Income Tax Slabs and Rates for FY 2025-26 (AY 2026-27)

The income tax slabs for 2025 bring welcome relief to taxpayers, simplifying the structure and reducing liabilities. With income up to ₹4 lakhs now tax-free and progressive rates ensuring fair taxation, many individuals will see greater savings. Plus, the Section 87A rebate allows incomes up to ₹12 lakhs to enjoy zero tax liability. Knowing these updates will help you calculate income tax accurately and make informed financial decisions.

Latest Income Tax Slabs in 2025 Post-Budget Updates

The Union Budget 2025 has introduced significant updates to income tax slabs, ensuring a streamlined and taxpayer-friendly system. The emphasis remains on reducing tax burdens, promoting compliance, and making the new tax regime the default choice. Notable changes include an increased rebate available under Section 87A, allowing incomes up to ₹12 lakhs to remain tax-free. Additionally, the basic exemption limit has been revised to ₹4 lakhs, making taxation more favorable for lower and middle-income groups.

New Income Tax Slabs and Rates for FY 2025-26 (AY 2026-27) After Budget Announcements

The income tax slabs introduced in the Union Budget aim to provide tax relief while simplifying compliance. The revised structure continues to make the new tax regime the default option, ensuring lower rates across multiple income brackets. A key highlight is the increased rebate available under Section 87A, making incomes up to ₹12 lakhs tax-free. Additionally, the basic exemption limit has been raised to ₹4 lakhs which further reduces the tax burden.

Taxpayers must carefully evaluate their liability and use an income tax slabs comparison to determine the best regime. Below is the updated income tax slabs table for FY 2025-26 (AY 2026-27):

These changes are expected to ease tax payments and help individuals calculate income tax more efficiently.

Breaking Down the New Income Tax Slabs for FY 2025-26 & AY 2026-27

The income tax slabs in 2025 have been revised to offer tax relief while maintaining a simplified structure. With the basic exemption limit now raised to ₹4 lakhs, lower-income groups benefit significantly. Additionally, the rebate available under Section 87A ensures that individuals earning up to ₹12 lakhs pay no tax, making it essential to calculate income tax accurately.

The income tax slabs comparison shows that middle-income taxpayers will experience reduced tax liability. For salaried individuals, the standard deduction of ₹75,000 remains available, further lowering taxable income. High-income earners will continue to pay a 30 percent tax on earnings above ₹24 lakhs, with surcharge rates remaining unchanged.

Below is the detailed income tax slabs structure for FY 2025-26 (AY 2026-27):

This revised structure helps individuals and senior citizens make informed financial decisions when choosing their tax regime.

Tax Savings Overview Under the Updated Tax Regime

The revised income tax slabs in 2025 offer substantial tax savings, especially for middle-income earners. With the rebate available under Section 87A now applicable for incomes up to ₹12 lakhs, many taxpayers will experience lower liabilities. The income tax slabs comparison highlights how the new structure reduces overall tax burdens. Below is a breakdown of tax savings under the updated regime:

Existing vs. Proposed Tax Savings

Taxpayers can use these insights to calculate income tax efficiently and plan better financial investments.

Upcoming Tax Changes and Policy Announcements for 2025

The Union Budget 2025 has introduced key reforms to enhance tax compliance and provide relief to taxpayers. The income tax slabs in 2025 have been restructured to ensure lower tax burdens across income groups. Additionally, new measures aim to streamline tax filing and encourage financial planning. Understanding these changes is crucial for accurate tax planning and to calculate income tax effectively.

Key Tax Changes and Announcements

• Increased Tax Rebate – Section 87A rebate now applies to incomes up to ₹12 lakhs, ensuring zero tax liability.

• Higher Basic Exemption – Exemption limit lifted to ₹4 lakhs under the new tax regime.

• Senior Citizen Benefits – The deduction limit for senior citizens has doubled from ₹50,000 to ₹1 lakhs.

• TDS Revisions – Rationalization of TDS on various income sources to simplify compliance.

• Marginal Relief for ₹12 lakhs+ Earners – Ensures no sudden tax spikes for incomes slightly above ₹12 lakhs.

These updates make it essential to review the income tax slabs comparison before filing returns.

Income Tax Benefits Across Different Income Categories (₹0-₹24 lakhss)

The revised income tax slabs in 2025 provide varying benefits across different income categories. Taxpayers earning up to ₹12 lakhs can benefit from a full rebate available under Section 87A, ensuring zero tax liability. Additionally, those earning between ₹12 lakhs and ₹24 lakhs will see lower tax rates compared to previous years. The income tax slabs comparison below highlights how the updated tax structure impacts different income levels.

Income Tax Calculation for Different Income Brackets (FY 2025-26, AY 2026-27)

These savings help taxpayers effectively calculate income tax and choose the best tax regime based on their financial profile.

Explaining Marginal Relief in Income Tax

Marginal relief is a provision in the tax system that prevents a sharp increase in tax liability for individuals whose income slightly exceeds a rebate threshold. Under the income tax slabs in 2025, individuals earning up to ₹12 lakhs are eligible for a full rebate available under Section 87A. However, those earning slightly more would otherwise face a significant jump in tax liability. Marginal relief ensures that the additional tax payable does not exceed the excess income over ₹12 lakhs.

Below is a detailed income tax slabs comparison showcasing the effect of marginal relief:

Marginal Relief Computation for FY 2025-26 (AY 2026-27)

This provision helps individuals calculate income tax accurately and ensures a fair tax burden for those just above the rebate limit.

Step-by-Step Guide to Calculating Marginal Relief

Marginal relief is a tax provision designed to ensure that individuals earning slightly above the rebate threshold do not face an excessive increase in tax liability. With the income tax slabs in 2025, individuals earning up to ₹12 lakhs are fully exempt from tax due to the Section 87A rebate. However, those earning just above ₹12 lakhs could experience a steep tax hike. Marginal relief adjusts this by capping the additional tax payable to the excess income over ₹12 lakhs.

