Earning above ₹12 lakh? Here's how your tax could spike

For the salaried, once you account for the standard deduction, marginal relief applies to salaries of up to ₹13.5 lakh

- Shipra Singh & Neil Borate

Imagine getting a salary bump, only to find that your tax bill eats up most—if not all—of your raise. While the new tax regime in Budget 2025 promises no tax on incomes up to ₹12 lakh, it doesn't necessarily mean that earning a little more is always beneficial.

Thankfully, marginal relief has your back, ensuring that small increases in income don't result in a huge spike in tax outgo.

Key insights into the new tax rebate According to the Union Budget for 2025-26, presented by finance minister Nirmala Sitharaman, starting from next financial year, there will be no tax under the new regime on incomes up to ₹12 lakh. For salaried individuals, this limit is ₹12.75 lakh after accounting for the standard deduction.

However, ₹12 lakh is not the absolute tax exemption limit. According to the tax slab rates, the tax liability at ₹12 lakh income would be ₹60,000.