ITR Filing 2025: Zero Tax Despite High Income? Know Who Pays Nothing Under New ITR Rules Before the September 15 Deadline

ITR Filing 2025: Here's How You Can Legally Pay Zero Tax Despite Earning Lakhs – All You Need to Know

The income tax return (ITR) filing season is here, and taxpayers across India are gearing up to file their returns before the deadline of September 15, 2025. But here's a surprising twist—even if your income is in lakhs, you might still owe zero income tax. Thanks to recent changes introduced in Union Budget 2025 by Finance Minister Nirmala Sitharaman, several salaried individuals can now enjoy complete income tax exemption—but only under specific conditions.

So, who qualifies for zero income tax, and how can you make the most of the tax-saving provisions this year? Let’s break it down.

Big Tax Relief Under the New Tax Regime

For the financial year 2025-26, the government has made key revisions to the personal income tax rules. If you opt for the new tax regime, you can legally avoid paying any income tax even with a salary of up to ₹12 lakh per year. How?

Here’s how it works:

• Under the new regime, a standard deduction of ₹75,000 (increased from the previous ₹50,000) is allowed for salaried individuals.

• This means that if your gross income is up to ₹12.75 lakh, after applying the standard deduction, your taxable income becomes ₹12 lakh, which—due to the revised tax slabs—can result in zero tax liability.

This is a huge relief for middle-income earners and salaried professionals who prefer a simplified tax filing process without juggling multiple deductions or exemptions.

But There’s a Catch – It’s Not for Everyone

Before you celebrate the idea of tax-free income, understand that this benefit is exclusive to those who choose the new tax regime.

Here’s what the new regime doesn’t offer:

• No deductions for House Rent Allowance (HRA)

• No exemptions for home loan interest

• No benefits under Section 80C for investments like ELSS, PPF, or life insurance

• No deductions for health insurance premiums under Section 80D

If you're someone who claims these deductions to lower your tax liability, then sticking with the old tax regime may still be more financially beneficial. The old regime continues to offer a broader range of exemptions and age-based tax relief.

Age-Based Tax Exemptions in the Old Regime

For those sticking with the old tax system, here are the basic exemption limits based on age:

• Below 60 years: ₹2.5 lakh tax-free

• Senior citizens (60–79 years): ₹3 lakh tax-free

• Super senior citizens (80 years & above): ₹5 lakh tax-free

These thresholds mean that senior and super senior citizens have significant relief under the old regime. If you're a retiree or have limited income but enjoy exemptions from your savings and investments, the old regime may be more suitable.

So, Which Tax Regime Should You Choose?

The right tax regime for you depends on your individual financial profile:

• If you have multiple deductions (home loan, 80C investments, insurance premiums), and your total taxable income is low after exemptions, you may benefit more from the old tax regime.

• However, if you want a simpler, hassle-free approach with minimal documentation, the new regime with zero tax up to ₹12 lakh income might be the smarter choice.

Final Advice Before You File

With the September 15, 2025 deadline approaching fast, it's important to assess your tax options wisely. Here are some tips:

• Compare both tax regimes using online calculators or consult a tax advisor

• Evaluate the deductions you are eligible for

• Choose the regime that results in the lowest tax liability

• File your ITR on time to avoid penalties

Even if you qualify for zero income tax, filing your ITR is still mandatory if your income exceeds the basic exemption limit or if you meet other filing criteria like foreign assets, business turnover, etc.

Conclusion:

The 2025 ITR filing season brings with it greater flexibility and better opportunities for tax savings. Whether you're aiming for zero tax under the new regime or leveraging deductions under the old regime, the key lies in making an informed choice. A few smart decisions today can help you stay compliant while keeping your hard-earned money in your pocket.