Steps to Calculate Marginal Relief

1. Compute Tax as per Slab Rates – Calculate tax liability based on the applicable income tax slabs.

2. Determine Excess Income Over ₹12 lakhs – Subtract ₹12 lakhs from total taxable income.

3. Compare Tax Liability & Excess Income – If the computed tax is higher than the excess income, marginal relief applies.

4. Adjust Tax Payable – Reduce tax to match the excess income amount.

Marginal Relief Calculation for FY 2025-26 (AY 2026-27)

This structured approach ensures taxpayers can accurately calculate income tax and leverage marginal relief benefits effectively.

Understanding the Concept of an Income Tax Slab

An income tax slab is a structured taxation system where different income levels are taxed at progressively increasing rates. This ensures fairness by imposing higher taxes on higher earnings while providing relief to lower-income individuals. The income tax slabs in 2025 define tax brackets and applicable rates, helping individuals calculate income tax accurately.

Key Features of Income Tax Slabs

• Progressive Taxation – Higher income attracts higher tax rates.

• Age-Based Exemptions – Different slabs exist for senior and super senior citizens.

• Annual Revisions – Slabs are updated during the Union Budget.

• Choice of Regime – Taxpayers can select between the old and new tax regimes.

Key Features of the New Tax Regime for FY 2025-26 (AY 2026-27)

The income tax slabs in 2025 introduced significant changes aimed at simplifying tax compliance and reducing the tax burden for individuals. The new tax regime continues as the default option, requiring taxpayers to opt for the old regime actively. With increased rebate limits and revised tax slabs, it offers a more structured approach to taxation while eliminating several deductions and exemptions.

Key Features of the New Tax Regime

• Higher Basic Exemption – The tax-free income limit has increased from ₹3 lakhs up to ₹4 lakhs.

• Enhanced Tax Rebate – Section 87A rebate raised to ₹60,000, making income up to ₹12 lakhs tax-free.

• Simplified Tax Structure – Fewer tax slabs with lower rates for incomes falling between ₹4 lakhs and ₹24 lakhs.

• Standard Deduction – Salaried individuals can claim a deduction of ₹75,000.

• Income Tax Slabs Comparison – The new regime does not allow deductions under Sections 80C, 80D, and 80TTA.

• Senior Citizen Benefits – The deduction limit for income tax slabs for senior citizens has doubled to ₹1 lakhs.

Taxpayers must assess their financial situation carefully to calculate income tax effectively and choose the most beneficial tax regime.

How Income Up to ₹12 lakhss Can Be Tax-Free in 2025?

Under the income tax slabs in 2025, individuals earning up to ₹12 lakhs can enjoy complete tax exemption due to the enhanced Section 87A rebate. This rebate ensures that no tax is payable for taxable incomes up to ₹12 lakhs, significantly reducing tax liability for middle-income earners.

Example 1: Individual with ₹12 lakhs Salary

1. Tax Calculation Before Rebate:

• ₹0 to ₹4 lakhs: No tax payable
• Between ₹4 lakhs and ₹8 lakhs: 5 percent of ₹4 lakhs = ₹20,000
• Between ₹8 lakhs and ₹12 lakhs: 10 percent of ₹4 lakhs = ₹40,000
• Total tax: ₹60,000

2. Rebate Under Section 87A:

• ₹60,000 rebate completely offsets tax, making final tax ₹0.

Example 2: Salaried Individual with ₹12.75 lakhs Income

1. Standard Deduction of ₹75,000 reduces taxable income to ₹12 lakhs.

2. Tax Before Rebate = ₹60,000, offset by ₹60,000 rebate, making tax payable ₹0.

Key Benefits:

●      Higher income tax slabs for senior citizens allow more savings.

●      No deductions required to avail tax-free income.

●      Helps taxpayers calculate income tax efficiently and plan finances better.

Tax Scenarios Under the New Regime for FY 2025-26 (AY 2026-27)

The income tax slabs in 2025 introduce structured tax rates with a higher exemption limit and a rebate available under Section 87A for incomes up to ₹12 lakhs. Below are different tax scenarios under the new tax regime, highlighting its impact across income levels.

Scenario 1: Income Below ₹12 lakhs (Tax-Free)

Scenario 2: Income landing between ₹12 lakhs - ₹15 lakhs

Scenario 3: Income Above ₹20 lakhs

These scenarios help taxpayers calculate income tax accurately and optimize tax planning under the new regime.

Salary-Based Tax Breakdown: How Much Tax Will You Pay?

The income tax slabs in 2025 define tax rates based on income brackets, making it easier for individuals to calculate income tax. The revised slabs allow tax-free income up to ₹12 lakhs due to an enhanced rebate, while higher incomes face progressive tax rates. Below is a breakdown of tax liabilities at different salary levels under the new tax regime.

Tax Breakdown for Different Income Levels

Understanding these brackets helps in better tax planning and financial management.

Who Is Eligible for the New Income Tax Slabs in 2025?

The income tax slabs in 2025 under the new tax regime apply to resident individuals, Hindu Undivided Families (HUFs), and senior citizens, including salaried employees and self-employed professionals. This regime is the default tax structure, requiring taxpayers to opt out if they prefer the old regime.

Businesses and corporations are not eligible for these slabs, as they have separate tax structures. Income tax slabs for senior citizens remain distinct, offering higher exemptions. Taxpayers earning up to ₹12 lakhs can benefit from a full rebate, making strategic tax planning essential to calculate income tax efficiently.

Income Tax Slabs and Rates for FY 2024-25 (AY 2025-26) Post-Budget 2024

The income tax slabs in 2025 for FY 2024-25 (AY 2025-26) remain aligned with the previous tax structure, ensuring taxpayers can opt for either the new tax regime or the old tax regime. The new regime continues as the default, offering lower rates but fewer deductions, whereas the old regime retains exemptions such as Section 80C and HRA.

Income Tax Slabs for FY 2024-25 (New Regime)

Key Changes and Considerations

Taxpayers should calculate income tax based on their deductions and choose the most beneficial regime accordingly.

Budget 2025-26: Key Announcements and Major Tax Reforms

The Union Budget 2025 introduced revised income tax slabs in 2025, benefiting a wide range of taxpayers. The key focus remains on simplification, tax relief, and increased disposable income. Below is a detailed breakdown of major tax-related announcements and reforms.

