People earing Rs 12 20 lakh will not have to pay full tax due to marginal reliaf

New tax slab: Finance Minister Nirmala Sitharaman introduced Union Budget 2025 on 1 February. During this time, he made income up to Rs 12 lakh tax free. That is, whose annual income is up to Rs 12 lakh, they will not have to pay a single penny. This change has been made in the tax slab under the new regime of income tax. Now the question comes that if your income is Rs 12.20 lakh, then you will have to pay tax according to 12-16 lakh tax slab? The answer is not.

Government increased section 87A rebate

Explain that the government has increased the rebate of section 87A to make tax free of income up to Rs 12 lakh. That is, under the earlier new tax regime, no tax had to be paid on income of Rs 7 lakh because it used to get a rebate of Rs 25,000 under section 87A. Now the government has increased this rebate from Rs 25,000 to Rs 60,000. Due to this, income of up to Rs 12 lakh has become tax free.

They will get the benefit of marginal relief

According to the tax slab ranging from 12 lakh to 16 lakhs, tax of Rs 63,000 is made on more than 12.20 lakh income, but you have to pay only Rs 20,000 tax. The reason behind this is Marginal Relief. Marginal Relief will benefit all the people whose annual income is Rs 12.75 lakh. However, if someone’s annual income is more than 12.75 lakhs, then he will not get the benefit of marginal relief and he will have to pay the entire tax according to the tax slab.

What is marginal relief?

Marginal Relief means that if a person’s income is slightly higher than the tax free limit, then he will not have to pay tax on the entire income, but will only have to pay tax on extra amount. If a person has an annual income of Rs 12.30 lakh due to marginal relief, then he will have to pay only 30,000 rupees.

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