90 percent taxpayers shift to new tax regime 2025 is the latest prediction by CBDT after Budget 2025. The Union Budget 2025 has brought major relief to India’s middle class. With zero tax on income up to ₹12 lakh, a ₹75,000 standard deduction, and simpler filing rules, the new income tax regime is becoming more attractive than ever. According to CBDT , these updates will likely make 90 percent taxpayers shift to new tax regime 2025.
Key Budget 2025 Changes and Benefits
Finance Minister announced several tax reforms to simplify filing and reduce the burden on taxpayers:
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Zero tax up to ₹12 lakh: The exemption limit has increased from ₹7 lakh, benefiting millions of middle-class earners.
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Standard deduction ₹75,000: Salaried employees can save more while calculating taxable income.
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Revised tax slabs: People earning up to ₹25 lakh can save up to ₹1.1 lakh annually.
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Simplified filing: Fewer deductions and exemptions make calculations easier.
The goal is to make tax compliance transparent, simple, and fair for all.
Why 90 percent taxpayers shift to new tax regime
CBDT expects that over 90 percent taxpayers shift to new tax regime. Here’s why:
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Simplicity: No need to track exemptions like HRA, 80C, or 80D.
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Tech-driven filing: Pre-filled ITR forms and AI-powered checks make filing faster and error-free.
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Lower dependence on professionals: Most people can now file their taxes themselves.
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Broader savings: With zero tax up to ₹12 lakh and reduced rates beyond, everyone from middle-income earners to salaried professionals benefits.
Even first-time filers will find the process easy and stress-free, making the new system appealing to nearly all taxpayers.
Impact on Middle Class, Salaried Employees, and India’s Tax Future
The Budget 2025 changes have a major positive impact:
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Middle class: Higher exemption and simplified filing mean more disposable income.
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Salaried and retired individuals: Standard deduction and zero-tax threshold reduce tax liability significantly.
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AI-based transparency: Pre-filled forms and automatic TDS computation ensure fast and accurate refunds.
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Future tax landscape: Currently, around 75% of taxpayers use the new regime; post-Budget 2025, this could cross 90 percent taxpayers shift to new tax regime. Eventually, India may phase out the old regime altogether, making taxation simple and digital-first.
The focus is clear — clarity, fairness, and ease of compliance for every individual.
The Budget 2025 has simplified India’s tax system and made it more beneficial for taxpayers. With zero tax up to ₹12 lakh, a ₹75,000 standard deduction, AI-powered filing, and simpler tax slabs, it is expected that 90 percent taxpayers shift to new tax regime 2025.
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Frequently Asked Questions
1. What is the new income tax regime in Budget 2025?
The new income tax regime is a simplified tax system with lower rates but fewer exemptions and deductions. Budget 2025 has made it more attractive with zero tax up to ₹12 lakh and revised tax slabs.
2. Who benefits most from the new tax regime?
Middle-class salaried employees, pensioners, and individuals earning up to ₹25 lakh annually benefit the most due to higher exemption limits, standard deduction, and simplified filing.
3. How much can I save under the new regime after Budget 2025?
Depending on your income, you can save up to ₹1.1 lakh annually. Individuals earning up to ₹12 lakh now pay zero tax, while those above get reduced rates under revised slabs.
4. Will 90 percent taxpayers shift to new tax regime in 2025?
Yes. CBDT expects over 90 percent of taxpayers to adopt the new regime due to simplicity, AI-based pre-filled ITRs, reduced paperwork, and higher savings.
5. Can I still use the old tax regime after Budget 2025?
Yes, the old regime is still available. However, with zero tax up to ₹12 lakh, ₹75,000 standard deduction, and simpler filing, most taxpayers will likely prefer the new regime
