Income tax slabs specify the rate of tax payable for different income levels. For the financial year 2025–26, a major relaxation in these slabs has been introduced, significantly lowering overall tax liability.
Under the new tax regime, the slab rates for FY 2025–26 are as follows:
- Up to ₹4 lakh – Nil
- ₹4 lakh to ₹8 lakh – 5%
- ₹8 lakh to ₹12 lakh – 10%
- ₹12 lakh to ₹16 lakh – 15%
- ₹16 lakh to ₹20 lakh – 20%
- ₹20 lakh to ₹24 lakh – 25%
- Above ₹24 lakh – 30%
New Regime Slab Table for FY 2025–26 (AY 2026–27)
| Income Range | Tax Rate |
|---|---|
| Up to ₹4 lakh | Nil |
| ₹4 lakh – ₹8 lakh | 5% |
| ₹8 lakh – ₹12 lakh | 10% |
| ₹12 lakh – ₹16 lakh | 15% |
| ₹16 lakh – ₹20 lakh | 20% |
| ₹20 lakh – ₹24 lakh | 25% |
| Above ₹24 lakh | 30% |
Rebate: With the rebate increased to ₹60,000 in the new regime, individuals with income up to ₹12 lakh will have zero tax liability. This rebate does not apply to specific incomes like capital gains, cryptocurrency earnings, or online gaming winnings.
Income Tax Slabs for FY 2025–26 under the Old Tax Regime
The old tax regime continues with the same slab rates as before. The details are as follows:
1. Individuals Below 60 Years, NRIs, and HUFs
| Income Range (₹) | Tax Rate |
|---|---|
| Up to 2,50,000 | Nil |
| 2,50,001 – 5,00,000 | 5% |
| 5,00,001 – 10,00,000 | 20% |
| Above 10,00,000 | 30% |
Popular Deductions Available:
- Sections 80C, 80D, 80G, 80TTA
- House Rent Allowance (HRA), Leave Travel Allowance (LTA)
- Home loan interest (Section 24)
- Education loan interest (Section 80E)
2. Senior Citizens (Aged 60–80 Years)
| Income Range (₹) | Tax Rate |
|---|---|
| Up to 3,00,000 | Nil |
| 3,00,001 – 5,00,000 | 5% |
| 5,00,001 – 10,00,000 | 20% |
| Above 10,00,000 | 30% |
These rates remain unchanged for FY 2025–26, allowing taxpayers to continue availing various deductions and exemptions under the old regime.
3. Income Tax Slabs for Super Senior Citizens (Above 80 Years)
For resident individuals over 80 years of age, the basic exemption limit rises to ₹5,00,000.
| Income Range (₹) | Tax Rate |
|---|---|
| Up to 5,00,000 | Nil |
| 5,00,001 – 10,00,000 | 20% |
| Above 10,00,000 | 30% |
Note: The new tax regime does not provide separate slab benefits for senior or super senior citizens.
New Tax Regime vs Old Tax Regime – Which is Better?
1. Comparison of Tax Slabs
Below is a detailed comparison of old and new tax regimes for FY 2025–26, including rates and surcharge.
1.1 Individuals Below 60 Years and Non-Residents
| Old Regime | New Regime (u/s 115BAC) | ||||
|---|---|---|---|---|---|
| Income Slab (₹) | Rate | Tax Calculation | Income Slab (₹) | Rate | Tax Calculation |
| Up to 2,50,000 | Nil | Nil | Up to 4,00,000 | Nil | Nil |
| 2,50,001 – 5,00,000 | 5% | 5% of income above 2,50,000 | 4,00,001 – 8,00,000 | 5% | 5% of income above 4,00,000 |
| 5,00,001 – 10,00,000 | 20% | 12,500 + 20% of income above 5,00,000 | 8,00,001 – 12,00,000 | 10% | 20,000 + 10% of income above 8,00,000 |
| 10,00,001 – 50,00,000 | 30% | 1,12,500 + 30% of income above 10,00,000 | 12,00,001 – 16,00,000 | 15% | 60,000 + 15% of income above 12,00,000 |
| 50,00,001 – 1 crore | 30% + 10% surcharge | 16,00,001 – 20,00,000 | 20% | 1,20,000 + 20% of income above 16,00,000 | |
| 1 – 2 crore | 30% + 15% surcharge | 20,00,001 – 24,00,000 | 25% | 2,00,000 + 25% of income above 20,00,000 | |
| 2 – 5 crore | 30% + 25% surcharge | Above 24,00,000 | 30% | 3,00,000 + 30% of income above 24,00,000 | |
| Above 5 crore | 30% + 37% surcharge | 24,00,001 – 50,00,000 | 30% + 10% surcharge | ||
| 50,00,001 – 1 crore | 30% + 10% surcharge | ||||
| 1 – 2 crore | 30% + 15% surcharge | ||||
| Above 2 crore | 30% + 25% surcharge |
Conclusion: The new tax regime offers lower slab rates and is generally more tax-efficient for this group.