Key Announcements and Tax Reforms in Budget 2025-26

Key Takeaways from Budget 2025-26

These tax reforms make the new tax regime more attractive, encouraging taxpayers to transition from the old structure.

Income Tax Slabs for FY 2024-25 Under the Old Tax Regime

The old tax regime for FY 2024-25 (AY 2025-26) continues with its age-based exemption limits and deduction benefits under Sections 80C, 80D, and HRA. Unlike the new tax regime, this structure allows taxpayers to claim exemptions and deductions to lower their tax liability.

Key Income Tax Slabs for FY 2024-25 (Old Regime)

This regime is ideal for taxpayers who claim deductions on investments, home loans, and medical insurance.

Old Tax Regime Income Tax Slabs for Individuals, HUF, AOP, and BOI

The old tax regime for FY 2024-25 (AY 2025-26) remains an option for taxpayers who want to claim deductions and exemptions. This regime is applicable to Individuals, Hindu Undivided Families (HUFs), Associations of Persons (AOPs), and Bodies of Individuals (BOIs). Below are the applicable tax slabs:

Income Tax Slabs for Individuals, HUF, AOP, and BOI (FY 2024-25)

Key Points

Taxpayers must compare regimes before choosing the best option to calculate income tax efficiently.

Comparing Old vs New Tax Regimes: FY 2024-25 vs FY 2023-24

The income tax slabs comparison between the old and new tax regimes for FY 2024-25 (AY 2025-26) and FY 2023-24 (AY 2024-25) helps taxpayers decide the most beneficial option. While the old regime allows deductions and exemptions, the new regime offers lower tax rates but fewer deductions.

Key Differences Between Old and New Tax Regimes

Comparison of Income Tax Slabs (FY 2024-25 vs FY 2023-24)

Key Takeaways

Choosing between the two regimes depends on individual income, deductions, and financial planning goals.

Income Tax Slabs and Rates for Individuals Below 60 Under Old Tax Regime (FY 2024-25, AY 2025-26)

The old tax regime continues to be an option for taxpayers who want to claim deductions and exemptions. For individuals below 60 years of age, the basic exemption limit remains ₹2.5 lakhs, with tax rates progressively increasing with income. The old regime allows deductions such as Section 80C (₹1.5 lakhs), 80D (₹25,000 for health insurance), and home loan interest deduction (₹2 lakhs under Section 24b), making it beneficial for those with higher tax-saving investments.

Income Tax Slabs for Individuals Below 60 (Old Tax Regime - FY 2024-25)

Key Features of the Old Tax Regime for Individuals Below 60

Taxpayers must compare both regimes to determine which one helps them calculate income tax more efficiently based on their eligible deductions.

Income Tax Slabs for Senior Citizens (60-80 Years) Under Old Regime (FY 2024-25, AY 2025-26)

Senior citizens aged 60 to 80 years enjoy a higher exemption limit under the old tax regime. For FY 2024-25 (AY 2025-26), the basic exemption limit is ₹3 lakhs, compared to ₹2.5 lakhs for individuals below 60. Taxpayers in this category can also claim deductions under Section 80C (₹1.5 lakhs), Section 80D (₹50,000 for health insurance), and Section 24(b) (₹2 lakhs on home loan interest), making it a favorable option for those with eligible deductions.

Income Tax Slabs for Senior Citizens (FY 2024-25, Old Regime)

Key Features of the Old Tax Regime for Senior Citizens

For senior citizens, choosing between the old and new tax regimes depends on their investment structure and tax-saving potential.

Income Tax Slabs for Super Senior Citizens (80+ Years) Under Old Regime (FY 2024-25, AY 2025-26)

Super senior citizens (aged 80 years and above) benefit from the highest exemption limit under the old tax regime. For FY 2024-25 (AY 2025-26), their basic exemption limit is ₹5 lakhs, significantly higher than that for younger taxpayers. This ensures that individuals in this category with income up to ₹5 lakhs pay no tax, even before applying deductions. The old regime allows deductions under Section 80C, 80D (₹50,000 for health insurance), and home loan interest (₹2 lakhs under Section 24b), making it favorable for those with eligible investments.

Income Tax Slabs for Super Senior Citizens (FY 2024-25, Old Regime)

Key Benefits for Super Senior Citizens

Super senior citizens should compare the old and new regimes to determine the most tax-efficient option.

Revised Tax Slabs for Individuals Under 60 Years (AY 2025-26)

For Assessment Year (AY) 2025-26, the new tax regime continues to be the default option, while individuals can opt for the old regime if they wish to claim deductions. Under the new tax regime, the basic exemption limit has been increased to ₹4 lakhs, compared to ₹2.5 lakhs under the old regime. Additionally, the rebate available under Section 87A makes sure that individuals with a taxable income up to ₹12 lakhs pay no tax after applying rebates and standard deductions.

Revised Income Tax Slabs for Individuals Below 60 (New Regime - AY 2025-26)

Key Features of the Revised Tax Slabs

Taxpayers must evaluate both regimes to determine the best tax-saving option.

Comparing Old vs New Tax Slabs for Individuals Under 60 Years

For individuals below 60 years, the old and new tax regimes differ primarily in exemption limits, slab rates, and deductions. The new tax regime offers lower tax rates but no deductions, whereas the old tax regime allows deductions under Section 80C, 80D, and HRA, making it suitable for those with eligible investments.

The basic exemption limit in the old regime remains ₹2.5 lakhs, while in the new regime, it has increased to ₹4 lakhs. Moreover, the Section 87A rebate now ensures zero tax liability for incomes up to ₹12 lakhs under the new regime, making it more attractive for middle-income earners.

Comparison of Old vs New Income Tax Slabs (FY 2025-26, Individuals Under 60 Years)

Key Takeaways

Taxpayers should compare both regimes based on their income structure and deduction eligibility before filing returns.

