Saturday, June 14, 2025
HomeBusinessDo People Earning ₹12.20 Lakh Need to Pay Full Tax? Don’t Worry,...

Do People Earning ₹12.20 Lakh Need to Pay Full Tax? Don’t Worry, Marginal Relief Will Help

Published on

New Tax Slab Update:
Finance Minister Nirmala Sitharaman presented the Union Budget 2025 on February 1. In this budget, income up to ₹12 lakh has been made tax-free. This change was introduced under the new tax regime. Now, the question is: What if your income is ₹12.20 lakh? Will you have to pay tax according to the ₹12-16 lakh slab? The answer is no.

Increased Rebate Under Section 87A
To make income up to ₹12 lakh tax-free, the government has increased the rebate under Section 87A. Earlier, under the new tax regime, no tax was charged on income up to ₹7 lakh because of a ₹25,000 rebate. Now, the rebate has been increased to ₹60,000, making income up to ₹12 lakh completely tax-free.

Who Benefits from Marginal Relief?
Under the tax slab for ₹12 to ₹16 lakh, an income of ₹12.20 lakh would attract ₹63,000 in tax. However, you only need to pay ₹20,000 due to marginal relief. Marginal relief is available for those earning up to ₹12.75 lakh. Beyond this amount, taxpayers must pay according to the regular tax slab without any relief.

What is Marginal Relief?
Marginal relief ensures that if your income slightly exceeds the tax-free limit, you don’t have to pay tax on the entire income. Instead, you only pay tax on the extra amount. For instance, if your annual income is ₹12.30 lakh, you would only need to pay tax on ₹30,000, not the whole income.

Latest articles

Shreyas Iyer Wins ICC Player of the Month Award During IPL 2025 — A Rare Achievement

In the middle of IPL 2025, Indian cricketer Shreyas Iyer, who is leading Punjab...

Arvind Kejriwal’s Strong Attack on BJP and Congress: “Very Sad That…”

On Monday (14 April), Aam Aadmi Party (AAP) chief and former Delhi Chief Minister...

Swords Waved Openly at Karni Sena Rally, Slogans Raised Against SP MP Ramjilal Suman

In Agra district of Uttar Pradesh, the Karni Sena openly challenged law and order...

Mahua Moitra Says BJP Workers Are Closing Fish Shops in Delhi

TMC MP Mahua Moitra has claimed that fish and meat shops are being shut...