The new budget of 2025 brought the new income tax rates. It has new exemptions and new rates. Let’s know about the income tax slabs and rates provided in the new financial year 2025-26
Income tax slab rates determine how much tax an individual or business must pay based on their income level. These rates, revised annually, impact tax savings, exemptions, and financial planning. Staying informed about the latest income tax slab rates helps taxpayers optimize their liabilities and take advantage of available deductions. This guide provides a detailed breakdown of the latest slab rates for FY 2023-24 and FY 2024-25, differences between the old and new regimes, NRI taxation rules, corporate tax implications, and tax-saving strategies.
What are Income Tax Slab Rates?
Income tax slab rates are government-defined tax brackets that determine how much tax individuals pay based on their annual income. Higher income levels attract higher tax rates. These slabs vary for different categories of taxpayers. Detailed current slab rates are discussed later in this article.
Income Tax Slab Rates in Union Budget 2025: Key Changes
In the Union Budget 2025, significant revisions were introduced to India’s income tax structure, particularly under the new tax regime. These changes aim to provide substantial relief to taxpayers and stimulate economic growth.
Changes in Income Tax Slab Rates:
The new tax regime now offers zero tax liability for individuals with annual incomes up to ₹12 lakh, factoring in a standard deduction of ₹75,000. This effectively increases the tax-free threshold, benefiting a large segment of taxpayers. For incomes exceeding ₹12 lakh, the revised tax slabs are as follows:
Annual Income (₹)Tax Rate
- Up to ₹4,00,000 – Nil
- ₹4,00,001 to ₹8,00,000 – 5%
- ₹8,00,001 to ₹12,00,000 – 10%
- ₹12,00,001 to ₹16,00,000 – 15%
- ₹16,00,001 to ₹20,00,000 – 20%
- ₹20,00,001 to ₹24,00,000 – 25%
- Above ₹24,00,000 – 30%
Note: The old tax regime remains unchanged, allowing taxpayers to choose between the two based on their financial preferences.
Government’s Justification:
The rationale behind these adjustments is to simplify the tax system and increase disposable income, thereby boosting consumer spending and economic activity. By raising the tax-free income threshold and restructuring the tax slabs, the government aims to reduce the tax burden on the middle class and encourage voluntary compliance.
Impact on Different Income Groups:
- Low to Middle-Income Earners (Up to ₹12 lakh): These individuals will experience complete tax exemption, significantly increasing their take-home pay.
- Upper Middle-Income Earners (₹12 lakh to ₹24 lakh): This group will benefit from reduced tax rates across various slabs, leading to noticeable tax savings.
- High-Income Earners (Above ₹24 lakh): While the highest tax rate remains at 30%, the income threshold for this rate has been raised, offering marginal relief to high earners.
These reforms are expected to enhance consumer confidence, stimulate demand, and contribute to overall economic growth.
Income Tax Slab Rates for FY 2025-26 (AY 2026-27)
In the Union Budget 2025, the Indian government introduced significant changes to the income tax structure for the Financial Year (FY) 2025-26 (Assessment Year 2026-27). These revisions aim to simplify the tax system and provide relief to various taxpayer categories.
-
Salaried Employees:
For salaried individuals, the new tax regime offers revised slab rates:
| Annual Income (₹) | Tax Rate |
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 to ₹8,00,000 | 5% |
| ₹8,00,001 to ₹12,00,000 | 10% |
| ₹12,00,001 to ₹16,00,000 | 15% |
| ₹16,00,001 to ₹20,00,000 | 20% |
| ₹20,00,001 to ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Additionally, a standard deduction of ₹75,000 is available, effectively making income up to ₹12.75 lakh tax-free under the new regime.
-
Self-Employed Professionals:
Self-employed individuals, including freelancers and consultants, are subject to the same tax slabs as salaried employees under the new regime. However, they are not eligible for the standard deduction of ₹75,000. It’s essential for self-employed professionals to maintain accurate records of their income and expenses to ensure proper tax compliance.
-
Business Owners & Startups:
For businesses operating as Partnership Firms or Limited Liability Partnerships (LLPs), the tax rate remains at 30% of the total income. Companies, including startups, are taxed based on their turnover:
-
- Domestic Companies:
- Turnover up to ₹400 crore: 25%
- Turnover above ₹400 crore: 30%
- Domestic Companies:
These rates are consistent with previous fiscal policies and aim to promote business growth and compliance.