Updated Income Tax Slabs for Senior Citizens (60-80 Years) in AY 2025-26

For senior citizens (aged 60-80 years), the new tax regime for AY 2025-26 offers revised tax slabs, an increased basic exemption limit, and a higher rebate available under Section 87A. Unlike the old tax regime, where the exemption limit is ₹3 lakhs, the new regime raises it to ₹4 lakhs, reducing the tax burden on senior taxpayers. Additionally, the tax deduction limit for senior citizens has been doubled from ₹50,000 to ₹1 lakhs, providing extra financial relief.

Updated Income Tax Slabs for Senior Citizens (AY 2025-26)

Key Changes for Senior Citizens

Taxpayers should assess deductions vs. lower rates to determine the best regime.

Old vs New Income Tax Slabs for Senior Citizens (60-80 Years)

Senior citizens (aged 60-80 years) can choose between the old and new tax regimes based on their financial needs. While the old regime provides deductions under Sections 80C, 80D, and others, the new regime offers lower tax rates but fewer deductions. The basic exemption limit has been raised from ₹3 lakhs up to ₹4 lakhs under the new tax regime, reducing the taxable income for senior taxpayers. Additionally, the tax deduction limit for senior citizens has been doubled from ₹50,000 to ₹1 lakhs, ensuring more savings.

Comparison of Old vs New Tax Slabs for Senior Citizens (AY 2025-26)

Key Differences Between Old and New Regimes

Senior citizens should evaluate whether the benefits of deductions outweigh lower tax rates before choosing a tax regime.

New Tax Slabs for Super Senior Citizens (80+ Years) in AY 2025-26

For super senior citizens (aged 80 years and above), the new tax regime for AY 2025-26 offers revised tax slabs and a higher exemption limit to reduce tax liability. Unlike the old tax regime, where the basic exemption limit is ₹5 lakhs, the new regime sets it at ₹4 lakhs but provides lower tax rates and an enhanced rebate available under Section 87A. This ensures that individuals with an annual income of up to ₹12 lakhs do not have to pay any tax.

Updated Income Tax Slabs for Super Senior Citizens (AY 2025-26)

Key Benefits for Super Senior Citizens

Super senior citizens should compare deductions vs. lower tax rates before selecting the most suitable regime.

Comparing Old vs New Tax Slabs for Super Senior Citizens (80+ Years)

Super senior citizens (aged 80 years and above) have the highest exemption limits under the old tax regime but can also opt for the new tax regime, which offers lower tax rates and a higher rebate available under Section 87A. The basic exemption limit under the old regime remains ₹5 lakhs, whereas it is ₹4 lakhs in the new regime. However, the new regime allows tax-free income up to ₹12 lakhs due to the enhanced rebate, making it a more beneficial option for many taxpayers.

Old vs New Tax Slabs for Super Senior Citizens (AY 2025-26)

Key Differences Between the Old and New Tax Regimes

Super senior citizens must evaluate their taxable income, deductions, and tax savings before choosing the most advantageous tax regime.

Revised New Tax Regime: Key Updates and Changes

The new tax regime for FY 2025-26 (AY 2026-27) has undergone significant revisions to provide greater tax relief and simplify compliance. The basic exemption limit has been raised to ₹4 lakhs, up from ₹3 lakhs in the previous year. Additionally, the tax rebate available under Section 87A has been increased to ₹60,000, ensuring that individuals with a net taxable income up to ₹12 lakhs pay zero tax.

The income tax slabs have been restructured to reduce the overall tax burden on middle-income earners, with lower tax rates across multiple slabs. Unlike the old regime, the new tax system does not allow deductions like 80C, 80D, and HRA, but the lower tax rates and higher rebate compensate for the loss of exemptions.

Updated New Tax Regime Slabs for FY 2025-26 (AY 2026-27)

Key Changes in the New Tax Regime

These revisions make the new tax regime more attractive for taxpayers, particularly those not relying on deductions.

Increased Standard Deduction for FY 2024-25 (AY 2025-26)

The standard deduction for salaried individuals and pensioners has been increased to ₹75,000 for FY 2024-25 (AY 2025-26), up from ₹50,000 in the previous year. This revision provides higher tax relief, especially for middle-income taxpayers, by reducing taxable income without requiring additional investments.

For individuals in the highest tax bracket (30 percent), this results in savings of ₹7,500 annually. Unlike exemptions under Section 80C and 80D, the standard deduction is available to all salaried taxpayers, making it a beneficial tax relief mechanism. This change aligns with the government’s goal of increasing disposable income and simplifying taxation.

Additional Insights on Income Tax Slabs for AY 2025-26 (FY 2024-25)

Key Insights on Income Tax Slabs

• Default tax regime: The new tax regime remains the default, requiring taxpayers to opt for the old regime if preferred.

  Income Tax Slabs for AY 2025-26 (FY 2024-25)

  Annual Income (₹)	Tax Rate (%)
  0 - 4,00,000	Nil
  4,00,001 - 8,00,000	5 percent
  8,00,001 - 12,00,000	10 percent
  12,00,001 - 16,00,000	15 percent
  16,00,001 - 20,00,000	20 percent
  20,00,001 - 24,00,000	25 percent
  Above 24,00,000	30 percent

  These updates aim to lower tax liabilities, streamline compliance, and encourage taxpayers to adopt the new tax regime.

  15 Important Tax Rule Changes in 2024 Impacting ITR Filing in 2025

  The Union Budget 2024 introduced several key tax rule changes that will significantly impact Income Tax Return (ITR) filing in 2025. These revisions focus on increased exemptions, deductions, and changes in compliance requirements to provide better financial relief for taxpayers.

  Key Tax Rule Changes for 2024-25

  1. Revised Income Tax Slabs – The new tax regime now applies lower rates with tax-free income up to ₹12 lakhs under Section 87A.

  2. Higher Standard Deduction – Salaried individuals and pensioners can now claim a ₹75,000 standard deduction, up from ₹50,000.

  3. Basic Exemption Limit Increase – Under the new tax regime, the exemption limit is now ₹4 lakhs instead of ₹3 lakhs.

  4. Revised TDS Rules – The Tax Deducted at Source (TDS) structure has been simplified, especially for property transactions and high-value withdrawals.

