Income Tax Slab for FY 2024-25 & FY 2025-26 (New & Old Tax Regime Rates)

The income tax is a direct tax which follows a progressive slab rate, where the rate of tax

increases as the taxpayer's income rises. The Income-tax Act, 1961 provides for two tax regimes:

the old regime, which allows various deductions and exemptions, and the new regime, which

offers lower tax rates without exemptions.

Budget 2025 Updates

The new Income Tax Bill has been tabled by the Honorable Finance Minister in the Lok Sabha.

It aims to simplification and better presentation of the provisions.

As per the budget 2025, the income up to Rs. 12,00,000 will have zero tax liability for the FY

2025-26 (AY 2026-27) under the new tax regime. Here's how:

The revised tax slabs under the new regime for FY 2025-26 (AY 2026-27) are as follows:

Annual Income Tax Slabs income Tax Rates

Upto Rs. 4,00,000 NIL

Rs. 4,00,001 - Rs. 8,00,000 5%

 Rs. 8,00,001 - Rs. 12,00,000 10%

Rs. 12,00,001 - Rs. 16,00,000 15%

Rs. 16,00,001 - Rs. 20,00,000 20%

Rs. 20,00,001 - Rs. 24,00,000 25%

Above Rs. 24,00,000 30%

With the revised tax structure, individuals earning up to Rs. 12,00,000 will have no tax liability

due to the increased rebate of Rs. 60,000. For salaried individuals, the tax liability will be zero

for incomes up to Rs. 12,75,000, due to the Rs. 75,000 standard deduction.

Note:

 The marginal relief on rebate is still applicable.

 The rebate is not available for income that is taxed at special rates (e.g., capital gains

under section 112A).

What is an Income Tax Slab?

In India, the Income Tax applies to individuals based on a slab system, where different tax rates

are assigned to different income ranges. As the person's income increases, the tax rates also

increase. This type of taxation allows for a fair and progressive tax system in the country. The

income tax slabs are revised periodically, typically during each budget. These slab rates vary for

different groups of taxpayers.

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

The Budget 2024 introduced significant changes to the tax slabs under the New Tax Regime,

which will be applicable for FY 2024-25 (AY 2025-26). Taxpayers can now benefit from revised

tax slabs, along with an increased standard deduction and an enhanced family pension deduction.

Here’s a breakdown of the revised income tax slabs for FY 2024-25 under the new regime:

Annual Income Tax Slabs Income Tax Rates

Up to Rs 3 lakh NIL

Rs 3 lakh - Rs 7 lakh 5%

Rs 7 lakh - Rs 10 lakh 10%

 Rs10 lakh - Rs 12 lakh 15%

Rs 12 lakh - Rs 15 lakh 20%

Above Rs 15 lakh 30%

Note:

 Rebate: Tax rebate up to Rs.25,000 is applicable if the total income does not exceed Rs

7,00,000 (not applicable for NRIs). Therefore, no tax for an income up-to Rs.7,00,000.

 Standard Deduction: The standard deduction for salaried employees is Rs. 75,000 under

the new regime.

 Deduction under Family Pension: The deduction on family pension received has been

increased from Rs. 15,000 to Rs. 25,000.

 NPS Contribution: The deduction limit on employer's contribution to NPS is 14% for FY

2024-25.

As a result of the above changes, a salaried employee in the new tax regime can save up to Rs.

17,500 in taxes.
The new regime is the default tax regime. If individuals want to choose the old regime then

they have to file Form 10-IEA. The highest surcharge rate is 25% under the new regime as

opposed to 37% in the old regime.

Revised Income Tax Slabs Under the New Regime: Key Changes and Their Impact

The slab rates is modified by the government for FY 2024-25. This has resulted in certain

relaxations. The gist of changes made in the slab rates is given below:

Income Tax Slabs Tax Rates Income Tax Slabs Tax Rates
Changes
for FY 2023-24 (FY 2023-24) for FY 2024-25 (FY 2024-25)

Up to Rs 3,00,000 NIL Up to Rs 3,00,000 NIL No Change

Rs 3,00,000 - Rs Rs 3,00,000 - Rs Slab expanded by

6,00,000 5% 7,00,000 5% Rs 1,00,000

Rs 6,00,000 - Rs Rs 7,00,000 - Rs Slab expanded by

9,00,000 10% 10,00,000 10% Rs 1,00,000

Rs 9,00,000 - Rs Rs 10,00,000 - Rs No Change in Rate;

12,00,000 15% 12,00,000 15% New Threshold

Rs 12,00,000 - Rs Rs 12,00,000 - Rs

15,00,000 20% 15,00,000 20% No Change

Above Rs 15,00,000 30% Above Rs 15,00,000 30% No Change

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

There were no changes made to the tax slabs under the old regime in the budget 2024. The tax

slabs under the old regime are as follows:

Income tax slabs for individuals aged below 60 years & HUF

Income Slabs Age < 60 Age of 60 Years to 80 years Age above 80 Years

years & NRIs (Resident Individuals) (Resident Individuals)

Up to ₹2,50,000 NIL NIL NIL

₹2,50,001 - 5% NIL NIL

₹3,00,000

₹3,00,001 - 5% 5% NIL

₹5,00,000
 ₹5,00,001 - 20% 20% 20%

₹10,00,000

₹10,00,001 and 30% 30% 30%

above

NOTE:

 Surcharge and cess will be applicable.

Old vs New Tax Regime Slabs Comparison for FY 2024-25 (AY 2025-26)

Tax Slabs Old Tax Regime Rates New Tax Regime Rates

Up to Rs 2,50,000 NIL NIL

Rs 2,50,001 - Rs 3,00,000 5% NIL

Rs 3,00,001 - Rs 5,00,000 5% 5%

Rs 5,00,001 - Rs 6,00,000 20% 5%

Rs 6,00,001 - Rs 7,00,000 20% 5%

Rs 7,00,001 - Rs 9,00,000 20% 10%

Rs 9,00,001 - Rs 10,00,000 20% 10%

Rs 10,00,001 - Rs 12,00,000 30% 15%

Rs 12,00,001 - Rs 15,00,000 30% 20%

Rs 15,00,000 and above 30% 30%

Income Tax Slab Rate Calculation for AY 2025-26 (FY 2024-25)

New Regime

Income Slabs Income Tax Rates

Up to Rs 3,00,000 Nil
Rs 3,00,000 to Rs 7,00,000 5% on income which exceeds Rs 3,00,000

Rs 7,00,000 to Rs 10,00,000 Rs. 20,000 + 10% on income more than Rs 7,00,000

Rs 10,00,000 to Rs 12,00,000 Rs. 50,000 + 15% on income more than Rs 10,00,000

Rs 12,00,000 to Rs 1500,000 Rs. 80,000 + 20% on income more than Rs 12,00,000

Above Rs 15,00,000 Rs. 1,40,000 + 30% on income more than Rs 15,00,000

Old Regime

For normal tax payers For residents aged 60-80 years For residents aged greater than 80 years

Income Income Tax Income Tax

Income Slabs Income Slabs Income Tax Rates
Slabs Rates Rates
 Up to Upto Upto
Nil NIL NIL
₹2,50,000 Rs.3,00,000 Rs.5,00,000

5% on income 5% on income 20% on income

₹2,50,001 - ₹3,00,001 - ₹5,00,001 -
which exceeds Rs which exceeds Rs which exceeds Rs
₹5,00,000 ₹5,00,000 ₹10,00,000
2,50,000 3,00,000 5,00,000

Rs. 12,500 + 20% Rs. 10,000 + 20% Rs. 1,00,000 + 30%

₹5,00,001 - ₹5,00,001 - ₹10,00,001 and
on income more on income more on income more than
₹10,00,000 ₹10,00,000 above
than Rs 5,00,000 than Rs 5,00,000 Rs 10,00,000

Rs. 1,12,500 + Rs. 1,10,000 +

₹10,00,001 30% on income ₹10,00,001 30% on income NOT

NOT APPLICABLE
and above more than Rs and above more than Rs APPLICABLE

10,00,000 10,00,000

Individuals with net taxable income less than or equal to Rs 5 lakh will be eligible for tax rebate

u/s 87A under the old tax regime, i.e. tax liability will be NIL.

Important Points to note if you select the new tax regime:

 Please note that the tax rates in the New tax regime are the same for all categories of

Individuals, i.e. Individuals, Senior citizens, and Super senior citizens.

 Individuals with net taxable income less than or equal to Rs 7 lakh will be eligible for tax

rebate u/s 87A, i.e. tax liability will be NIL under the new regime.

The tax slabs under the new tax regime across different years is shown below.

What is Surcharge?

In case the income exceeds a certain threshold, the additional taxes are to be paid over and above

existing tax rates. This is an additional tax on the High Income Earners.

Surcharge rates are as below:

10% of Income tax if total income > Rs.50 lakh and < Rs.1 crore,

15% of Income tax if total income > Rs.1 crore and < Rs.2 crore,

25% of Income tax if total income > Rs.2 crore and < Rs.5 crore,

37% of Income tax if total income > Rs.5 crore

*In Budget 2023, the highest surcharge rate of 37% has been reduced to 25% under the new tax

regime. (applicable from 1st April 2023)

 Surcharge rates of 25% or 37% will not apply to the income from dividends and capital

gains taxable under sections 111A (Short Term Capital Gain on Shares), 112A (Long

Term Capital Gain on Shares), and 115AD (Tax on the income of Foreign Institutional

Investors). Therefore, the highest surcharge rate on the tax payable for such incomes will

be 15%.
 The surcharge rate for an Association of Persons (AOP) consisting entirely of companies

will also be limited to 15%.