-
Hindu Undivided Families (HUFs) & Partnership Firms:
HUFs are taxed similarly to individual taxpayers, following the same slab rates as mentioned for salaried employees and self-employed professionals. Partnership firms, on the other hand, are subject to a flat tax rate of 30% on their total income, irrespective of the amount.
-
Companies, LLPs, and MSMEs:
-
- Limited Liability Partnerships (LLPs): Taxed at a flat rate of 30%.
- Micro, Small, and Medium Enterprises (MSMEs): Taxation depends on their business structure:
- Proprietorships are taxed as per individual slab rates.
- Partnerships and LLPs are taxed at 30%.
- Companies follow the corporate tax rates based on turnover as mentioned above.
These structured tax rates aim to provide clarity and consistency across different types of business entities, fostering an environment conducive to economic growth and compliance.
Note: Taxpayers have the option to choose between the old and new tax regimes based on their financial preferences and eligibility for deductions. It’s advisable to consult with our tax expert to determine the most beneficial regime for your specific circumstances.
New Tax Incentives Introduced in Budget 2025
The Union Budget 2025 has introduced several tax incentives aimed at reducing the tax burden and promoting economic growth. Here are the key changes:
- Higher Tax Exemption for Individuals
- Individuals earning up to ₹12 lakh per year now pay zero tax under the new regime.
- Salaried employees get an increased standard deduction of ₹75,000, raising the tax-free income limit to ₹12.75 lakh.
- Lower Corporate Tax for MSMEs
- Small and medium-sized businesses with turnover up to ₹500 crore will now pay a reduced corporate tax of 22% instead of 25%.
- Tax Relief for Startups
- The government has extended tax holidays for eligible startups, allowing them to enjoy income tax exemptions for a longer period.
- Incentives for Manufacturing Sector
- Lower tax rates for companies in the electronics manufacturing sector to attract investment.
- Reduced customs duties on key raw materials like steel and aluminum, making production cheaper.
- Support for Financial Services
- Tax benefits have been expanded for businesses operating in International Financial Services Centres (IFSCs) to attract global investments.
How to Benefit from These Changes?
- Salaried Individuals can maximize savings by choosing the right tax regime based on deductions and exemptions.
- MSMEs and Startups should check their eligibility for lower tax rates and tax holidays to save money.
- Manufacturers can leverage reduced customs duties to lower production costs.
- Businesses in Financial Services can explore operating in IFSCs for additional tax benefits.
By taking advantage of these new tax incentives, individuals and businesses can optimize tax savings and improve financial planning.
Revisions in Income Tax Slab Rates Over the Years
Over the past decade, India’s income tax slab rates have undergone significant revisions, reflecting the government’s efforts to balance revenue generation with taxpayer relief.
Historical Perspective:
- 2015-2016: The basic exemption limit was ₹2.5 lakh for individuals below 60 years, ₹3 lakh for senior citizens (60-80 years), and ₹5 lakh for super senior citizens (above 80 years). The highest tax rate was 30% for incomes above ₹10 lakh.
- 2019-2020: The government introduced a full tax rebate for individuals with taxable income up to ₹5 lakh under Section 87A, effectively reducing their tax liability to zero.
- 2020-2021: A new optional tax regime was introduced with reduced tax rates but without exemptions and deductions. Taxpayers could choose between the old regime with deductions or the new simplified regime.
- 2023-2024: The basic exemption limit under the new tax regime was raised to ₹3 lakh, with a 5% tax rate for income between ₹3 lakh and ₹6 lakh, and the highest rate of 30% for income above ₹15 lakh.
- 2025-2026: The Union Budget 2025 further revised the new tax regime, increasing the tax-free income threshold to ₹12 lakh, with a standard deduction of ₹75,000. The highest tax rate of 30% now applies to income above ₹24 lakh.
Recent years have seen a trend towards simplifying the tax structure and increasing the tax-free income thresholds. The introduction of an optional tax regime provides flexibility, allowing taxpayers to choose based on their financial situations. The significant increase in the basic exemption limit in 2025 aims to boost disposable income and stimulate economic growth.
These changes have generally reduced the tax burden for middle and lower-income groups, providing more disposable income and encouraging spending. However, taxpayers must carefully assess which tax regime—old with deductions or new without—best suits their financial circumstances to maximize benefits.
Old Regime vs. New Regime: Which One to Choose?
