Get updated on the latest income tax slabs for FY 2024-25 (AY 2025-26). This blog covers the revised tax rates under both the old and new tax regimes, highlighting deductions, exemptions, and rebate benefits. Understand how recent changes, including the adjusted tax brackets and rebates, impact your tax planning and savings. Stay informed about upcoming Budget 2025 discussions on potential deductions and exemptions.
The income tax slabs for FY 2024-25 (AY 2025-26) determine the tax rates applicable to different income groups. Taxpayers can choose between the old and new tax regimes, each with its own set of rates and deductions. Understanding these slabs is for planning tax liabilities efficiently.
Latest Update on Income Tax Slabs in Budget 2025
The income tax structure in India follows two regimes—the old tax regime with deductions and the new tax regime with lower tax rates but fewer exemptions. The government revises tax slabs periodically to align with economic conditions and ease the tax burden on individuals. For FY 2024-25 (AY 2025-26), the new tax regime continues as the default, with taxpayers having the option to switch to the old regime if preferred.
Income Tax Slabs for FY 2025-26 and Ay 2026-27 Under New Tax Regime
The new tax regime, introduced to simplify taxation, follows a structured slab system based on income brackets. As per the latest updates:
- Rs 0 – Rs 4 lakh: No tax
- Rs 4 lakh – Rs 8 lakh: 5% tax
- Rs 8 lakh – Rs 12 lakh: 10% tax
- Rs 12 lakh – Rs 16 lakh: 15% tax
- Rs 16 lakh – Rs 20 lakh: 20% tax
- Rs 20 lakh – Rs 24 lakh: 25% tax
- Above Rs 24 lakh: 30% tax
Individuals earning up to ₹7 lakh under the new tax regime benefit from a full rebate under Section 87A, effectively making their tax liability zero.
New Income Tax Slabs (FY 2025-26 and Ay 2026-27)
The tax structure remains unchanged from the previous financial year, ensuring continuity for taxpayers. While the new tax regime offers lower rates, the old tax regime provides deductions under various sections like 80C, 80D, and HRA benefits. Choosing between the two depends on individual income, investments, and financial planning preferences.
Tax Saving Under the New Tax Regime
The income tax slabs under the new tax regime have undergone changes over the years to provide tax relief and simplify compliance. The latest proposed changes for FY 2025-26 (AY 2026-27) aim to make the new tax regime more attractive by adjusting slab limits and tax rates. Below is a comparison of the tax slabs for different financial years:
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Existing Tax Savings
| Annual Income (₹) | Tax Rate (%) |
| 0 – 3,00,000 | 0% |
| 3,00,001 – 7,00,000 | 5% |
| 7,00,001 – 10,00,000 | 10% |
| 10,00,001 – 12,00,000 | 15% |
| 12,00,001 – 15,00,000 | 20% |
| Above 15,00,000 | 30% |
These updates aim to enhance tax efficiency while ensuring ease of compliance. Let me know if you need any modifications!
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Proposed Tax Savings
| Annual Income (₹) | Tax Rate (%) |
| 0 – 4,00,000 | 0% |
| 4,00,001 – 8,00,000 | 5% |
| 8,00,001 – 12,00,000 | 10% |
| 12,00,001 – 16,00,000 | 15% |
| 16,00,001 – 20,00,000 | 20% |
| 20,00,001 – 24,00,000 | 25% |
| Above 24,00,000 | 30% |
The July 2024 budget introduced modifications to the new tax regime, increasing the upper limit in two slabs by ₹1 lakh each, making it more beneficial for taxpayers.
Features of the New Tax Regime (FY 2025-26 and AY 2026-27)
Budget 2025 has revised the income tax slabs and rates under the new tax regime for FY 2025-26 (AY 2026-27). Income up to ₹4 lakh is now exempt, and the updated structure reduces tax liability while keeping the new regime as the default option.
| Income Tax Slabs(Rs.) | Income Tax rate (%) |
| ₹0 – ₹4 lakh | NIL |
| ₹4 – ₹8 lakh | 5% |
| ₹8 – ₹12 lakh | 10% |
| ₹12 – ₹16 lakh | 15% |
| ₹16 – ₹20 lakh | 20% |
| ₹20 – ₹24 lakh | 25% |
| Above ₹. 24 lakh | 30% |
How Is Income Up to Rs 12 Lakhs Tax Free With Examples?