  5. NPS Contribution Deduction – Employer’s NPS contribution deduction increased to 14 percent from 10 percent.

  6. Tax-Free Pension for Senior Citizens – Additional ₹1 lakhs deduction for senior citizens under the new tax regime.

  7. Marginal Relief Expansion – Provides tax relief for individuals whose income exceeds ₹12 lakhs slightly.

  8. New Rules for Capital Gains Tax – Short-Term Capital Gains (STCG) tax rate increased from 15 percent to 20 percent.

  9. Simplified Capital Gains Holding Periods – Uniform tax treatment for listed and unlisted securities.

  10. Higher LTCG Exemption Limit – The Long-Term Capital Gains (LTCG) exemption limit raised to ₹1.25 lakhs from ₹1 lakhs.

  11. New Deduction for NPS Vatsalya – Parents contributing to NPS Vatsalya for children can claim ₹50,000 additional deduction.

  12. Stricter Tax Reopening Timeframe – The tax assessment reopening window reduced from 10 years to 5 years for incomes exceeding ₹50 lakhs.

  13. Higher TDS on Foreign Remittances – Increased TDS rates for international transactions exceeding certain limits.

  14. Luxury Goods TCS – Tax Collected at Source (TCS) now applies to high-value luxury goods over ₹10 lakhs.

  15. Property Sale TDS Revision – TDS is now deducted on the total sale value, making compliance stricter.

  These changes simplify tax compliance, reduce burdens for lower-income groups, and ensure a progressive taxation system in India.

  How Income Tax Slabs Have Shifted for FY 2024-25

  The income tax slabs for FY 2024-25 have undergone key revisions, particularly under the new tax regime. The basic exemption limit has increased to ₹4 lakhs, and income up to ₹12 lakhs is tax-free due to an enhanced Section 87A rebate. Additionally, revised slabs offer lower tax rates across income brackets.

  A Hindu Undivided Family (HUF) is a separate tax entity under the Income Tax Act, allowing members of a family to pool assets and reduce tax liability. The income tax slabs for HUFs in AY 2025-26 are aligned with those for individual taxpayers. HUFs can opt for either the old or new tax regime, with different tax rates and deduction benefits.

  Income Tax Slabs for HUFs Under the Old vs New Tax Regime (AY 2025-26)

  Annual Income (₹)	Old Tax Regime Rate (%)	New Tax Regime Rate (%)
  Up to ₹3,00,000	Nil	Nil
  ₹3,00,001 - ₹7,00,000	5 percent	5 percent
  ₹7,00,001 - ₹10,00,000	20 percent	10 percent
  ₹10,00,001 - ₹12,00,000	30 percent	15 percent
  ₹12,00,001 - ₹15,00,000	30 percent	20 percent
  Above ₹15,00,000	30 percent	30 percent

  Key Differences for HUF Taxation

  Old Regime Benefits: Allows deductions under Section 80C, 80D, and HRA exemptions.

  New Regime Benefits: Offers lower tax rates but disallows most deductions.

  Tax Rebate: Income up to ₹7 lakhs is tax-free under the new regime, while up to ₹5 lakhs is tax-free under the old regime.

  HUFs must assess their deduction eligibility and income level before selecting a tax regime.

  Hindu Undivided Family (HUF) Income Tax Slabs for AY 2025-26

  A Hindu Undivided Family (HUF) is a separate tax entity under the Income Tax Act, allowing members of a family to pool assets and reduce tax liability. The income tax slabs for HUFs in AY 2025-26 are aligned with those for individual taxpayers. HUFs can opt for either the old or new tax regime, with different tax rates and deduction benefits.

  Income Tax Slabs for HUFs Under the Old vs New Tax Regime (AY 2025-26)

  Annual Income (₹)	Old Tax Regime Rate (%)	New Tax Regime Rate (%)
  Up to ₹3,00,000	Nil	Nil
  ₹3,00,001 - ₹7,00,000	5 percent	5 percent
  ₹7,00,001 - ₹10,00,000	20 percent	10 percent
  ₹10,00,001 - ₹12,00,000	30 percent	15 percent
  ₹12,00,001 - ₹15,00,000	30 percent	20 percent
  Above ₹15,00,000	30 percent	30 percent

  Key Differences for HUF Taxation

  • Old Regime Benefits: Allows deductions under Section 80C, 80D, and HRA exemptions.

  • New Regime Benefits: Offers lower tax rates but disallows most deductions.

  • Tax Rebate: Income up to ₹7 lakhs is tax-free under the new regime, while up to ₹5 lakhs is tax-free under the old regime.

  HUFs must assess their deduction eligibility and income level before selecting a tax regime.

  Income Tax Slabs for Non-Resident Individuals (NRI) for AY 2025-26

  Non-Resident Indians (NRIs) are subject to Indian income tax on income earned or accrued within India. Unlike resident taxpayers, NRIs do not get the benefit of a higher exemption limit based on age. The basic exemption limit for NRIs remains ₹2.5 lakhs, regardless of age. NRIs can opt for either the old or new tax regime, but capital gains and special income sources are taxed at different rates.

  Income Tax Slabs for NRIs Under Old vs New Tax Regime (AY 2025-26)

  Annual Income (₹)	Old Tax Regime Rate (%)	New Tax Regime Rate (%)
  Up to ₹2,50,000	Nil	Nil
  ₹2,50,001 - ₹5,00,000	5 percent	5 percent
  ₹5,00,001 - ₹7,50,000	20 percent	10 percent
  ₹7,50,001 - ₹10,00,000	20 percent	10 percent
  ₹10,00,001 - ₹12,50,000	30 percent	15 percent
  ₹12,50,001 - ₹15,00,000	30 percent	20 percent
  Above ₹15,00,000	30 percent	30 percent

  Key Tax Rules for NRIs in AY 2025-26

  • No Higher Exemption Limit – Unlike resident senior citizens, NRIs have a fixed exemption limit of ₹2.5 lakhs.

  • Mandatory Tax Filing – NRIs must file Income Tax Returns (ITR) if their taxable income in India exceeds ₹2.5 lakhs.

