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

The Union Budget 2025, presented by the Finance Minister Nirmala Sitharaman, has introduced new income tax slabs under the new tax regime. These revised tax slabs will apply from April 1, 2025, for the financial year 2025-26 (assessment year 2026-27).

The new tax regime will continue to be the default tax system. This means, unless you, as a taxpayer, specifically choose the old regime, the new regime will apply automatically.

Under the new tax regime, income will be taxed as follows:

• Rs. 0 to Rs. 4 lakh - No tax

• Rs. 4 lakh to Rs. 8 lakh – 5%

• Rs. 8 lakh to Rs. 12 lakh – 10%

• Rs. 12 lakh to Rs. 16 lakh – 15%

• Rs. 16 lakh to Rs. 20 lakh – 20%

• Rs. 20 lakh to Rs. 24 lakh – 25%

• Above Rs. 24 lakh – 30%
  

Due to these changes, taxpayers can now save up to Rs. 1.14 lakh in taxes per year compared to earlier slabs under the new regime. This is because the basic exemption limit has increased to Rs. 4 lakh, and the tax rates have been structured more progressively.

 

Want to accurately compute your taxes this year? In this article, you will learn what an income tax slab is and how it works. You will get the complete details of the new income tax slabs and rates for FY 2025-26 (AY 2026-27).

Moreover, a comparison has been made between the old and new tax regimes to let you decide which one is better for different types of taxpayers. Read this article till the end to do smart tax planning this financial year.

Income tax slabs for FY 2025-26 under the new tax regime

The Government of India has updated the income tax slabs under the new tax regime in the Union Budget 2025. These changes will apply from April 1, 2025, for the financial year 2025-26 (AY 2026-27).

The main objective is to make the new tax regime more appealing, particularly for taxpayers who find it difficult to claim deductions through savings and investments.

Under the revised structure for FY 2025-26, the highest tax rate of 30% will apply only to incomes above Rs. 24 lakh. For those unaware, the income limit previously was Rs. 15 lakh. This change results in significant tax savings as more income falls into lower tax brackets (before the highest 30% rate comes into effect).

The table below shows the new tax slabs for FY 2025-26:

Income range	Tax rate
0 – Rs. 4,00,000	0%
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%

Please note that in the July 2024 Budget (released before the February 2025 Union Budget), the income tax slabs in the new tax regime were revised. This revision was made by raising the limits of two tax brackets:

• The Rs. 3-6 lakh slab became Rs. 3-7 lakh and

• The Rs. 6-9 lakh slab became Rs. 7-10 lakh

These adjustments reduced the tax burden slightly for middle-income earners. Additionally, some changes were also made in February 2023, which introduced benefits like:

• Standard deduction

• An increase in the basic exemption limit

• A higher tax rebate under Section 87A for incomes up to Rs. 7 lakh

What is income tax slab?

In India, individuals pay income tax based on how much they earn. The government has created income tax slabs, which are different ranges of income. Each slab has a specific tax rate.

As your income increases:

• You move into a higher slab and

• You pay tax at a higher rate on the portion of income that falls in that slab.

Due to this system, people with higher incomes pay more tax. Now, please note that there are two types of tax systems:

Old regime	New regime
In the old tax regime, the tax slabs vary based on a person’s age: Regular individuals (less than 60 years) Senior citizens (60+ years) Super senior citizens (80+ years) All the above-mentioned taxpayer categories have different slab rates.	In the new tax regime, the slabs are the same for all individuals (regardless of age).

As a taxpayer, you can choose either of the regimes while filing your Income Tax Return (ITR). Be aware that the government can change these tax slabs during the Union Budget, which is usually announced every year.

Income Tax Changes From 1st April 2025: New Rules

The financial year 2025–26 starts on April 1, 2025. From this date, several new income tax rules came into force. These changes were announced in the Union Budget and apply to income earned during the FY 2025–26.

Some major updates you must be aware of are:

• An increase in the basic exemption limit

• Changes in tax slabs and rates

• Updates to TDS and TCS rules

Please note that these rules affect your total tax liability and determine how much tax must be deducted from your different income sources (say, salary, bank interest, or dividends).

