The Indian government has made some significant modifications regarding tax slabs for taxes on income in the new tax system with the intention of easing tax compliance and offer relief for taxpayers. If you’re preparing your tax return this year, or making plans for the coming year tax year, knowing the slab rates is vital. Here’s a complete guide to the Income Tax Slab Rates for FY 2025-26 as well as FY 2024-25 and comparisons between the both the old and new tax rules, tax rebates and tips for maximizing your tax burden.
Income Tax Slab Rates – At a Glance
New Regime Income Tax Slab Rates FY 2025-26 (AY 2026-27)
| Income Slab | Tax Rate |
|---|---|
| Up to Rs 4 lakh | NIL |
| Rs4 lakh – Rs8 lakh | 5% |
| Rs8 lakh – Rs12 lakh | 10% |
| Rs12 lakh – Rs16 lakh | 15% |
| Rs16 lakh – Rs20 lakh | 20% |
| Rs20 lakh – Rs24 lakh | 25% |
| More than 24 lakhs of rupees | 30% |
Tax Alert for Rebate: The rebate under section A 87A increased to Rs60,000. Tax deduction standard for employees: R75,000 In effect NIL tax liability to Rs12.75 lakh
New Regime Tax Rates for FY 2024-25 (AY 2025-26)
| Income Slab | Tax Rate |
|---|---|
| Up to Rs 3 lakh | NIL |
| Rs3 lakh – Rs7 lakh | 5% |
| Rs7 lakh – Rs10 lakh | 10% |
| Rs10 lakh – Rs12 lakh | 15% |
| Rs12 lakh – Rs15 lakh | 20% |
| More than the threshold of Rs15 lakh | 30% |
Old Regime Tax Rates for FY 2025-26 & FY 2024-25
Individuals Below 60 Years of Age:
| Income Slab | Tax Rate |
|---|---|
| up to Rs2.5 lakh | NIL |
| Rs2.5 lakh – Rs5 lakh | 5% |
| Rs5 lakh – Rs10 lakh | 20% |
| Over the threshold of Rs10 lakh | 30% |
Senior citizens (60-80 to 80):
| Income Slab | Tax Rate |
|---|---|
| As high as Rs3 lakh | NIL |
| Rs3 lakh – Rs5 lakh | 5% |
| Rs5 lakh – Rs10 lakh | 20% |
| Over 10 lakhs of Rs. | 30% |
Super Senior Citizens (80plus years):
| Income Slab | Tax Rate |
|---|---|
| As high as Rs5 lakh | NIL |
| Rs5 lakh – Rs10 lakh | 20% |
| Over 10 lakhs of Rs. | 30% |
Notification:
Rebate of Rs12,500 in Section 87A is available to taxpayers with income up to Rs 5 lakh.
Key Features of New Regime (FY 2025-26)
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The same applies to everyone equally (including seniors)
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No deductions unless:
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Standard deduction of Rs75,000 for salaried employees.
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NPS Employer Contribution (up to 14%)
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Family pension deductions was increased to Rs25,000
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Maximum surcharge cap at 25 25%
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The default tax regime unless the previous system is selected
Tax Calculation Examples – New vs Old Regime
Case 1: Income Rs10 Lakh
| Components | New Regime | Old Regime |
|---|---|---|
| Gross Income | Rs10,00,000 | Rs10,00,000 |
| Deductions (HRA, LTA, 80C, etc.) | Not Applicable | Rs4,17,000 |
| Standard Deduction | Rs75,000 | Rs50,000 |
| Taxable Income | Rs9,25,000 | Rs5,83,000 |
| Tax payable (with the possibility of a cess) | Rs44,200 | Rs30,264 |
Old regime prevails here due to huge deductions.
Case 2: Income Rs15 Lakh
| Components | New Regime | Old Regime |
|---|---|---|
| Gross Income | Rs15,00,000 | Rs15,00,000 |
| Deductions (HRA, LTA, 80C, etc.) | Not Applicable | Rs4,17,000 |
| Standard Deduction | Rs75,000 | Rs50,000 |
| Taxable Income | Rs14,25,000 | Rs10,83,000 |
| Tax payable (with the cess) | Rs1,30,000 | Rs1,42,896 |
The new regime can be more beneficial since income grows and deductions are reduced.
Surcharge & Cess Rates
| Income Level | Surcharge Rate (New Regime) |
|---|---|
| Amount: Rs50 lakh – Rs1 Crore | 10% |
| The amount is Rs1 crore to Rs2 crore | 15% |
| The amount ranges from Rs2 crore to Rs5 crore. | 25% |
| More than 5 crores of Rs. | 25 percent (reduced from 37 percentage) |
Note that for capital gains (sections 111A, 112A, the 115AD) Maximum surcharge = 15 percent
Health and Education Cess An additional 4% tax on earnings plus surcharge
Which Tax Regime Should You Choose?
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Choose New Regime if:
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There aren’t many deductions
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Do you prefer a simpler filing process?
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In the event of a surplus, income exceeds Rs12 lakh, there are significant exemptions
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Stay with the the Old Regime You are:
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You can get huge deductions under 80C, 80D HRA, etc.
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You are a big investor in tax-saving instruments
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Download Income Tax Slabs PDF for FY 2025-26 & FY 2024-25
Want a quick reference? Download the PDF tax slabs here (insert the actual link)
Final Thoughts
The revised rate of income tax for FY 2025 to 26 offer significant relief, particularly for middle-income earners who are subject to the new tax regime. However it’s true that the older regime is still a good option when you’re using deductions heavily. Select the one that reduces your tax burden, while also aligning with your financial goals. Get expert help from a Tax Consultant or the Best CA Firm to ensure you’re not overpaying your taxes in FY 2025-26.
Keep up-to-date. Plan better. File smarter.