Choosing between the Old Tax Regime and the New Tax Regime depends on your income structure, deductions, and financial goals. The table below highlights key differences to help you decide:
|
Criteria |
Old Tax Regime |
New Tax Regime |
| Tax Rates | Higher rates | Lower rates |
| Deductions & Exemptions | Available (e.g., 80C, 80D, HRA) | Limited (Standard deduction of ₹75,000) |
| Who Benefits? | Taxpayers with high deductions and exemptions | Those with fewer investments or deductions |
| Investment Requirement | Encourages tax-saving investments | No compulsion for tax-linked investments |
| Flexibility | More benefits for structured tax planning | Simpler, with minimal documentation |
| Best for | Salaried individuals, those investing in tax-saving instruments | Freelancers, consultants, those who prefer a simplified tax process |
Which Regime Should You Choose?
| If You… | Choose This Regime |
| Have substantial deductions under 80C, 80D, and HRA | Old Regime |
| Prefer simpler tax filing with fewer calculations | New Regime |
| Want to maximize tax savings through investments | Old Regime |
| Have no major deductions or exemptions | New Regime |
| Earn high salary but fewer investments | New Regime |
| Are a freelancer or consultant with no salary-based deductions | New Regime |
Tax Saving Strategies for Each Regime
| Strategy | Old Regime | New Regime |
| Maximize 80C Investments | ✅ | ❌ |
| Claim HRA for Rent Payments | ✅ | ❌ |
| Utilize Health Insurance Deductions (80D) | ✅ | ❌ |
| Leverage Lower Tax Slabs | ❌ | ✅ |
| Choose Simpler Compliance | ❌ | ✅ |
Deductions and Exemptions Under Income Tax Regimes
Taxpayers can lower their taxable income using various deductions and exemptions, but the availability of these benefits differs between the Old and New Tax Regimes. Below is a comparison of key deductions and exemptions under both regimes.
Common Deductions & Exemptions
|
Deduction / Exemption |
Old Regime |
New Regime |
| Section 80C (₹1.5 lakh limit) – PPF, EPF, NSC, ELSS, Life Insurance, etc. | ✅ Available | ❌ Not Available |
| Section 80D – Health insurance premium deduction | ✅ Available | ❌ Not Available |
| House Rent Allowance (HRA) | ✅ Available | ❌ Not Available |
| Standard Deduction | ✅ ₹50,000 | ✅ ₹75,000 |
| Section 80E – Education loan interest | ✅ Available | ❌ Not Available |
| Section 80TTA/80TTB – Savings & Fixed Deposit Interest | ✅ Available | ❌ Not Available |
| Leave Travel Allowance (LTA) | ✅ Available | ❌ Not Available |
| Section 80G – Donations to charity | ✅ Available | ❌ Not Available |
| Home Loan Interest (Section 24B, ₹2 lakh limit) | ✅ Available | ❌ Not Available |
NRI Income Tax Slab Rates & Tax Implications
Non-Resident Indians (NRIs) are subject to Indian income tax on income earned or accrued within India. The tax rates and implications for NRIs differ from those for resident Indians, primarily due to the nature of income and applicable deductions.
NRI Income Tax Slab Rates for FY 2024-25 (AY 2025-26):
NRIs have the option to choose between the old tax regime and the new tax regime introduced in the Union Budget 2025.
Old Tax Regime:
| Annual Income (₹) | Tax Rate |
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 to ₹5,00,000 | 5% |
| ₹5,00,001 to ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
New Tax Regime:
| Annual Income (₹) | Tax Rate |
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 to ₹8,00,000 | 5% |
| ₹8,00,001 to ₹12,00,000 | 10% |
| ₹12,00,001 to ₹16,00,000 | 15% |
| ₹16,00,001 to ₹20,00,000 | 20% |
| ₹20,00,001 to ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Comparison of Tax Slabs: NRIs vs. Resident Indians
| Annual Income (₹) | Tax Rate for NRIs | Tax Rate for Residents |
| Up to ₹2,50,000 | Nil | Nil |
| ₹2,50,001 to ₹5,00,000 | 5% | 5% |
| ₹5,00,001 to ₹10,00,000 | 20% | 20% |
| Above ₹10,00,000 | 30% | 30% |
Double Tax Avoidance Agreement (DTAA):
India has DTAA treaties with various countries to prevent double taxation. NRIs can benefit by:
- Claiming Tax Credits: Taxes paid in the country of residence can be offset against tax payable in India on the same income.
- Reduced Tax Rates: Certain income types, like royalties or fees, may attract lower tax rates under DTAA provisions.
Taxation of Income:
- Indian Income: Income earned or accrued in India (e.g., rental income, salary for services rendered in India) is taxable in India.