1.2 Resident Senior Citizens (60–80 Years)
| Old Regime | New Regime (u/s 115BAC) | ||||
|---|---|---|---|---|---|
| Income Slab (₹) | Rate | Tax Calculation | Income Slab (₹) | Rate | Tax Calculation |
| Up to 3,00,000 | Nil | Nil | Up to 4,00,000 | Nil | Nil |
| 3,00,001 – 5,00,000 | 5% | 5% of income above 3,00,000 | 4,00,001 – 8,00,000 | 5% | 5% of income above 4,00,000 |
| 5,00,001 – 10,00,000 | 20% | 10,000 + 20% of income above 5,00,000 | 8,00,001 – 12,00,000 | 10% | 20,000 + 10% of income above 8,00,000 |
| 10,00,001 – 50,00,000 | 30% | 1,10,000 + 30% of income above 10,00,000 | 12,00,001 – 16,00,000 | 15% | 60,000 + 15% of income above 12,00,000 |
| 50,00,001 – 1 crore | 30% + 10% surcharge | 16,00,001 – 20,00,000 | 20% | 1,20,000 + 20% of income above 16,00,000 | |
| 1 – 2 crore | 30% + 15% surcharge | 20,00,001 – 24,00,000 | 25% | 2,00,000 + 25% of income above 20,00,000 | |
| 2 – 5 crore | 30% + 25% surcharge | Above 24,00,000 | 30% | 3,00,000 + 30% of income above 24,00,000 | |
| Above 5 crore | 30% + 37% surcharge | 24,00,001 – 50,00,000 | 30% + 10% surcharge | ||
| 50,00,001 – 1 crore | 30% + 10% surcharge | ||||
| 1 – 2 crore | 30% + 15% surcharge | ||||
| Above 2 crore | 30% + 25% surcharge |
Conclusion: For senior citizens too, the new regime generally proves more advantageous due to its wider exemption limits and reduced rates.
Income Tax Slabs for Resident Senior Citizens (Age 80+): FY 2025–26 (AY 2026–27)
Old Tax Regime
- Up to ₹5 lakh: Nil
- ₹5–10 lakh: 20% on income above ₹5 lakh
- ₹10–50 lakh: ₹1,00,000 + 30% on income above ₹10 lakh
- ₹50 lakh–₹1 crore: Same as above + 10% surcharge
- ₹1–2 crore: Same as above + 15% surcharge
- ₹2–5 crore: Same as above + 25% surcharge
- Above ₹5 crore: Same as above + 37% surcharge
New Tax Regime (u/s 115BAC)
- Up to ₹4 lakh: Nil
- ₹4–8 lakh: 5% on income above ₹4 lakh
- ₹8–12 lakh: ₹20,000 + 10% on income above ₹8 lakh
- ₹12–16 lakh: ₹60,000 + 15% on income above ₹12 lakh
- ₹16–20 lakh: ₹1,20,000 + 20% on income above ₹16 lakh
- ₹20–24 lakh: ₹2,00,000 + 25% on income above ₹20 lakh
- Above ₹24 lakh: ₹3,00,000 + 30% on income above ₹24 lakh
- Surcharge: 10% for ₹50 lakh–₹1 crore, 15% for ₹1–2 crore, 25% above ₹2 crore
Bottom line: The new regime is generally more favorable for very senior citizens due to lower slab rates.
