Okay, let’s be real. Budget announcements usually sound like ’Blah blah fiscal deficit... blah blah capital expenditure…’
But this year’s Union Budget actually has some exciting stuff in store, especially if you're earning, or plan to start earning, or just want to know where your (future) money is going.
So, whether you’re juggling side hustles, planning your first solo trip, or manifesting that dream apartment, here’s what the new salary tax brackets really mean for you.
The New Tax Bracket, Decoded
Under the new tax regime (which is now the default), this is how your income will be taxed:
Annual Income (₹) | Tax Rate |
0 – 4 lakh | 0% (tax-free!) |
4 – 8 lakh | 5% |
8 – 12 lakh | 10% |
12 – 16 lakh | 15% |
16 – 20 lakh | 20% |
20 – 24 lakh | 25% |
24 lakh+ | 30% |
A standard deduction of ₹75,000 has been added. That means your tax-free income technically goes up to ₹12.75 lakh. Sweet, right?
What Does It Actually Mean for Me?
Let’s break it down, squad-style:
- Fresh grad just landing your first job? If you’re earning under ₹4L, no tax for you.
- Earning ₹12L+? Congrats, you’re now saving nearly ₹80,000 more, thanks to these new slabs.
- Planning to freelance or start that content biz? Lower taxes = more cash to invest.
What Should You Do With The Extra Money?
You could:
- Start that SIP your finance bro cousin keeps talking about.
- Put it towards a travel fund (Bali 2025, anyone?).
- Sign up for that design/coding course you’ve been eyeing
But Make It Budget-Approved
Think of it like this: the government’s giving you more breathing room. It’s up to you whether you want to use that space to spend smarter, save stronger, or begin that thing you’ve been postponing.
- This applies under the new tax regime, not the old one. You can still choose the old regime if you’re big on deductions like home loan interest or HRA.
- These changes kick in from FY 2025-26, so plan your finances for the year accordingly.