Mitesh Jain, Partner at Economic Laws Practice, stated that if an individual or HUF has an income of up to ₹12 lakh (excluding income taxed at special rates like capital gains on listed equity shares), the tax payable would be zero after applying the rebate under Section 87A.
Example: Tax Calculation Under the New Regime
Case 1: Income ₹5,50,000
- Capital gains: ₹50,000
- Total income: ₹5,50,000
- Tax on normal income: ₹5,000
- Tax on special income: ₹6,250
- Rebate (Sec 87A): ₹5,000
- Final tax liability: ₹6,250
Case 2: Income ₹8,00,000
- Capital gains: NIL
- Total income: ₹8,00,000
- Tax on normal income: ₹20,000
- Rebate (Sec 87A): ₹20,000
- Final tax liability: NIL
Case 3: Income ₹11,50,000
- Capital gains: ₹1,50,000
- Total income: ₹11,50,000
- Tax on normal income: ₹40,000
- Tax on special income: ₹18,750
- Rebate (Sec 87A): ₹40,000
- Final tax liability: ₹18,750
While income up to ₹12 lakh is effectively tax-free due to the rebate, the tax is still calculated as per slabs, with the rebate reducing the final amount payable.
Income Tax Scenario Under the New Tax Regime
The revised tax rates under the new regime aim to provide relief and simplify tax calculations for individuals. Below is the updated tax slab structure:
- Income up to ₹4 lakh – No tax
- ₹4 lakh to ₹8 lakh – 5%
- ₹8 lakh to ₹12 lakh – 10%
- ₹12 lakh to ₹16 lakh – 15%
- ₹16 lakh to ₹20 lakh – 20%
- ₹20 lakh to ₹24 lakh – 25%
- Above ₹24 lakh – 30%
With these changes, the new regime continues to offer lower tax rates while ensuring ease of compliance for taxpayers.
Tax Liability Breakdown at Different Income Levels
The tax liability under the new regime varies based on income levels after considering applicable tax slabs and rebates. Below is a breakdown of tax payable at different income levels:
Let’s take an example of an individual with an annual income of ₹12 lakh under the new tax regime:
- Income up to ₹4 lakh – No tax
- Income between ₹4 lakh and ₹8 lakh – ₹20,000 tax
- Income between ₹8 lakh and ₹12 lakh – ₹40,000 tax
- Total tax liability before rebate – ₹60,000
With the rebate under Section 87A, the entire ₹60,000 tax liability is eliminated, resulting in zero tax payable for individuals earning up to ₹12 lakh. In comparison, under the old tax regime, an individual earning ₹12 lakh would have paid ₹1,72,500 in taxes.
Income Tax Slab and Rates for FY 2024-25 (AY 2025-26) After Budget 2024
The income tax slabs for FY 2024-25 (AY 2025-26) have been revised after Budget 2024. The 30% tax rate now applies to income above ₹24 lakh instead of ₹15 lakh. There are also discussions on reintroducing deductions to benefit taxpayers.
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30% Tax Slab Threshold
Budget 2024 has revised the highest tax rate threshold. Previously applicable on income above ₹15 lakh, the 30% tax rate now applies only to incomes exceeding ₹24 lakh under the new tax regime.
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Tax Brackets
The revised tax slabs for FY 2024-25 are:
- ₹0 – ₹3 lakh: 0%
- ₹3 lakh – ₹7 lakh: 5%
- ₹7 lakh – ₹10 lakh: 10%
- ₹10 lakh – ₹12 lakh: 15%
- ₹12 lakh – ₹15 lakh: 20%
- ₹15 lakh – ₹24 lakh: 25%
- Above ₹24 lakh: 30%
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Budget 2025
The upcoming Budget 2025 is expected to refine the tax structure further, with possible adjustments to deductions and exemptions under the new regime to enhance taxpayer benefits.
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Reintroducing Deductions
There are discussions about reintroducing select deductions within the new tax regime, making it more competitive with the old regime. This could include standard deductions and specific exemptions for salaried individuals and businesses.
