ITR Filing After Budget 2025: Is It Mandatory For Those Earning Below ₹12 Lakh? Details Inside

The Union Budget 2025 has brought significant relief to middle-class taxpayers. In her announcement on Saturday, Finance Minister Nirmala Sitharaman declared that individuals earning up to ₹12 lakh per annum will no longer be required to pay income tax if they opt for the new tax regime.

This revision raises the tax-free threshold by ₹5 lakh from the previous limit of ₹7 lakh.

The Finance Ministry has clarified that this exemption applies solely to the new tax regime, which has been the default system since 2023, reported Business Today.

To benefit from this revision, individuals must simply file their Income Tax Return (ITR); no additional formalities are required.

Previously, an individual earning ₹12 lakh annually would have paid approximately ₹80,000 in income tax under the new regime. However, with the revised threshold, this tax liability has been eliminated, provided the taxpayer files an ITR to claim the rebate.

Additionally, there are certain conditions under which a tax return must be filed even if the total income does not exceed the basic exemption limit, such as:

1. Deposits in a current account with banking institutions exceeding ₹1 crore
2. Electricity bills amounting to more than ₹1 lakh
3. Expenditure on foreign travel exceeding ₹2 lakh

Frequently Asked Questions on Taxation:

1. How will a person earning ₹12 lakh benefit from the new tax rates?

Answer: Previously, an individual with an annual income of ₹12 lakh was required to pay ₹80,000 in tax under the new regime. Now, they will pay no tax on this income.

2. Has the total income threshold for NIL tax payments increased in this budget?

Answer: Yes, the threshold for NIL tax payments under the new tax regime has been raised to ₹12 lakh, provided the taxpayer files an ITR to avail of the rebate.

3. What was the previous income limit for NIL tax payments?

Answer: The previous limit for NIL tax payments was ₹7 lakh. By increasing this threshold to ₹12 lakh, approximately one crore taxpayers who were previously liable to pay between ₹20,000 and ₹80,000 in tax will now pay nothing.

Revised Income Tax Slabs:

The new tax regime will introduce an additional 25% tax bracket, bringing the total number of slabs to seven from FY26. The updated tax structure is as follows:

- ₹0 - ₹4,00,000: 0%
- ₹4,00,001 - ₹8,00,000: 5%
- ₹8,00,001 - ₹12,00,000: 10%
- ₹12,00,001 - ₹16,00,000: 15%
- ₹16,00,001 - ₹20,00,000: 20%
- ₹20,00,001 - ₹24,00,000: 25%
- ₹24,00,001 and above: 30%