Below are 11 income tax changes you must know for accurate tax planning and ITR filing:

1. New income tax slabs and rates under the new income tax regime

The government has revised the income tax slabs under the new tax regime. One of the major changes is the increase in the basic exemption limit from Rs. 3 lakh to Rs. 4 lakh. From now onwards, zero tax will be charged on income up to Rs. 4 lakh.

Earlier, a 30% tax rate applied to income above Rs. 15 lakh. But from FY 2025–26, this 30% rate will only apply to income above Rs. 24 lakh. This change reduces the tax burden for individuals earning more than Rs. 15 lakh.

For your reference, below is the revised tax slab under the new regime:

Income range	Tax rate
0 – Rs. 4,00,000	0%
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%

Please note that these revised slabs apply only under the new tax regime. It is now the default option unless you opt for the old regime.

2. Zero tax on income up to Rs 12 lakh - Rs 12.75 lakh for salaried individuals

As per the latest revisions made in the new tax regime, individuals earning up to Rs. 12 lakh in FY 2025–26 will not have to pay any income tax. This is possible due to the tax rebate under Section 87A of the Income Tax Act. It completely offsets the tax liability for incomes up to Rs. 12 lakh. This benefit applies only to taxpayers who opt for the new tax regime.

For salaried individuals, the benefit extends slightly more. If your income is up to Rs. 12.75 lakh, you still pay zero tax. This is due to the standard deduction of Rs. 75,000, which:

• Reduces your taxable income to Rs. 12 lakh and

• Makes you eligible for the rebate

It is important to note that the rebate does not mean exemption from ITR filing. Instead, it only means you won’t have to pay tax if you qualify under the rule.

3. Changes in ULIP taxation structure

From FY 2025–26, the government has made changes to the tax rules for ULIPs (Unit-Linked Insurance Plans). These changes particularly affect ULIPs that do not qualify for exemption under Section 10(10D) of the Income Tax Act.

Now, as per the change, if a ULIP does not satisfy the conditions of Section 10(10D) (particularly the rule that the annual premium must not exceed Rs. 2.5 lakh), then the maturity amount you receive at the end of the policy will be taxed.

Earlier (before April 1, 2025), ULIP maturity proceeds were completely tax-free under Section 10(10D), regardless of the premium amount.

But now (from FY 2025-26 onwards), if the annual premium exceeds Rs. 2.5 lakh, the ULIP loses its tax-free status. Hence, the maturity amount will be taxed as capital gains (not exempt income). It will be treated like investments in equity mutual funds because ULIPs invest in the stock market.

The applicable latest tax rates are:

• Short-term capital gains (STCG): 20% (if held for less than 3 years).

• Long-term capital gains (LTCG): 12.5% (if held for more than 3 years).
  

Please note that no indexation benefit is allowed. At the same time, ULIPs with annual premiums up to Rs. 2.5 lakh will continue to enjoy tax-free maturity benefits under Section 10(10D).

4. TDS rates and thresholds adjustments

The Union Budget 2025 has amended several TDS provisions, such as:

• Reduction in TDS rates under Section 194LBC and

• Raising the TDS threshold limits under several TDS sections

Let’s study these changes in detail:

A) Changes made in Section 194LBC

Section 194LBC deals with income distributed by a securitisation trust to investors. For those unaware, a securitisation trust is a financial structure where pooled financial assets (like loans) are sold to investors.

Till March 31, 2025, the TDS rates under Section 194LBC were:

• 25% for individuals and Hindu Undivided Families (HUFs)

• 30% for other types of investors (like companies)

However, from April 1, 2025, the government has simplified this by applying a uniform TDS rate of 10% for all resident investors. This means all resident investors (regardless of whether they are individuals, HUFs, or companies) will face the same 10% TDS deduction on income received from securitisation trusts.

B) Increased TDS threshold limits

Budget 2025 has raised the threshold limits under many TDS sections. The threshold is the minimum amount at which TDS becomes applicable. If the income is below this limit, no TDS will be deducted.