Income Tax Slabs and Rates for Financial year 2024-25 Under the Old Tax Regime
The old and new tax regimes for FY 2024-25 (AY 2025-26) have different tax rates across income brackets. The new regime offers lower rates for middle-income groups, as shown below:
| Taxable Income | Old Regime Tax Rate | New Regime Tax Rate |
| ₹3,00,001 – ₹5,00,000 | 5% | 5% |
| ₹5,00,001 – ₹7,00,000 | 20% | 5% |
| ₹7,00,001 – ₹10,00,000 | 20% | 10% |
| ₹10,00,001 – ₹12,00,000 | 30% | 15% |
Income Tax Slabs Under the Old Tax Regime for Individual, HUF, AOP, and BOI
The old tax regime follows a structured slab system for individuals, Hindu Undivided Families (HUFs), Associations of Persons (AOPs), and Bodies of Individuals (BOIs). Tax rates vary based on income levels, with higher earnings attracting higher tax rates. Below are the applicable slabs and rates.
| Old Tax Regime | New Tax Regime u/s 115BAC | ||||
| Income Tax Slab | Income Tax Rate | Surcharge | Income Tax Slab | Income Tax Rate | Surcharge |
| Up to ₹ 2,50,000 | Nil | Nil | Up to ₹ 3,00,000 | Nil | Nil |
| ₹ 2,50,001 – ₹ 5,00,000 | 5% above ₹ 2,50,000 | Nil | ₹ 3,00,001 – ₹ 7,00,000** | 5% above ₹ 3,00,000 | Nil |
| ₹ 5,00,001 – ₹ 10,00,000 | ₹ 12,500 + 20% above ₹ 5,00,000 | Nil | ₹ 7,00,001 – ₹ 10,00,000 | ₹ 20,000 + 10% above ₹ 7,00,000 | Nil |
| ₹ 10,00,001 – ₹ 50,00,000 | ₹ 1,12,500 + 30% above ₹ 10,00,000 | Nil | ₹ 10,00,001 – ₹ 12,00,000 | ₹ 50,000 + 15% above ₹ 10,00,000 | Nil |
| ₹ 50,00,001 – ₹ 100,00,000 | ₹ 1,12,500 + 30% above ₹ 10,00,000 | 10% | ₹ 12,00,001 – ₹ 15,00,000 | ₹ 80,000 + 20% above ₹ 12,00,000 | Nil |
| ₹ 100,00,001 – ₹ 200,00,000 | ₹ 1,12,500 + 30% above ₹ 10,00,000 | 15% | ₹ 15,00,001 – ₹ 50,00,000 | ₹ 1,40,000 + 30% above ₹ 15,00,000 | Nil |
| ₹ 200,00,001 – ₹ 500,00,000 | ₹ 1,12,500 + 30% above ₹ 10,00,000 | 25% | ₹ 50,00,001 – ₹ 100,00,000 | ₹ 1,40,000 + 30% above ₹ 15,00,000 | 10% |
Old Tax Regime Vs New Tax Regime (FY 2024-25 & AY 2025-26) vs. (FY 2023-24 & AY 2024-25)
The Budget 2024 introduced notable revisions to the tax slabs under the New Tax Regime, effective for FY 2024-25 (AY 2025-26). Taxpayers can take advantage of updated tax rates, an increased standard deduction, and a higher family pension deduction.
Revised Income Tax Slabs for FY 2024-25 (New Tax Regime)
| Income Slab (₹) | Tax Rate |
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 – ₹7,00,000 | 5% |
| ₹7,00,001 – ₹10,00,000 | 10% |
| ₹10,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
A tax rebate of up to ₹25,000 is available if the total income does not exceed ₹7,00,000 (not applicable to NRIs).
Income Tax Slabs for FY 2024-25 (AY 2025-26) Under Old Regime
There were no modifications to the old tax regime in Budget 2024. The existing tax slabs remain unchanged:
| Income Slab (₹) | Tax Rate |
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| ₹10,00,001 and above | 30% |
Old Tax Regime Slabs and Rates for Individual Taxpayers below 60 years (AY 2025-26, FY 2024-25)
For individuals, HUFs below 60 years, and NRIs, the income tax exemption limit is set at ₹2,50,000. Surcharge and cess apply as per regulations.