- Global Income: NRIs are generally not taxed in India on income earned outside India, unless it is received directly into an Indian bank account.
NRIs should assess their income sources and consult our tax professionals to understand the complexities of Indian taxation and make informed decisions.
Income Tax Slab Rates for Senior Citizens & Special Categories
In India, income tax rates and benefits vary based on age and specific taxpayer categories. Here’s an overview of the tax slab rates and benefits for senior citizens, super senior citizens, specially-abled individuals, and women taxpayers for the Financial Year (FY) 2024-25 (Assessment Year 2025-26).
-
Senior Citizens (Aged 60 to 79 Years):
Senior citizens are eligible for a higher basic exemption limit under the old tax regime.
Old Tax Regime:
| Annual Income (₹) | Tax Rate |
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 to ₹5,00,000 | 5% |
| ₹5,00,001 to ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
New Tax Regime:
| Annual Income (₹) | Tax Rate |
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 to ₹5,00,000 | 5% |
| ₹5,00,001 to ₹7,50,000 | 10% |
| ₹7,50,001 to ₹10,00,000 | 15% |
| ₹10,00,001 to ₹12,50,000 | 20% |
| ₹12,50,001 to ₹15,00,000 | 25% |
| Above ₹15,00,000 | 30% |
-
Super Senior Citizens (Aged 80 Years and Above):
Super senior citizens enjoy an even higher exemption limit under the old tax regime.
Old Tax Regime:
| Annual Income (₹) | Tax Rate |
| Up to ₹5,00,000 | Nil |
| ₹5,00,001 to ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
New Tax Regime:
| Annual Income (₹) | Tax Rate |
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 to ₹5,00,000 | 5% |
| ₹5,00,001 to ₹7,50,000 | 10% |
| ₹7,50,001 to ₹10,00,000 | 15% |
| ₹10,00,001 to ₹12,50,000 | 20% |
| ₹12,50,001 to ₹15,00,000 | 25% |
| Above ₹15,00,000 | 30% |
-
Specially-Abled Individuals:
Individuals with disabilities are entitled to specific deductions under Section 80U of the Income Tax Act.
- Disability (40% to 79%): Deduction of ₹75,000.
- Severe Disability (80% and above): Deduction of ₹1,25,000.
This deduction is available irrespective of the actual expenses incurred and can be claimed by the individual with a disability.
-
Women Taxpayers:
Currently, there are no specific income tax slab benefits or exemptions exclusively for women taxpayers. They are subject to the same tax rates as male taxpayers. However, women can avail general deductions under sections like 80C, 80D, etc., similar to other individual taxpayers.
Comparison of Tax Slabs: Senior Citizens vs. Regular Taxpayers
|
Annual Income (₹) |
Regular Taxpayers | Senior Citizens |
Super Senior Citizens |
| Up to ₹2,50,000 | Nil | Nil | Nil |
| ₹2,50,001 to ₹3,00,000 | 5% | Nil | Nil |
| ₹3,00,001 to ₹5,00,000 | 5% | 5% | Nil |
| ₹5,00,001 to ₹10,00,000 | 20% | 20% | 20% |
| Above ₹10,00,000 | 30% | 30% | 30% |
Note: The above comparison is based on the old tax regime. Under the new tax regime, tax slabs are uniform across all individuals, regardless of age.
Impact on Middle-Class Taxpayers
The Union Budget 2025 introduced significant tax reforms aimed at providing relief to middle-class taxpayers, particularly salaried individuals. These changes are designed to increase disposable income, thereby boosting consumption and economic growth.
Impact on Salaried Middle-Class Individuals:
- Increased Tax Exemption Limit: The new tax regime exempts income up to ₹12 lakh from taxation, effectively reducing the tax burden for many middle-income earners.
- Standard Deduction Enhancement: Salaried employees now benefit from a higher standard deduction of ₹75,000, further lowering taxable income.
Deductions Beneficial for Middle-Income Groups:
While the new tax regime offers lower tax rates, it limits the availability of certain deductions. However, under the old tax regime, taxpayers can still avail themselves of various deductions to reduce taxable income:
- Section 80C: Allows deductions up to ₹1.5 lakh for investments in instruments like Public Provident Fund (PPF), Employee Provident Fund (EPF), National Savings Certificates (NSC), and Equity-Linked Savings Schemes (ELSS).
- Section 80D: Permits deductions for health insurance premiums, up to ₹25,000 for individuals and ₹50,000 for senior citizens.
- House Rent Allowance (HRA): Enables salaried individuals living in rented accommodations to claim deductions on rent paid, subject to certain conditions.