The new thresholds now allow taxpayers to receive more income without the deduction of TDS. Below is the comparison table of the old vs new threshold limits:

Section	Nature of payment	Old threshold	New threshold (From Apr 1, 2025)
193	Interest on securities	Nil	Rs. 10,000 Rs. 50,000 for senior citizens
194A	Interest (other than securities)	Rs. 5,000 / Rs. 10,000	Rs. 50,000 Rs. 1,00,000 (senior citizens)
194	Dividend (individual shareholders)	Rs. 5,000	Rs. 10,000
194K	Income from mutual funds	Rs. 5,000	Rs. 10,000
194B	Winnings (lottery, crossword, etc.)	Rs. 10,000	Aggregate more than Rs. 10,000 per year
194BB	Winnings from horse races	Rs. 10,000	Aggregate more than Rs. 10,000 per year
194D	Insurance commission	Rs. 15,000	Rs. 20,000
194G	Commission on lottery tickets	Rs. 15,000	Rs. 20,000
194H	Commission or brokerage	Rs. 15,000	Rs. 20,000
194I	Rent	Rs. 2,40,000 per year	Rs. 50,000 per month or part of a month
194J	Professional or technical services	Rs. 30,000	Rs. 50,000
194LA	Compensation on compulsory land acquisition	Rs. 2,50,000	Rs. 5,00,000

Individuals receiving income below these new thresholds will get the full amount without any tax being deducted at the source.

5. ITR non-filers relief from enhanced TDS/TCS

Earlier, if someone had not filed their ITR in the past two years and their TDS/ TCS exceeded a certain limit, they were subject to higher TDS or TCS rates. This rule was covered under:

• Section 206AB (for TDS) and

• Section 206CCA (for TCS)

These sections required the deductor or collector to verify whether the person receiving payment had filed an ITR or not.

Now, this process created several practical problems. For example, it was difficult for companies or banks to check if someone had filed their returns. As a result, many were forced to deduct tax at higher rates, even when it wasn’t necessary. This led to blocked money and a greater compliance burden.

To solve this issue, the government has removed both Section 206AB and 206CCA starting from April 1, 2025. Thus, higher TDS/ TCS rates for non-filers will no longer apply from FY 2025-26 onwards.

6. NPS Vatsalya contribution deductions via Section 80CCD

The Vatsalya Scheme under the National Pension System (NPS) has been brought under Section 80CCD of the Income Tax Act. From FY 2025-26 onwards, individuals who contribute to the NPS Vatsalya account can now claim a tax deduction for those contributions (just like other NPS contributions).

However, this tax benefit is only available if the individual is filing under the old tax regime. Thus, as a taxpayer, you can:

• Contribute to the NPS Vatsalya Scheme

• Opt for the old regime

• Reduce your taxable income by the contribution amount under Section 80CCD (subject to existing limits)

7. Enhanced medical treatment perquisite limits

From April 1, 2025, the government has raised the tax-exempt limit on medical expenses paid by employers for treatment abroad. This applies to both:

• The employee and

• Their family members

Earlier, there were specific limits on how much could be tax-exempt. Any amount exceeding that limit was added to the employee’s taxable income and taxed as a perquisite.

Now, the revised rules allow a higher portion of such expenses to be exempt from tax. However, this benefit applies only when the medical treatment expenses are paid directly by the employer.

8. Relief from legal action for late TCS payments in specific cases

From April 1, 2025, the government has granted immunity to certain taxpayers from legal penalties related to late TCS payments. As per the latest changes, if a person delays depositing TCS, no legal action will be taken if they pay it on time before filing the quarterly TCS return.

The goal here is to avoid penal action in genuine delay cases, as long as the payment is made before the return deadline.

9. Extension for submitting updated returns

 

Starting April 1, 2025, taxpayers will have more time to correct or update their ITRs. Previously, individuals were allowed to submit an updated return within 24 months (2 years) from the end of the assessment year.

The new rules double this time to 48 months (4 years). Now, you have four years to submit an updated return. This extension gives more flexibility to fix past errors without facing penalties for non-disclosure.

10. Simplified self-occupied property valuation

In the Union Budget 2025, the government has simplified how homeowners calculate the value of their self-occupied properties for tax purposes.

From April 1, 2025, individuals can declare a "nil" (zero) annual value for up to two self-occupied houses. Now, they won’t have to pay tax on the notional rent for these two properties.

