Revised Income Tax Slab Rates for FY 2025-26
In Budget 2025, Finance Minister Nirmala Sitharaman announced significant changes to the income tax structure. One of the most notable highlights was the increase in the tax exemption limit, which is expected to boost disposable income and simplify tax compliance for individuals.
New tax slabs under new regime announced by Finance Minister Nirmala Sitharaman says income up to ₹12 lakh will be completely tax-free if an individual doesn’t have income from special interest assets. She also announced tax relief for senior citizens and rationalisation of TDS.
Here’s a detailed breakdown of the newly announced income tax slabs:
Revised Income Tax Slab Rates for FY 2025-26
- Up to Rs 4 lakh – NIL
- Rs 4 lakh – Rs 8 lakh – 5%
- Rs 8,00,001 – Rs 12 lakh – 10%
- Rs 12,00,001 – Rs 16 lakh – 15%
- Rs,16,00,001 – Rs.20 lakh -20%
- Rs.20,00,001 to Rs,24 lakh -25%
- Above Rs 24 lakh – 30%
Key Announcements and Updates:
- Income Tax Exemption: Individuals earning up to Rs 12 lakh per annum will now be completely exempt from paying income tax, provided they do not have income from special interest assets. This move aims to provide significant relief to the middle-income group. For salaried indiviuals, Sitharaman announced that no income tax would be payable for income up to ₹12.75 lakh (with standard deduction) under the new tax regime.
- Relief for Senior Citizens: The TDS (Tax Deducted at Source) threshold on interest income from deposits for senior citizens has been increased from Rs 50,000 to Rs 1 lakh. This change is expected to benefit retirees who depend on interest income for their financial needs.
- Rationalisation of TDS: Measures have been introduced to streamline and simplify the TDS framework, reducing compliance burdens and making tax processes more efficient.
Implications for Taxpayers: The increase in the exemption limit and rationalised tax rates under the new regime are likely to encourage more taxpayers to adopt the simplified framework. Additionally, the tax relief for senior citizens will ease financial pressures on retirees, promoting a more inclusive approach toward taxation.
Stay tuned for further updates on the impact of Budget 2025 on taxpayers and the broader economy.
Old Tax Regime Income Tax Slab Rates for FY 2024-25 and FY 2025-26 remain same.
There were no changes made to the tax slabs under the old regime. The tax slabs under the old regime are as follows:
| Income Slabs | Income tax rate |
| Up to Rs. 2.5 lakh | Nil |
| Rs. 2.5 lakh – Rs. 5 lakh | 5% |
| Rs. 5 lakh – Rs. 10 lakh | 20% |
| Above Rs. 10 lakh | 30% |
• Resident Individuals Aged 60-80 Years
| Income Slabs | Income tax rate |
| Up to Rs. 3 lakh | Nil |
| Rs. 3 lakh – Rs. 5 lakh | 5% |
| Rs. 5 lakh – Rs. 10 lakh | 20% |
| Above Rs. 10 lakh | 30% |
- Resident individuals Aged more than 80 Years
| Income Slabs | Income tax rate |
| Up to Rs. 5 lakh | Nil |
| Rs. 5 lakh – Rs. 10 lakh | 20% |
| Above Rs. 10 lakh | 30% |
Note:
• Surcharge and cess will be applicable.
• Individual residents 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.
Disclaimer
The content provided above is intended solely for informational and explanatory purposes. It should not be considered financial advice or solicitation material. The information is based on publicly available sources and subject to change. Readers are advised to consult with a qualified financial advisor or tax professional before making any financial or tax-related decisions.
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