Key Differences Between Old and New Tax Regimes
| Basis | Old Regime | New Regime |
|---|---|---|
| Deductions & Exemptions | Multiple deductions like HRA, 80C investments | Very limited exemptions and deductions |
| Who Benefits | Ideal for those who invest for tax savings and retirement | Suits middle-income earners with minimal tax planning |
| Default Status | Not default; must opt in | Default regime |
| Standard Deduction | ₹50,000 for salaried individuals | ₹75,000 for salaried individuals |
| Rebate | Up to ₹12,500 | Up to ₹60,000 (FY 2025–26) |
Choosing the Most Beneficial Tax Regime for FY 2025–26
General Guidance
- Old Regime: Best for taxpayers who can claim substantial deductions (investments, HRA, insurance, etc.) adding up to several lakhs.
- New Regime: Better suited for middle-income earners or anyone with few deductions.
Break-Even Deductions
If your total deductions exceed the “break-even” amount for your income level, the old regime usually results in lower tax. Otherwise, the new regime is preferable.
| Gross Income (₹) | Break-Even Deductions (₹) |
|---|---|
| Up to 5 lakh | Both regimes equal |
| 7 lakh | 1,50,000 |
| 10 lakh | 4,50,000 |
| 11 lakh | 5,50,000 |
| 12 lakh | 6,50,000 |
| 13 lakh | 6,87,500 |
| 14 lakh | 5,18,750 |
| 15 lakh | 5,43,750 |
| 16 lakh | 5,68,750 |
| 17 lakh | 6,08,330 |
| 18 lakh | 6,41,670 |
| 19 lakh | 6,75,000 |
| 20 lakh | 7,08,330 |
| 22 lakh | 7,54,170 |
| 24 lakh | 7,87,500 |
| 25 lakh | 8,00,000 |
Example: Deductions of ₹4.5 Lakh
The table below shows which regime is more advantageous when total deductions are ₹4.5 lakh:
| Gross Income (₹) | New Regime | Old Regime |
|---|---|---|
| Up to 5 lakh | ✓ | ✓ |
| 7 lakh | ✗ | ✓ |
| 10 lakh | ✗ | ✓ |
| 11 lakh – 25 lakh | ✓ | ✗ |
Tip: Decide on your regime at the start of the financial year.
Estimate total income, list all deductions, and compare tax liability under both regimes to pick the most cost-effective option.
Shifting Tax Regimes & Form 10-IEA Requirements
If you decide that the old tax regime saves you more tax, you must formally opt for it.
- Default rule: The new regime is automatically applied unless you choose otherwise, which could increase your tax bill.
- Form 10-IEA:
- Mandatory for individuals or HUFs with business or professional income who wish to move into or out of the old regime.
- File the form every time you switch between regimes.
Tax Calculation Examples – FY 2025-26 (AY 2026-27)
Example 1 – Middle Income, Limited Deductions
- Profile: Mr. Ramu earns ₹12 lakh salary, invests ₹1.5 lakh in PPF, pays ₹30,000 for health insurance.
- FY 2024-25 tax: New regime ₹71,500 vs. Old regime ₹1,10,760 → New regime saved ₹39,260.
- FY 2025-26 tax: With the higher rebate under Section 87A, zero tax in the new regime on ₹12 lakh, while the old regime would still levy tax.
- Takeaway: For many earners up to ₹12 lakh, the new regime is nearly tax-free.
Example 2 – High Income, Heavy Deductions
- Profile: Mr. Anban earns ₹25 lakh, pays ₹45,000/month rent (₹4 lakh HRA), has a home-loan EMI, and claims deductions of ₹1.5 lakh (80C), ₹50,000 (80D), and ₹50,000 (80CCD(1B))—₹9 lakh total deductions.
- Tax liability: New regime ₹3,19,800 vs. Old regime ₹3,04,200 → Old regime saved ₹15,600.
- Takeaway: With significant deductions, the old regime wins.
Example 3 – High Income, No Deductions
- Profile: Mr. K earns ₹20 lakh salary + ₹20,000 interest, no deductions.
- Tax liability: Old regime ₹4,19,640 vs. New regime ₹1,96,560 → New regime is clearly better.
Key Insights
- New regime: Generally best for middle-income earners or anyone with few deductions.
- Old regime: Beneficial when large deductions (HRA, home loan interest, 80C, etc.) exceed the break-even point.
- Action step: Evaluate income and deductions early in the year and file Form 10-IEA if you need to lock in the old regime.
How to Save Taxes under the New Regime for FY 2025–26
Although deductions in the new tax regime are fewer, smart planning can still reduce your liability. Key options include:
1. Employer’s NPS Contribution – Section 80CCD(2)
- Contributions made by your employer to the National Pension System qualify for deduction.