Additional Health and Education cess at the rate of 4% will be added to the income tax liability.

Exemptions and Deductions Not Claimable under the New Tax Regime

The following are some of the major deductions and exemptions you cannot claim under the new

tax regime:

Salary:

 Professional tax and entertainment allowance on salaries

 Leave Travel Allowance (LTA)

 House Rent Allowance (HRA)

 Allowances to MPs/MLAs

 Helper allowance

 Children education allowance

 Other special allowances [Section 10(14)]

House property:

 Interest on housing loan on the self-occupied property or vacant property (Section 24)
Other sources:

 Minor child income allowance

Business or profession:

 Additional depreciation under section 32(1)(iia)

 Deductions under section 32AD, 33AB, 33ABA

 Various deductions for donation for or expenditure on scientific research contained in

section 35(2AA) or 35(1)(ii) or (iia) or (iii)

 Deduction under section 35AD or section 35CCC

 Exemption under section 10AA for SEZ units

Chapter VI A deductions:

 The deduction under Section 80TTA/80TTB

 Section 80C, 80D, 80E and so on, except Section 80CCD(2) and Section 80JJAA

 Exemption or deduction for any other perquisites or allowances including food allowance

of Rs 50/meal subject to 2 meals a day

 Employee's (own) contribution to NPS

 Donation to Political party/trust, etc

What are the Exemptions and Deductions Available Under the New Regime?

Under the New tax regime, you can claim tax exemption for the following:

Salary:

 Transport allowances in case of a specially-abled person.

 Conveyance allowance received to meet the conveyance expenditure incurred as part of

the employment.

 Any compensation received to meet the cost of travel on tour or transfer.

 Daily allowance received to meet the ordinary regular charges or expenditure you incur on

account of absence from his regular place of duty.

 Perquisites for official purposes

 Exemption on voluntary retirement 10(10C), gratuity u/s 10(10) and Leave encashment u/s

10(10AA)

 Budget 2023 introduced a standard deduction of Rs 50,000 under New Tax Regime

applicable from FY 2023-24. This has been increased to Rs.75,000 in Budget 2024

applicable from FY 2024-25

House property:

 Interest on Home Loan on let-out property (Section 24)

Other sources:

 Gifts up to Rs 50,000

 Budget 2023 also introduced deduction under Section 57(iia) of family pension income. In

Budget 2024 Limit of maximum Deduction under Family Pension has been increased from

Rs. 15,000 to Rs. 25,000.

Chapter VI A deductions:

 Deduction for employer’s contribution to NPS account [Section 80CCD(2)]

 Deduction for additional employee cost (Section 80JJA)

 Budget 2023 further introduced deduction of amount paid or deposited in the Agniveer

Corpus Fund under Section 80CCH(2)

 The deduction on employers contribution to pension Scheme as per Section 80CCD (2)

has been increased from 10% of salary to the 14% of salary in Budget 2024.

Old Tax Regime Vs New Tax Regime - Analysis of Deductions

A comparative analysis of deductions available in new regime and old regime is given below:

DEDUCTION OLD REGIME NEW REGIME

House Rent Allowance Exemption up to a NOT AVAILABLE

 certain limit.

Calculate now

Relocation Allowance AVAILABLE NOT AVAILABLE

Actual travel ticket

expenses exempt for two

Leave Travel Allowance NOT AVAILABLE
trips in 4 years under

10(5). Read more

Transport allowances in case of a

AVAILABLE AVAILABLE
specially-abled person.

Conveyance allowance received to meet

the conveyance expenditure incurred as AVAILABLE AVAILABLE

part of the employment.

Any compensation received to meet the

AVAILABLE AVAILABLE
cost of travel on tour or transfer.

Daily allowance received to meet the AVAILABLE AVAILABLE

ordinary regular charges or expenditure

you incur on account of absence from his

regular place of duty.

