No Tax on ₹12 Lakh Income: Government Dismisses Rumours Ahead of New Income Tax Bill 2025

New Delhi, August 11: Amid widespread speculation surrounding the upcoming Income Tax Bill 2025, the central government has officially confirmed that the tax exemption on annual income up to ₹12 lakh will remain unchanged, bringing relief to crores of middle-class taxpayers.

As Finance Minister Nirmala Sitharaman prepares to present the much-anticipated tax bill in the Lok Sabha today, concerns had surfaced across social media and various news platforms suggesting that the ₹12 lakh tax exemption could be withdrawn.

However, Union Minister for Parliamentary Affairs and Minority Affairs, Kiren Rijiju, issued a strong clarification, stating, “There is no proposal to remove the ₹12 lakh exemption. The new bill retains this relief as announced in the previous Union Budget.”

Rijiju emphasized that the Income Tax Bill 2025 is not a complete overhaul, but rather a revised and streamlined version of the old draft. It includes 285 recommendations from the Parliamentary Select Committee, all of which have been incorporated to improve taxpayer experience and simplify compliance.

"The bill aims to maintain the benefits already extended to middle-income earners. Our focus is to modernize the tax system while ensuring existing taxpayer reliefs stay intact," he added.

The new bill is designed to replace the outdated Income Tax Act of 1961, which has long been criticized for its complexity. Key highlights of the new framework include:

• Reduction in legal sections: 536 sections (down from 819 in the old law)

• Streamlined structure: Only 23 chapters, focusing on core provisions

• Use of technology: Encourages e-filing, transparency, and faster processing

• Simplification: Clearer language and easier compliance norms for taxpayers

This move is part of the government's larger vision to reform and digitize India’s financial infrastructure, making the system more taxpayer-friendly and transparent.

With this clarification, the government has reassured the public that there will be no sudden withdrawal of benefits, especially for salaried individuals and small business owners.

The final details of the Income Tax Bill 2025 will be discussed and debated in Parliament over the coming days. However, the retention of the ₹12 lakh exemption is expected to be a major highlight of the new tax regime.