Big Tax Relief in Budget 2025: New Tax Regime Offers Major Savings for Individuals

In a move that brings a wave of relief to taxpayers, Budget 2025 has introduced significant changes in the new tax regime, making it more attractive than ever before for individual earners. While the old tax regime remains unchanged, the new tax regime has been revamped with wider slabs and lower tax rates, offering more room for savings.

One of the most notable changes is the adjustment in the highest tax bracket. Earlier, individuals with an income exceeding ₹15 lakhs had to pay 30% income tax, but post-budget, this threshold has been shifted to ₹24 lakhs. This simple yet impactful revision translates into substantial income tax savings, especially for middle- and upper-middle-class taxpayers.

What does this mean for you?

If you fall under the new tax regime, this budget could leave you with more money in your pocket. The government’s intent is clear – encourage more people to shift to the simplified structure of the new tax regime and reduce the tax burden on salaried individuals.

This change means more post-tax income and better cash flow, giving individuals the flexibility to invest or spend more wisely.

But what should you do with the money saved?

Financial experts suggest five smart ways to use your tax savings:

1. Build or boost your emergency fund.

2. Invest in SIPs or mutual funds for long-term wealth creation.

3. Prepay existing debts to reduce future interest burdens.

4. Upgrade your health insurance coverage.

5. Diversify your portfolio by considering safer options like fixed deposits or PPFs.

These steps can help you make the most of the benefits from the new tax regime while also securing your financial future.

Final Thoughts

With the budget 2025 bringing clarity and tax benefits under the new tax regime, this could be the perfect time to re-evaluate your tax planning strategy. Whether you’re planning investments or saving for goals, the additional income tax savings can go a long way in helping you achieve them faster.

A wider slab and lower tax rate mean less tax and more opportunity. Are you ready to make the switch?