Tax Savings Strategies:
- Assessing Tax Regimes: Evaluate both the old and new tax regimes to determine which offers greater tax benefits based on individual financial situations.
- Maximizing Deductions: Under the old regime, fully utilize available deductions by investing in eligible schemes and maintaining necessary documentation.
- Strategic Investments: Consider long-term investment options that offer tax benefits, such as PPF, ELSS, and National Pension System (NPS), aligning with financial goals and risk appetite.
Case Study Example:
Consider a salaried individual with an annual income of ₹15 lakh:
- Under the New Tax Regime:
- Taxable Income: ₹15,00,000
- Standard Deduction: ₹75,000
- Net Taxable Income: ₹14,25,000
- Applicable Tax Rates: As per the new slabs
- Total Tax Payable: Calculated based on the new rates
- Under the Old Tax Regime:
- Taxable Income: ₹15,00,000
- Deductions (e.g., 80C, 80D, HRA): Assuming total deductions of ₹3,00,000
- Net Taxable Income: ₹12,00,000
- Applicable Tax Rates: As per the old slabs
- Total Tax Payable: Calculated based on the old rates
In this scenario, the individual should compare the total tax payable under both regimes to decide which is more beneficial.
Corporate Tax Implications & Startups
In India, corporate taxation varies based on the nature and size of the business entity. The Union Budget 2025 introduced specific provisions affecting both established corporations and startups.
Corporate Tax Rates:
The applicable tax rates for domestic companies are as follows:
Company Type Tax Rate Surcharge Health & Education Cess Domestic companies with turnover up to ₹400 crore25%7% (income > ₹1 crore up to ₹10 crore)
12% (income > ₹10 crore)4%Companies opting for Section 115BAA22%10%4%Newly incorporated manufacturing companies under Section 115BAB15%10%4%Other domestic companies30%7% (income > ₹1 crore up to ₹10 crore)
12% (income > ₹10 crore)4%
Note: Sections 115BAA and 115BAB offer reduced tax rates for companies meeting specific conditions, such as not availing certain deductions or commencing manufacturing within prescribed timelines.
Startup Tax Benefits:
To foster innovation and entrepreneurship, the government provides tax incentives for eligible startups:
- Tax Holiday: Startups recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) can avail a 100% tax exemption on profits for three consecutive years out of their first ten years since incorporation.
- Extended Incorporation Period: The eligibility period for claiming this tax holiday has been extended. Startups incorporated up to April 1, 2030, can now benefit from these exemptions.
Compliance Considerations:
Startups and businesses must adhere to specific compliance requirements to avail these tax benefits:
- DPIIT Recognition: Ensure your startup is recognized by DPIIT to access various tax exemptions and incentives.
- Timely Filings: Regularly file income tax returns and maintain accurate financial records to comply with statutory obligations.
- Opting for Concessional Tax Rates: Companies choosing reduced tax rates under Sections 115BAA or 115BAB must forgo certain deductions and adhere to specified conditions.
By understanding and leveraging these tax provisions, startups and established businesses can optimize their tax liabilities and contribute to India’s economic growth.
Economic Factors Influencing Income Tax Slab Rates
Income tax slab rates are revised periodically based on economic conditions, government policies, and long-term fiscal goals. Key factors influencing these revisions include inflation, fiscal deficit, and economic growth strategies.
1. Inflation Considerations
- Inflation reduces purchasing power, prompting the government to increase the basic exemption limit to ensure tax rates remain fair.
- For example, in previous budgets, tax-free income limits were raised to adjust for rising living costs, benefiting middle-class taxpayers.
- Failure to revise slabs in line with inflation can lead to higher effective taxation on the same income levels.
2. Fiscal Deficit & Government Policies
- The government must balance tax relief and revenue generation to manage the fiscal deficit.
- Reducing tax rates increases disposable income but lowers government revenue, impacting public spending and welfare programs.
- In recent budgets, tax reforms have focused on simplifying tax structures while maintaining stable revenue streams.
3. Alignment with Long-Term Economic Goals
- Tax policies are aligned with national goals like economic growth, digital transformation, and ease of doing business.
- The introduction of the new tax regime with lower rates but fewer exemptions aligns with the objective of a simplified tax system.
- Progressive tax reforms ensure higher earners contribute more, reducing wealth inequality while fostering economic stability.
Taxation of High-Income Earners
High-income earners in India are subject to additional surcharges, capital gains tax, and wealth management considerations. Proper tax planning is crucial to minimize liabilities while ensuring compliance.
