By callmepandeyji.com 
New Income Tax Slabs for FY 2025-26 (Budget 2025)
The Finance Minister, Nirmala Sitharaman, announced sweeping changes to the income tax regime in Budget 2025, aimed at providing relief to middle-income earners and simplifying the tax structure. Here are the key details:
Income Tax Slabs under the New Tax Regime: (Budget 2025)
- Income up to ₹4 lakh: No tax
- Income from ₹4 lakh to ₹8 lakh: 5% tax rate
- Income from ₹8 lakh to ₹12 lakh: 10% tax rate
- Income from ₹12 lakh to ₹16 lakh: 15% tax rate
- Income from ₹16 lakh to ₹20 lakh: 20% tax rate
- Income from ₹20 lakh to ₹24 lakh: 25% tax rate
- Income above ₹24 lakh: 30% tax rate
Key Highlights: Budget 2025
- No Income Tax for Incomes up to ₹12 lakh: One of the most significant announcements is that individuals earning up to ₹12 lakh (excluding special rate income like capital gains) will not have to pay any income tax. This threshold extends to ₹12.75 lakh for salaried individuals, factoring in the standard deduction of ₹75,0001.
- Standard Deduction: The standard deduction for salaried individuals remains at ₹75,000.
- Old Tax Regime: The income tax slabs under the old tax regime remain unchanged. Taxpayers can choose between the new and old tax regimes based on their deductions and exemptions1.
- Tax Rebate under Section 87A: The limit for rebate under Section 87A has been enhanced from ₹7 lakh to ₹12 lakh, providing additional relief to low-income taxpayers.
- Simplification of Tax Structure: The new tax regime aims to simplify the tax structure by reducing the number of tax slabs and providing a higher tax-free threshold.
Comparison of the old and new income tax slabs for FY 2025-26: Budget 2025
| Income Range (₹) | Old Tax Regime | New Tax Regime |
|---|---|---|
| Up to 2,50,000 | NIL | NIL |
| 2,50,001 – 3,00,000 | 5% | NIL |
| 3,00,001 – 5,00,000 | 5% | 5% |
| 5,00,001 – 7,00,000 | 10% | 5% |
| 7,00,001 – 10,00,000 | 20% | 10% |
| 10,00,001 – 12,00,000 | 30% | 15% |
| 12,00,001 – 15,00,000 | 30% | 15% |
| 15,00,001 – 20,00,000 | 30% | 20% |
| 20,00,001 – 24,00,000 | 30% | 25% |
| Above 24,00,000 | 30% | 30% |
Impact on Taxpayers: (Budget 2025)
- Middle-Class Relief: The new tax slabs are designed to benefit middle-class taxpayers by reducing their tax burden and increasing their disposable income.
- Encouragement for Savings and Investment: By providing tax relief, the government aims to encourage savings and investment, which can contribute to economic growth.
Example Calculations: (Budget 2025)
- At ₹12 lakh income level: Complete tax exemption.
- At ₹18 lakh income level: Tax reduction of ₹70,000 (30% of previous tax liability).
- At ₹25 lakh income level: Tax saving of ₹1,10,000 (25% of previous tax liability)
Read in Hindi: – Budget 2025 in Hindi. Budget 2025
Read more in The Economic Times Budget 2025
8th Pay Commission Approved For Central Govt Employees 2025 – Service Desk Support Budget 2025
Key Differences: Budget 2025
- Higher Tax-Free Threshold: The new tax regime offers a higher tax-free threshold, with no tax on income up to ₹12 lakh (excluding special rate income like capital gains).
- Simplification: The new tax regime simplifies the tax structure by reducing the number of tax slabs.
- No Deductions/Exemptions: The new tax regime does not allow deductions and exemptions like Section 80C, 80D, HRA, etc., which are available under the old regime.
- Standard Deduction: Both regimes offer a standard deduction of ₹75,000 for salaried individuals.
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Written by Callmepandeyji (Abhishek Kumar)