Perquisites for official purposes AVAILABLE AVAILABLE

Exempt if:

– used predominantly
Mobile Reimbursement NOT AVAILABLE
for office purposes

– proofs/bills submitted

Rs 50 per meal (max 2

meals a day)Annual=
Food Expenses NOT AVAILABLE
Rs 26,400 (50*2*22

days*12 months)

Children’s Education and Hostel Rs 4800 per child (max

NOT AVAILABLE
allowance 2 children)

Exemption on voluntary retirement AVAILABLE AVAILABLE

10(10C), gratuity u/s 10(10) and Leave

encashment u/s 10(10AA)

Professional Tax Deduction under section

AVAILABLE NOT AVAILABLE
16

Standard deduction Rs.50,000 Rs.75,000

Interest on Home Loan on let-out property

AVAILABLE AVAILABLE
(Section 24)

Interest on Home Loan on Self-occupied Allowed to the extent of

NOT AVAILABLE
property (Section 24) Rs.2,00,000

Gifts up to Rs 50,000 AVAILABLE AVAILABLE

One third of pension One third of pension

amount subject to a amount subject to a

Family Pension u/s 57(iia) : maximum limit of Rs. maximum limit of Rs.

15,000 for Fy 2025- 25,000 for Fy 2025-

2026. 2026.

Deduction for additional employee cost AVAILABLE AVAILABLE

(Section 80JJA)

Available for the entire Available for the entire

Section 80CCH(2) deduction of amount
contribution made by contribution made by
paid or deposited in the Agniveer Corpus
applicants and the applicants and the
Fund
Central Government Central Government

Actual contribution
Actual contribution
Deduction for employer’s contribution to subject to a maximum
subject to a maximum
NPS account [Section 80CCD(2)] limit of 10% of the
limit of 14% of the salary
salary

Section 80C:Investments made in pension

funds, mutual funds, ULIPs, government

savings schemes, life insurance premiums, Rs.1,50,000 NOT AVAILABLE

home loan principal amount, education

fees, etc.

Section 80CCD: Additional exemption for

investment in the National Pension Rs. 50,000 NOT AVAILABLE

Scheme.

Section 80D: Tax deduction on health Self, your spouse, and NOT AVAILABLE
 your dependent children:

Rs 25,000 (Rs 50,000 if

insurance premium payments made aged 60 and above)

towards self or parents.

Parents: Rs 25,000 (Rs

50,000 if aged 60 and

above)

80TTA: Deduction on Savings account

Rs.10,000 NOT AVAILABLE
interest.

80TTB: Deduction on interest on Rs.50,000 (Only for

NOT AVAILABLE
Deposits. Senior Citizens)

80G: Donations to charitable

AVAILABLE NOT AVAILABLE
organisations

Maturity amount of a Life Insurance Maturity proceeds are Maturity proceeds are

tax-exempt if the sum tax-exempt if the sum

Policy
assured is ≤: assured is ≤:

– 20%: policies issued – 20%: policies issued

before 1 April 2012 before 1 April 2012

 – 10%: policies issued – 10%: policies issued

after 1 April 2012 after 1 April 2012

– 15%: policies issued – 15%: policies issued

after 1 April 2013 for a after 1 April 2013 for a

person with disability or person with disability or

disease. disease.

Here's a detailed list of exemptions and deductions available under the Old vs New Regime.

Old Tax Regime Vs New Tax Regime - Which is Better?

The new tax regime can largely benefit middle-class taxpayers who have a taxable income of up

to Rs 15 lakh. The old regime is a better option for high-income earners.

For super-senior citizens, since there is a relaxed Basic Exemption Limit of Rs.5,00,000, old

regime is beneficial for them, in case they are middle class earners.

The new income tax regime is beneficial for people who make low investments. As the new

regime offers six lower-income tax slabs, anyone paying taxes without claiming tax deductions

can benefit from paying a lower rate of tax under the new tax regime. For instance, the assessee

having total income before deduction up to Rs 12 lakh will have higher tax liability under the old

system if they have investments less than Rs. 3,12,500. Therefore, if you invest less in tax-

saving schemes, go for the new regime.

That being said, if you already have in place a financial plan for wealth creation by making

investments in tax-saving instruments; medical claims and life insurance; making payments of

children’s tuition fees; payment of EMIs on education loan; buying a house with a home loan;

and so on, the old regime helps you with higher tax deductions and lower tax outgo.

In light of the above and considering the new income tax regime, if taxpayers want to opt for the

concessional tax rates, they may evaluate both regimes. Hence, it is advisable to do a

comparative evaluation and analysis under both regimes and then choose the most

beneficial one, as it may vary from person to person. Read a detailed breakdown on this topic

here.

When Can I Opt for Old vs New Regime?

Nature of Income Time of Selection of option of old vs new regime

 Choice to be made by the employee at the beginning

of the financial year.

 Though the choice cannot be changed during the year,

Income from Salary or any other
It can be changed at the time of filing Income Tax
head of income attracting TDS
Return.

 In case you have Business or professional income, the

Income from Business &
choice between tax regimes can only be made once in
Profession
a lifetime.