Old Tax Regime Slabs and Rates for Senior Citizens Aged 60 to 80 Years (Ay 2025-26, Fy 2024-25)
Income Tax Slab for Individuals Aged 60 to 80 Years
| Taxable Income | Tax Rate |
| Income up to ₹3,00,000 | Nil |
| ₹3,00,000 to ₹5,00,000 | 5% |
| ₹3,00,000 to ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Old Tax Regime Slabs and Rates for Super Senior Citizens Aged over 80 years (AY 2025-26, FY 2024-25)
Income Tax Slab for Super Senior Citizens (80+ Years)
- Income up to ₹5,00,000 – Nil
- ₹5,00,001 to ₹10,00,000 – 20% tax
- Above ₹10,00,000 – 30% tax
Individual Taxpayers Aged Less than 60 years Old: New Tax Slabs for AY 2025-26
For individuals under 60 years, the exemption limit stays at ₹2.5 lakh. Senior citizens between 60 and 79 years have a higher exemption threshold of ₹3 lakh, while super senior citizens aged 80 and above enjoy an increased limit of ₹5 lakh. This age-based differentiation remains a key feature of the old tax regime.
Old vs New Income Tax Slabs and Tax Rates for Senior Citizen Taxpayers Aged Between 60 to 80 years
Individuals below 60 years have an exemption limit of ₹2.5 lakh, while senior citizens aged 60 to 79 years are eligible for a ₹3 lakh exemption. Super senior citizens, aged 80 and above, enjoy a higher exemption of ₹5 lakh. This tiered exemption system remains a defining feature of the old tax regime.
| Income Range (₹) | Old Tax Regime | New Tax Regime |
| Up to ₹3,00,000 | Nil | Nil |
| ₹3,00,001 – ₹5,00,000 | 5% | 5% |
| ₹5,00,001 – ₹6,00,000 | 20% | 5% |
| ₹6,00,001 – ₹9,00,000 | 20% | 10% |
| ₹9,00,001 – ₹10,00,000 | 20% | 15% |
| ₹10,00,001 – ₹12,00,000 | 30% | 15% |
| ₹12,00,001 – ₹15,00,000 | 30% | 20% |
| Above ₹15,00,000 | 30% | 25% |
Increased Standard Deduction for FY 2024-25 (AY 2025-26)
The Budget 2023 introduced a ₹50,000 standard deduction under the New Tax Regime, effective from FY 2023-24. In Budget 2024, this deduction was increased to ₹75,000, applicable from FY 2024-25.
Income Tax Rule Changes in 2024 that Will Influence ITR filing in 2025
Under the new tax regime for FY 2024-25, individuals can benefit from a higher deduction on their employer’s contribution to the National Pension System (NPS). This regime permits a deduction of up to 14% of the basic salary for employer contributions to NPS.
How Income Tax Slab Rates Have Changed for FY 2024-25
Under the new tax regime for FY 2024-25 (AY 2025-26), different tax rates apply based on income slabs. Below is a breakdown of the applicable tax rates:
| Taxable Income | Tax Rate |
| Up to ₹3,00,00 | NIL |
| ₹3,00,001 – ₹7,00,000 | 5% |
| ₹7,00,001 – ₹10,00,000 | 10% |
| ₹10,00,001 – ₹12,00,000 | 15% |
Income Tax Slabs for Hindu Undivided Family (HUF) for AY 2025-2026
The proposed income tax slabs under the new tax regime for FY 2025-26 are structured as follows:
- Up to ₹4,00,000 – Nil
- ₹4,00,001 – ₹8,00,000 – 5%
- ₹8,00,001 – ₹12,00,000 – 10%
- ₹12,00,001 – ₹16,00,000 – 15%
- ₹16,00,001 – ₹20,00,000 – 20%
- ₹20,00,001 – ₹24,00,000 – 25%
- Above ₹24,00,000 – 30%
Income Tax Slabs for Non-Resident Individual (AY 2025-26)
The income tax slabs for non-resident individuals for AY 2025-26 remain the same as those applicable to Indian residents below 60 years. However, NRIs are not eligible for the higher exemption limits provided to senior and super senior citizens. The applicable slabs are:
- Up to ₹2,50,000 – Nil
- ₹2,50,001 – ₹5,00,000 – 5%
- ₹5,00,001 – ₹10,00,000 – 20%
- Above ₹10,00,000 – 30%
Surcharge and cess apply based on income levels.
Tax Slabs for Domestic Company for AY 2025-26
Domestic companies are subject to income tax based on their annual turnover and the chosen tax regime. The tax slabs for AY 2025-26 are as follows:
- Turnover up to ₹400 crore (in FY 2022-23) – 25%
- Turnover above ₹400 crore – 30%
- Companies opting for Section 115BAA (without exemptions/deductions) – 22%
- New manufacturing companies under Section 115BAB – 15%
Surcharge and cess are applicable as per prescribed limits.