  • No Section 87A Rebate – NRIs are not eligible for the ₹7 lakhs rebate available to residents under the new tax regime.

  • Special Tax on Capital Gains – Long-term capital gains (LTCG) and short-term capital gains (STCG) are taxed at different rates.

  • Surcharge and Cess – Additional surcharge and health & education cess (4 percent) apply on high-income NRIs.

  NRIs should evaluate applicable deductions, investment-linked benefits, and DTAA provisions to optimize their tax liability.

  Income Tax Slabs for AOP, BOI, Trusts, and Artificial Juridical Persons (AY 2025-26)

  The Income Tax Act, 1961, defines Association of Persons (AOP), Body of Individuals (BOI), Trusts, and Artificial Juridical Persons (AJP) as separate taxable entities. These entities are taxed at rates similar to individuals unless they qualify for specific exemptions. The tax structure is determined based on whether the income is distributed or accumulated within the entity.

  Key Taxation Rules for AOP, BOI, Trusts, and AJP in AY 2025-26

  • AOP & BOI (Non-Specific Shares): If the shares of members are not determinate, the entire income is taxed at the maximum marginal rate (MMR) of 30 percent plus applicable surcharge and cess.

  • AOP & BOI (Specific Shares): If the shares of members are clearly defined, tax is applied at individual slab rates up to ₹10 lakhs. Any amount exceeding ₹10 lakhs is taxed at 30 percent.

  • Trusts:

    • Public charitable and religious trusts registered under Section 12A enjoy tax exemptions if they comply with conditions under Section 11.

    • Private trusts are taxed as per the individual slab rates unless classified as a business trust or investment trust, which have separate tax provisions.

  • Artificial Juridical Persons (AJP): Entities like temples, deities, and public institutions that earn income are taxed at individual slab rates up to ₹10 lakhs and 30 percent above ₹10 lakhs.

  Income Tax Slabs for AOP, BOI, Trusts, and AJP (AY 2025-26)

  Annual Income (₹)	Tax Rate (%) (If Individual Slab Rates Apply)	Tax Rate (%) (If MMR Applies)
  Up to ₹2,50,000	Nil	30 percent
  ₹2,50,001 - ₹5,00,000	5 percent	30 percent
  ₹5,00,001 - ₹10,00,000	20 percent	30 percent
  Above ₹10,00,000	30 percent	30 percent

  Surcharge and Cess for AOP, BOI, Trusts, and AJP

  • Surcharge (on taxable income above ₹1 crore)

    • 10 percent for ₹1-10 crore

    • 15 percent for income above ₹10 crore

  • Health & Education Cess: 4 percent on total tax liability

Entities should carefully assess whether they qualify for exemptions under Sections 10, 11, or 12A to reduce their tax liability.

Domestic Company Tax Slabs for AY 2025-26

Domestic companies in India are taxed based on their turnover, income, and whether they opt for concessional tax regimes under specific sections of the Income Tax Act. The standard corporate tax rate is 30 percent, but companies with lower turnover or opting for specific provisions enjoy reduced rates.

Corporate Tax Slabs for Domestic Companies (AY 2025-26)

Surcharge:

• 7 percent on income above ₹1 crore

• 10 percent on income above ₹10 crore

• 12 percent for select cases under Section 115BA, 115BAA, and 115BAB

Additionally, a 4 percent health and education cess applies on the total tax payable.

Surcharge, Marginal Relief, and Health & Education Cess Explained

Taxpayers in India must consider surcharge, marginal relief, and health & education cess when evaluating their total tax liability. These additional charges impact the effective tax paid, especially for high-income earners.

Surcharge on Income Tax

A surcharge is levied on individuals and entities whose income exceeds specific thresholds. It is applied as a percentage of the calculated tax amount.

• Individuals & HUFs:

  • 10 percent on income landing between ₹50 lakhs and ₹1 crore

  • 15 percent on income landing between ₹1 crore and ₹2 crore

  • 25 percent on income landing between ₹2 crore and ₹5 crore

  • 30 percent on income exceeding ₹5 crore

• Companies:

  • 7 percent for income above ₹1 crore

  • 10 percent for income above ₹10 crore

Marginal Relief Calculation

Marginal relief prevents excessive tax burdens when income slightly exceeds a surcharge threshold. It ensures that the additional tax does not surpass the income exceeding the threshold.

For example, if an individual earns ₹50.1 lakhs, the surcharge should not be more than the extra ₹10,000 earned above ₹50 lakhs.

Health & Education Cess

A 4 percent cess is applied on the total income tax plus surcharge. This applies to all taxpayers and helps fund public health and education initiatives.

Understanding surcharge, marginal relief, and cess is crucial when using an income tax slabs comparison or attempting to calculate income tax under different tax structures. Proper assessment helps in selecting the right tax regime, especially for those evaluating income tax slabs for senior citizens or other tax categories.

Income Tax Rates for Partnership Firms and LLPs Under Both Regimes

Partnership firms and Limited Liability Partnerships (LLPs) in India are taxed at a flat rate, unlike individual taxpayers who fall under income tax slabs in 2025. These entities are subject to a uniform tax structure under both the old and new tax regimes, with additional levies such as surcharge and cess.

Key Tax Provisions for Partnership Firms & LLPs

• Flat tax rate: 30 percent on total income.

• Surcharge: 12 percent if income exceeds ₹1 crore.

• Health & Education Cess: 4 percent on total tax liability.

• Alternate Minimum Tax (AMT): 18.5 percent (plus applicable surcharge and cess).

• No differentiation between old and new regimes, as LLPs and firms do not qualify for personal exemptions or deductions.

Income Tax Rates for Partnership Firms & LLPs

Alternate Minimum Tax (AMT) for LLPs

LLPs must pay a minimum tax if their normal tax liability is lower than the AMT.

LLPs and partnership firms should consider these tax provisions carefully when they calculate income tax, as they do not fall under income tax slabs comparison applicable to individuals.

Eligibility Criteria for Opting into the New Tax Regime

The new tax regime introduced in Income Tax Slabs in 2025 is available to specific taxpayers, but opting in comes with certain conditions. Individuals and Hindu Undivided Families (HUFs) can choose between the old and new tax regimes, depending on their financial situation.

