Union Budget 2025 has good news on income tax for NRIs too

Union Budget 2025 has been a treat to the middle class after Finance Minister Nirmala Sitharaman announced big income tax relief. While the budget has brought good news to Indian employees across various sectors, it also caters to Non-Resident Indians (NRIs).

While presenting the budget in Lok Sabha on Saturday, Sitharaman announced that there will be no income tax payable on income of up to Rs 12 lakh. The new income tax regime is structured to be more simplified and beneficial to the middle class, the finance minister noted.

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Under the revised New Income Tax Regime for 2025, the tax-free income threshold, including the standard deduction, has been raised to Rs 12.7 lakh. Additionally, individuals earning up to Rs 25 lakh will benefit from a tax reduction of up to Rs 1.1 lakh.

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How will it benefit NRIs?

Sitharaman said that the scheme of presumptive taxation will be extended to non-residents. All NRIs providing services to a resident company that is establishing or operating an electronics manufacturing facility will benefit from the presumptive taxation regime.

This revised regime is designed to assist non-residents involved in establishing or operating facilities for the manufacturing or production of electronic goods, articles, or related products in India.

What will tax slabs look like now?

The restructured tax slabs after Sitharaman’s budget speech will be like this:

• Rs 0 - Rs 4 lakh: Nil

• Rs 4 - 8 lakh: 5%

• Rs 8 - 12 lakh:10%

• Rs 12-16 lakh:15%

• Rs 16 - 20 lakh: 20%

• Rs 20 - 25 lakh: 25%

• Above Rs 25 lakh: 30%

“Taxpayers with normal income up to Rs 12 lakh (excluding special rate income such as capital gains) will receive a tax rebate, in addition to slab rate reductions, ensuring that no tax is payable by them,” the finance minister said as she announced the tax reforms.