1. Additional Surcharge for High-Income Groups
Individuals earning above ₹50 lakh are subject to a progressive surcharge:
| Annual Income (₹) | Surcharge Rate |
| ₹50 lakh – ₹1 crore | 10% |
| ₹1 crore – ₹2 crore | 15% |
| ₹2 crore – ₹5 crore | 25% |
| Above ₹5 crore | 37% (Reduced to 25% under new tax regime) |
- In addition to the surcharge, a 4% health and education cess is levied on the total tax payable.
2. Wealth Tax & Capital Gains Considerations
- Wealth Tax: Abolished in India, but net worth above ₹50 crore may attract increased scrutiny under Black Money Act & Benami Property Act.
- Capital Gains Tax:
- Short-term gains (STCG): 15% on listed equities, taxed at slab rates for other assets.
- Long-term gains (LTCG): 10% on equity (above ₹1 lakh), 20% (with indexation) on real estate and other assets.
3. Tax Planning for High Net-Worth Individuals (HNIs)
- Optimizing Deductions: Maximize investments in tax-exempt bonds, NPS, and insurance.
- Strategic Investments: Leverage capital gains exemptions under Sections 54, 54EC for real estate and bonds.
- Diversification: Invest in tax-efficient instruments like ULIPs, AIFs, and international assets to optimize taxation.
How to Plan Your Taxes Smartly for FY 2025-26?
Proper tax planning ensures lower tax liability, compliance, and maximized savings. Follow this structured approach to make the most of available tax benefits.
Quick Tax Planning Checklist
1. Choose the Right Tax Regime
-
- Compare tax liability under the Old vs. New Regime before filing.
- Opt for the Old Regime if you claim multiple deductions like 80C, 80D, HRA.
- Choose the New Regime for lower tax rates with minimal documentation.
2. Maximize Deductions & Exemptions
-
- Use Section 80C to claim up to ₹1.5 lakh on investments like PPF, EPF, and life insurance.
- Claim deductions under 80D for health insurance premiums.
- If eligible, utilize House Rent Allowance (HRA) and home loan interest deductions under Section 24(b).
3. Avoid Common Tax Filing Mistakes
-
- Ensure all income sources are reported, including interest and rental income.
- Verify TDS deductions in Form 26AS before filing returns.
- Choose the correct income tax return (ITR) form based on your income type.
Proper tax planning helps reduce tax burden and ensure compliance. If you are unsure about your tax calculations or need assistance with choosing the right regime, claiming deductions, or filing returns, consult a professional. Vakilsearch offers end-to-end tax solutions, ensuring hassle-free tax filing. Get Expert Tax Assistance Now
DisclaimerThe information in this article is for general awareness and should not be taken as tax or financial advice. Tax rules change, and what applies to one person may not apply to another. For guidance tailored to your situation, speak with a tax professional. VakilSearch can help with tax planning, choosing the right regime, and filing returns accurately. Get in touch with our experts for assistance. |
FAQs
How to calculate income tax slab rates?
Income tax is calculated based on applicable slab rates for your income category. Tax is applied progressively, meaning different portions of income are taxed at different rates. After calculating tax liability, applicable deductions and rebates are subtracted to determine the final tax payable.
What are the income tax slab rates for the current assessment year?
The income tax slab rates for Assessment Year (AY) 2024-25 vary under the old and new tax regimes. In the old regime, slabs start at ₹2.5 lakh, while in the new regime, the exemption limit is ₹3 lakh. Tax rates range from 5% to 30% depending on income levels.
What are the key differences between the old and new income tax slab rates?
The old tax regime offers higher tax rates but allows various deductions and exemptions (like 80C, HRA, and home loan interest). The new tax regime has lower tax rates but removes most deductions and exemptions, except for a standard deduction.
What are the income tax slab rates for senior citizens in AY 2024-25?
Senior citizens (aged 60-79 years) have a higher exemption limit of ₹3 lakh under the old regime. Super senior citizens (80 years and above) have an exemption limit of ₹5 lakh. The tax rates for other slabs remain the same as for regular taxpayers. The new tax regime does not offer special exemptions for senior citizens.
Are there any changes in NRI income tax slab rates in the latest assessment year?
NRIs are taxed at the same slab rates as resident individuals, but they do not get the benefit of the higher exemption limit available to senior citizens. As of AY 2024-25, NRIs must pay tax on income earned in India, with rates starting from ₹2.5 lakh, and surcharges applying on higher incomes.