Key Eligibility Criteria:

• Available for individuals, HUFs, AOPs, BOIs, and AJPs.

• Business income taxpayers can opt in but can switch back only once.

• Salaried individuals can switch between regimes yearly.

• No access to major deductions like 80C, 80D, and HRA.

• Taxpayers must declare their choice while filing ITR.

Deductions and Exemptions Not Available in the New Tax Regime (FY 2024-25)

The new tax regime under Income Tax Slabs in 2025 offers lower tax rates but removes several deductions and exemptions that were available in the old regime. Taxpayers opting for this regime cannot claim many common deductions, which may impact their overall tax liability.

Key Deductions and Exemptions Not Available:

• Section 80C: No deductions for PPF, ELSS, life insurance premiums, and NSC.

• House Rent Allowance (HRA): Exemption for rented accommodation is removed.

• Leave Travel Allowance (LTA): No deductions for travel expenses.

• Standard Deduction (Salary & Pension): Limited to ₹75,000 under the new regime.

• Section 80D: No deductions for health insurance premiums.

• Interest on Housing Loan (Section 24b): No claim for self-occupied properties.

• Section 80E: No tax benefits on education loan interest.

• Section 80G: No deductions for charitable donations.

Before opting for the new tax regime, taxpayers must perform an income tax slabs comparison to determine the most beneficial option for their financial planning.

What Deductions and Exemptions Are Allowed Under the New Tax Regime (FY 2024-25)?

The new tax regime under income tax slabs in 2025 has limited deductions compared to the old tax regime. While most exemptions are removed, a few key deductions remain available, allowing taxpayers to reduce their taxable income.

Key Deductions and Exemptions Allowed:

• Standard Deduction (Salary & Pension): ₹75,000 for salaried individuals and pensioners.

• Employer’s NPS Contribution (Section 80CCD(2)): Deduction up to 10 percent of salary (14 percent for central government employees).

• Transport Allowance for Disabled Employees: Available for individuals with disabilities.

• Conveyance Allowance: Allowed for expenses related to official duties.

• Daily Allowance: Exempt for employees covering day-to-day work expenses while traveling for business.

• Rental Income Deduction: 30 percent standard deduction applicable for rented-out properties under Income from House Property.

• Home Loan Interest (For Let-Out Property Only): Deduction allowed against rental income.

Before opting for the new tax regime, it’s essential to calculate income tax and compare benefits with the old regime. Income tax slabs comparison helps determine the most tax-efficient approach based on individual earnings and deductions available.

Old vs New Tax Regime Deductions Under Section 115BAC for FY 2024-25

Under the income tax slabs in 2025, taxpayers must decide between the old and new tax regimes. The new tax regime (Section 115BAC) offers lower tax rates but eliminates most deductions and exemptions. Meanwhile, the old tax regime allows multiple deductions, reducing taxable income.

Comparison of Deductions in Old vs New Tax Regime

Before switching, individuals should calculate income tax and perform an income tax slabs comparison to determine the most beneficial option.

Pros and Cons of the New Tax Regime

Pros of the New Tax Regime

• Lower Tax Rates – Offers reduced tax rates compared to the old regime.

• Simplified Tax Filing – No need to claim multiple deductions, making return filing easier.

• Higher Standard Deduction – Increased to ₹75,000 for salaried individuals.

• No Requirement to Invest – Unlike the old regime, savings in tax-saving instruments aren’t mandatory.

Cons of the New Tax Regime

• No 80C Deductions – Investments in PPF, ELSS, and NSC aren’t deductible.

• No Housing Loan Interest Deduction – Homebuyers lose the ₹2 lakhs benefit under Section 24(b).

• No Medical Insurance Deduction – Section 80D deductions for health insurance are unavailable.

• Not Always the Best Choice – Taxpayers must calculate income tax and conduct an income tax slabs comparison to determine which regime suits them best.

How to Calculate Income Tax for FY 2024-25 (AY 2025-26)?

calculating  income tax for FY 2024-25 (AY 2025-26) depends on whether you opt for the old tax regime or the new tax regime under income tax slabs in 2025. Each regime has different slab rates and deductions, making it essential to compare both before finalizing tax liability.

Steps to Calculate Income Tax

1. Determine Total Income – Sum all sources of income, including salary, business, capital gains, rent, and other earnings.

2. Choose the Tax Regime – Decide between the old and new regimes based on eligibility and benefits.

3. Apply Income Tax Slabs – Use the relevant income tax slabs comparison for the chosen regime.

4. Subtract Deductions (If Applicable) – under the old regime, claim deductions such as 80c, 80d, and home loan interest.

5. Calculate Tax Liability – Apply the tax rates to the taxable income.

6. Include Surcharge & Cess – Add surcharge (if applicable) and 4 percent health & education cess.

7. Check for Marginal Relief – If close to the surcharge limit, calculate income tax using marginal relief rules.

8. Adjust for TDS & Advance Tax – Deduct tax already paid to find the final tax payable or refund amount.

Using an online income tax calculator can help simplify this process.

Income Tax Liability Calculation Under the Old Tax Regime

The old tax regime allows taxpayers to claim multiple deductions and exemptions, reducing their taxable income. Tax liability is calculated based on income tax slabs applicable for FY 2024-25 (AY 2025-26) while utilizing available deductions under Sections 80C, 80D, HRA, and more.

Steps to Calculate Income Tax Under the Old Regime

1. Compute Gross Total Income – Sum income from salary, house property, business, capital gains, and other sources.

2. Apply Exemptions – Deduct HRA, LTA, and allowances (where applicable).

3. Deduct 80C, 80D, and Other Eligible Deductions – Reduce taxable income using deductions like:

   • 80C: Up to ₹1.5 lakhs (EPF, PPF, life insurance, ELSS, etc.)