- You can claim up to 14% of basic salary (for government employees) or the applicable limit for others.
2. Standard Deduction
- Every salaried individual can claim a flat ₹75,000 deduction from salary income.
- This applies even if you do not invest in other tax-saving instruments.
3. Optimise Perquisites
- Opt for company benefits like car lease plans, which help lower taxable income.
- Certain allowances—transport, conveyance, daily allowance—remain exempt.
- Perks such as mobile reimbursement or employer-provided transport (rail or air) are also tax-free under both regimes.
Tip: Work with your employer to structure your CTC package so you can capture the maximum allowable exemptions.
Income Tax Changes from 1 April 2025 (FY 2025-26)
1. Slab Rate Relaxation
- Maximum 30% rate now applies only on income above ₹24 lakh (earlier ₹15 lakh).
- Basic exemption limit increased from ₹3 lakh to ₹4 lakh, lowering tax for all new-regime taxpayers.
2. Higher Rebate
- Rebate under section 87A rises to ₹60,000.
- Income up to ₹12 lakh is effectively tax-free under the new regime (earlier limit ₹7 lakh with ₹25,000 rebate).
3. TDS Threshold Relaxation
- Higher cut-off limits mean no TDS deduction on many payments unless they cross the revised threshold, easing compliance.
4. Deductions & Exemptions Updates
- NPS Vatsalya enjoys the same tax benefits as regular NPS.
- All NPS withdrawals made on or after 29 Aug 2025 are fully exempt.
- Start-up tax holiday under section 80-IAC extended till 2030.
Income Tax Slabs for FY 2024-25 (AY 2025-26) – New Tax Regime
Below are the current slab rates applicable under the new tax regime for FY 2024-25:
| Income Range (₹) | Tax Rate |
|---|---|
| Up to 3,00,000 | Nil |
| 3,00,001 – 7,00,000 | 5% |
| 7,00,001 – 10,00,000 | 10% |
| 10,00,001 – 12,00,000 | 15% |
| 12,00,001 – 15,00,000 | 20% |
| Above 15,00,000 | 30% |
Rebate under Section 87A:
- Individuals with total income up to ₹7 lakh are eligible for a rebate of up to ₹25,000, resulting in zero tax liability under the new regime.
This structure remains in force for FY 2024-25 (Assessment Year 2025-26) until the revised slabs of FY 2025-26 take effect.
Tax Benefits from New Income Tax Slabs – FY 2024-25 vs FY 2025-26
The table below highlights the tax benefits available under the revised regime for FY 2025-26 when compared with FY 2024-25. The income shown in the first column reflects the taxable amount, i.e., income after applying all eligible deductions and exemptions as per the new regime. The second column indicates the reduction in tax liability for FY 2025-26 against FY 2024-25. These savings arise entirely from changes in the slab rates.
Taxable Income Level (Rs.) | Tax Savings for FY 2025-26 (Rs.)
7 lakhs | 0
8 lakhs | 31,200
10 lakhs | 52,000
12 lakhs | 83,200
15 lakhs | 36,400
18 lakhs | 72,800
20 lakhs | 93,600
25 lakhs | 1,14,400
50 lakhs | 1,14,400
Surcharge
A surcharge is essentially a tax imposed on the calculated tax amount, not on income directly. It becomes applicable when an individual’s taxable income exceeds Rs. 50 lakhs. The table below outlines the surcharge rates under both the old and new regimes.
Income Limit | Surcharge – Old Regime | Surcharge – New Regime
Up to Rs. 50 lakhs | Nil | Nil
Rs. 50 lakhs to Rs. 1 crore | 5% | 5%
Rs. 1 crore to Rs. 2 crore | 15% | 15%
Rs. 2 crore to Rs. 5 crore | 25% | 25%
Above Rs. 5 crore | 37% | 25%
For dividend income and capital gains under sections 111A, 112A, and 112, the surcharge is capped at 15%, even when such income surpasses Rs. 2 crore.
Cess
Along with income tax and surcharge, a health and education cess of 4% is charged in all cases. This cess applies wherever income tax is payable.
Rebate
If your total taxable income falls within a specified limit, a rebate reduces the tax liability to zero.
The amount of rebate varies depending on the regime selected and the financial year.
In the new regime, marginal relief on rebate is available, which is not the case under the old regime.