What Are the Exemptions/Deductions Unavailable under the New Tax Regime in FY 24-25?
The new tax regime offers lower tax rates but removes various exemptions and deductions available under the old tax system. Some key exemptions and deductions that cannot be claimed under the new regime for FY 2024-25 include:
- Section 80C deductions (e.g., PPF, ELSS, LIC premium)
- House Rent Allowance (HRA)
- Leave Travel Allowance (LTA)
- Interest on home loan (Section 24(b))
- Standard deduction (except for salaried and pensioners)
- Deductions under Sections 80D, 80E, 80G, and 80TTA/TTB
Differences in Available Deductions Between the Old Tax Regime and the New Tax Regime
The major difference between the two regimes lies in the availability of deductions and exemptions:
- Old Tax Regime: Allows deductions under Sections 80C, 80D (health insurance), 80E (education loan), HRA, LTA, home loan interest, and more.
- New Tax Regime: Offers lower tax rates but does not allow most deductions, except for the standard deduction of ₹50,000 for salaried individuals and deductions for employer contributions to NPS.
Choosing between the two depends on individual income, eligible deductions, and tax-saving preferences.
How to Calculate Income Tax for Income Tax Slabs for FY 24-25 (AY 2025-26)
Tax rates are determined based on different income brackets. The formula for calculating income tax is as follows:
- Gross Salary – Deductions = Taxable Income
- Income Tax = (Taxable Income × Applicable Tax Rate) – Tax Rebate
How to know which Income Tax Slab you Fall in?
To determine your income tax slab, identify your total taxable income after deductions. Compare it with the applicable tax slabs for your age and residency status. Apply the corresponding tax rate to calculate your tax liability.
Conclusion:
The income tax slabs for FY 2024-25 (AY 2025-26) include the old and new tax regimes. The new tax regime offers lower rates but fewer exemptions, while the old regime allows deductions. Budget 2024 revised the highest 30% tax rate for income above ₹24 lakh. Possible future deductions in the new regime may increase its appeal.
The new tax regime exempts income up to ₹4 lakh, with rates from 5% to 30%. Section 87A rebates ensure no tax for income up to ₹12 lakh. These changes simplify compliance and reduce tax burdens for many. Taxpayers benefiting from deductions may still prefer the old regime. Get expert assistance for tax filing and compliance to ensure accuracy. Choose the right tax regime, maximise savings, and avoid penalties. Simplify the process with professional support to your needs.
For tax filing support, visit Tax Filing Experts today.
FAQs:
What are the key changes in income tax slabs for FY 2025-26?
The slabs have been revised with higher exemption limits and adjusted tax rates. These changes aim to simplify taxation and provide relief to taxpayers.
How do the new income tax slabs for FY 2025-26 compare to the previous year?
The new slabs offer different exemptions and tax rates compared to last year. Reviewing them helps assess potential tax savings for different income levels.
Is income up to Rs 12 lakhs completely tax-free under the new tax regime?
No, but exemptions and deductions may reduce taxable income. It’s best to check the latest slabs for specific tax liability details.
How can I calculate my income tax under the new tax regime for FY 2025-26?
Use an income tax calculator or manual computation based on revised slabs. Seeking professional assistance ensures accuracy.
What deductions are unavailable under the new tax regime in FY 2024-25?
Deductions like 80C, 80D, and HRA are not available. The regime simplifies taxation but limits exemptions.
Can I switch between the old and new tax regimes each year?
Salaried individuals can switch annually, but business owners have restrictions. Choosing the right regime depends on tax benefits.
How does the new tax regime affect senior citizens and super senior citizens?
Unlike the old regime, there are no extra exemptions based on age. Senior taxpayers must compare both regimes to decide.
What is the impact of the increased standard deduction in FY 2024-25 (AY 2025-26)?
The higher standard deduction lowers taxable income for salaried individuals. It provides some relief under the revised tax structure.
How can I save taxes under the new tax regime for FY 2025-26?
While traditional deductions are limited, lower tax rates may benefit taxpayers. Employer benefits and financial planning can help optimize savings.
How do I know which income tax slab I fall under for FY 2025-26?
Check the latest government-issued tax slabs for FY 2025-26. Your annual income determines the applicable tax rate.