   • 80D: Health insurance premium deduction

   • 80E, 24(b), 80G, and others for education loans, home loans, and donations

4. Apply Income Tax Slabs – Use income tax slabs comparison for individuals, senior citizens, and others.

5. Calculate Tax Payable – Apply slab rates to the taxable income after deductions.

6. Add Surcharge and Cess – Include a 10-37 percent surcharge (if applicable) + 4 percent health & education cess.

7. Deduct TDS and Advance Tax Paid – Adjust tax liability based on already deducted tax amounts.

By following these steps, taxpayers can accurately calculate income tax and determine their final tax liability under the old regime.

Understanding Surcharge on Income Tax

A surcharge on income tax is an additional tax levied on high-income individuals, Hindu Undivided Families (HUFs), firms, and companies whose total taxable income exceeds a specified threshold. It is calculated as a percentage of the total income tax payable before adding health and education cess.

Key Points About Surcharge on Income Tax

1. Applicable to High Earners – Surcharge applies to individuals, HUFs, and entities with taxable income above ₹50 lakhs.

2. Surcharge Rates Applicable for Individuals (FY 2024-25):

   • 10 percent on income landing between ₹50 lakhs - ₹1 crore

   • 15 percent on income landing between ₹1 crore - ₹2 crore

   • 25 percent on income landing between ₹2 crore - ₹5 crore

   • 37 percent on income exceeding ₹5 crore

   • 7 percent for domestic companies with income landing between ₹1 crore - ₹10 crore

   • 12 percent for income above ₹10 crore

   • 12 percent for partnership firms and LLPs earning above ₹1 crore

3. Surcharge for Companies & Firms:

4. Marginal Relief Available – If surcharge increases tax liability disproportionately, marginal relief is provided.

5. Additional Health & Education Cess – A 4 percent cess is levied on the total tax payable, including the surcharge.

Taxpayers can evaluate their total tax outgo using income tax slabs comparison and determine if they fall under the surcharge bracket.

Tips for Selecting Between the Old and New Tax Regimes

Choosing between the old tax regime and the new tax regime depends on factors like income level, available deductions, and overall tax liability. The old regime offers multiple exemptions and deductions, while the new regime provides lower tax rates but fewer benefits.

Key Factors to Consider

1. Income Level – Assess whether your income falls under higher income tax slabs in 2025, as lower tax rates may be beneficial under the new regime.

2. Deductions & Exemptions – If you claim deductions like 80C, 80D, HRA, LTA, and home loan interest, the old regime may be more beneficial.

3. Simplicity vs. Savings – The new tax regime is simpler, with fewer compliance requirements, whereas the old tax regime is beneficial for those maximizing deductions.

4. Standard Deduction – The new regime allows a ₹50,000 standard deduction for salaried individuals and pensioners, offering some relief.

5. Rebates & Marginal Relief – Check whether you qualify for tax rebates under Section 87A or marginal relief if your income exceeds ₹50 lakhs.

6. Long-Term Planning – If you plan to invest in tax-saving instruments like PPF, EPF, or NPS, the old tax regime is preferable.

7. Use an income tax calculation tool to estimate tax liability under both regimes before making a decision.

Types of Taxable Income Categories in India

In India, taxable income is classified into different categories based on the source of earnings. The income tax slabs applicable to individuals depend on these income types. Understanding these categories is essential for accurate tax computation.

Key Types of Taxable Income

1. Income from Salary – Earnings received as salary, including basic pay, bonuses, allowances, and perquisites.

2. Income from House Property – Rental income from owned properties after deducting eligible expenses like municipal taxes and standard deductions.

3. Income from Business or Profession – Profits earned by self-employed individuals, freelancers, and businesses, including professionals like doctors and lawyers.

4. Capital Gains – Profits from the sale of assets like stocks, real estate, and gold, classified as short-term or long-term capital gains.

5. Income from Other Sources – Includes interest income from savings accounts, fixed deposits, lottery winnings, and gifts above exempted limits.

6. Each income category is taxed as per income tax slabs in 2025, and individuals must compute their liability accordingly. Using a calculate income tax tool helps determine tax obligations under different scenarios.

Tax Advantages of ELSS Funds as per Budget 2024

Equity Linked Savings Scheme (ELSS) funds offer a tax-efficient investment option under Section 80C of the Income Tax Act. As per Budget 2024, ELSS remains one of the few mutual fund investments eligible for a tax deduction of up to ₹1.5 lakhs per annum.

Key Tax Benefits of ELSS Funds

1. Shortest Lock-in Period – ELSS has a three-year lock-in period, lower than other Section 80C instruments.

2. Exemption on Gains – Long-term capital gains (LTCG) up to ₹1 lakhs per financial year are tax-free.

3. Higher Returns Potential – ELSS invests in equities, offering higher growth potential compared to traditional tax-saving options.

4. Dual Benefit – Investors enjoy tax savings + wealth creation over the long term.

Choosing ELSS can optimize tax savings while aligning with income tax slabs comparison strategies for better financial planning.

How to Determine Your Applicable Income Tax Slab?

Understanding your applicable income tax slab is crucial for accurate tax planning. The slab rates depend on income level, age category, and tax regime (old vs new). To determine the correct slab, consider the following factors:

Key Factors for Identifying Your Income Tax Slab

1. Total Taxable Income – Sum up salary, business profits, rental income, capital gains, and other sources.

2. Selected Tax Regime – The new tax regime has lower rates but fewer deductions, while the old regime allows exemptions.

3. Age Category – Different slabs exist for individuals below 60, senior citizens (60-80 years), and super senior citizens (80+ years).

4. Residential Status – Non-resident individuals (NRIs) follow different tax slab structures.

5. Tax Deductions Applied – Under the old regime, for instance, deductions such as the 80C, 80D, and HRA impact your taxable income.

To calculate income tax effectively, assess all components and choose the most beneficial tax regime based on savings and liabilities.

Conclusion

There you go, guys—not exactly a very complicated concept, was it?. Be it the new regime tax slabs or continuing with the old one, how the slab systems in tax work will help you plan better and save more. Remember, taxes need not give you a headache. If you know a little, it's almost as if you can navigate the tax world like a pro and maybe even have some fun with it. Okay, maybe not fun, but at least you won't dread it as much.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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