From FY 2025-26 onwards, rebates will not apply to special income such as capital gains, online gaming income, and similar categories.
Rebate Applicability Table
Financial Year | Regime | Maximum Rebate | Income Limit for Rebate
FY 2024-25 | New | Rs. 25,000 | Rs. 7 lakhs
FY 2025-26 | New | Rs. 60,000 | Rs. 12 lakhs
FY 2024-25 | Old | Rs. 12,500 | Rs. 5 lakhs
FY 2025-26 | Old | Rs. 12,500 | Rs. 5 lakhs
Note: In each of the above cases, the rebate reduces the overall tax liability to zero.
Conclusion
Over time, tax structures, slab rates, and deduction options have been revised to reflect economic shifts, policy directions, and technological progress. Staying updated with these changes is crucial for ensuring compliance and maximizing benefits. The revised income tax slabs for FY 2025-26 (AY 2026-27) aim to boost taxpayer savings and ease compliance by lowering tax burdens. This reduces the need for complex tax planning and extensive compliance. However, individuals with higher incomes and significant deductions may still find the old regime more suitable. It is important to review your income and investment profile before making a choice.
How to choose between the old and new tax regimes while filing?
For FY 2024-25, the new tax regime is set as the default option. However, you can still select the old regime if it offers you better tax savings. If your total income includes profits and gains from business or profession, you must file Form 10IEA before submitting your return, within the ITR due date, to opt for the desired regime.
Which tax regime is the default?
From FY 2025-26 onwards, the default option is the new tax regime.
Which ITR form should I use?
ITR forms are not decided by tax slabs. They depend on your sources of income and your total income level.
Can I switch between old and new regimes every year?
Salaried taxpayers may change their choice of regime each year while filing ITR. Business taxpayers, however, are allowed to switch only once and then revert back only once.
Do senior citizens get additional exemptions under the new regime?
No, the new regime does not provide higher exemption limits for senior or super senior citizens.
What are the slab rates for FY 2024-25 under the new regime?
- Up to ₹3 lakh – Nil
- ₹3 lakh to ₹7 lakh – 5%
- ₹7 lakh to ₹10 lakh – 10%
- ₹10 lakh to ₹12 lakh – 15%
- ₹12 lakh to ₹15 lakh – 20%
- Above ₹15 lakh – 30%
Can I claim deductions under section 80C in the new regime?
No, most deductions and exemptions, including 80C, are not available in the new regime.
Are slab rates different for various categories of taxpayers?
Yes, under the old regime, different categories such as senior citizens have separate slab rates. Under the new regime, the same slab rates apply to all taxpayers.
Is the ITR filing due date the same for everyone?
No. For individuals not subject to audit, the due date is normally 31st July of the assessment year (unless extended). For FY 2024-25, it was extended to 15th September.
Who decides tax slab rates, and can they change?
The Government sets slab rates, and they can change. Any revisions are proposed in the Union Budget and presented in Parliament.
How to file ITR online?
You can e-file through the official Income Tax e-filing portal. You may also use the offline JSON utility. Don’t forget to verify your return within 30 days, otherwise it will be considered invalid.
How is surcharge on income tax calculated?
Surcharge is applied on the tax payable, not directly on income. Rates are:
- 10% if total income exceeds ₹50 lakh
- 15% if above ₹1 crore
- 25% if above ₹2 crore
Is agricultural income taxable?
Agricultural income is exempt from tax. However, it is considered for determining the tax rate on your non-agricultural income.
If my income is ₹7 lakh, how much tax will I pay?
Under the new regime, no tax is payable on income up to ₹7 lakh due to the available rebate
What is Form 16 and how is it useful?
Form 16 is a certificate issued by employers that shows TDS deducted on salary. It helps in filing accurate ITR.
Can I revise my ITR after submission?
Yes, you can revise your return within the time limit allowed under the Income Tax Act if you discover an error or omission.
What happens if I miss the ITR filing deadline?
Late filing attracts a penalty under section 234F and may also lead to interest on unpaid taxes.
Can I file ITR if I have no taxable income?
Yes, filing a nil return is allowed. It is often recommended to keep a financial record, which may help in visa, loan, or credit card applications.
Do I need to pay advance tax?
If your tax liability after TDS exceeds ₹10,000 in a year, you are required to pay advance tax in installments.
