FM Clarifies: Tax Relief Ensures Minimal Tax For Incomes Slightly Above ₹12 Lakh

Finance Minister Nirmala Sitharaman, while replying to the debate on the Finance Bill 2025 in the Lok Sabha, clarified the government's move to provide marginal tax relief for individuals earning slightly over ₹12 lakh annually. She explained that under the Union Budget 2025-26 proposals, income up to ₹12 lakh remains fully exempt from personal income tax in the new regime. For those earning marginally above this threshold, only the excess amount is taxed—ensuring they still take home ₹12 lakh. For instance, someone earning ₹12.01 lakh would pay just ₹1,000 in tax, instead of ₹61,500 without the relief. Sitharaman emphasized that this change ensures fairness and protects middle-income earners from disproportionately high tax burdens. The revised rebate structure and slab reductions aim to boost disposable income while simplifying tax compliance.