Income Tax Budget 2025 Live Updates: In her speech, FM said that the annual limit of Rs 2.40 lakh for TDS on rent is being increased to Rs 6 lakh. “This will reduce, this will reduce the number of transactions liable to TDS, thus benefiting small tax payers receiving small payments”, she said.