11. Tax authority to review current and previous ITRs for discrepancies

Starting April 1, 2025, the Income Tax Department will start comparing a taxpayer’s current and previous ITRs to check for any differences. Such a comparative analysis will let the department:

• Identify inconsistencies in reported income or deductions over the years and

• Detect cases of underreporting or manipulation

While the implementation date is fixed, the tax authorities have not yet announced what specific issues they will look for in this comparison. As a taxpayer, you are advised to maintain consistency and accuracy in your returns year-on-year to avoid scrutiny.

Features of latest tax regime: FY 2025-26 (AY 2026-27)

The new tax regime introduces significant changes for taxpayers, offering revised exemption limits and rebates while simplifying the tax structure. These updates aim to make the tax system more attractive, particularly for middle-income earners, by increasing exemptions and reducing overall tax liability.

Feature	Details
Default tax regime	The new tax regime remains the default option. Individuals without business income can opt for the old tax regime in any financial year.
Basic exemption limit	Increased from Rs. 3 lakh to Rs. 4 lakh effective April 1, 2025 (FY 2025-26), providing additional tax relief to all individual taxpayers.
Tax rebate (Section 87A)	Enhanced to cover taxable incomes up to Rs. 12 lakh (previously Rs. 7 lakh), ensuring zero tax liability up to this amount.
Surcharge rate	Highest surcharge rate of 25% on incomes exceeding Rs. 2 crore remains unchanged under Budget 2025.

Income tax slab and rates for FY 2024-25 (AY 2025-26) after Budget 2024

The new tax regime has been designated as the default option for individual taxpayers in FY 2024-25. While this regime offers simplified tax calculations with fewer deductions, taxpayers still retain the option to choose the old tax regime if it proves more advantageous for their specific financial situation.

The new tax regime slab rates in FY 2024-25 (AY 2025-26) have been revised, offering taxpayers additional tax relief compared to the rates applicable in FY 2023-24 (AY 2024-25).

Key changes and important notes

• These revised rates apply uniformly to all taxpayers, regardless of age
• The same tax slabs are applicable for:
  • Individuals below 60 years
  • Senior citizens (aged 60 to 80 years)
  • Super senior citizens (aged 80 years and above)
• The old tax regime continues to offer certain advantages for senior citizens, such as higher exemption limits

Comparative tax slab rates

Annual income slab	New tax regime FY (24-25 (AY 25-26)	New tax regime FY 23-24 (AY 24-25)
Up to Rs. 3,00,000	Nil	Nil
Rs. 3,00,001 to Rs. 6,00,000	5% on income exceeding Rs. 3,00,000	5% on income exceeding Rs. 3,00,000
Rs. 6,00,001 to Rs. 7,00,000	5% on income exceeding Rs. 3,00,000	15,000 + 10% on income exceeding Rs. 6,00,000
Rs. 7,00,001 to Rs. 9,00,000	20,000 + 10% on income exceeding Rs. 7,00,000	25,000 + 10% on income exceeding Rs. 7,00,000
Rs. 9,00,001 to Rs. 10,00,000	20,000 + 10% on income exceeding Rs. 7,00,000	45,000 + 10% on income exceeding Rs. 9,00,000
Rs. 10,00,001 to Rs. 12,00,000	50,000 + 15% on income exceeding Rs. 10,00,000	55,000 + 15% on income exceeding Rs. 10,00,000
Rs. 12,00,001 to Rs. 15,00,000	80,000 + 20% on income exceeding Rs. 12,00,000	90,000 + 20% on income exceeding Rs. 12,00,000
Above Rs. 15,00,000	1,40,000 + 30% on income exceeding Rs. 15,00,000	1,50,000 + 30% on income exceeding Rs. 15,00,000

New income tax slabs under the old tax regime for individual, HUF, AOP, and BOI

Under the old tax regime for FY 2024-25, different tax slabs apply based on the age of individual taxpayers, while Hindu Undivided Families (HUFs), Associations of Persons (AOPs), and Bodies of Individuals (BOIs) follow the same structure as individuals below 60 years. The tax rates remain unchanged, with benefits such as deductions and exemptions available under this regime.

Income tax slab rates for FY 2024-25 under the old regime

Annual taxable income	Individuals below 60 years, HUF, AOP, BOI	Senior citizens (60-80 years)	Super senior citizens (Above 80 years)
Up to Rs. 2,50,000	Nil	-	-
Up to Rs. 3,00,000	-	Nil	-
Up to Rs. 5,00,000	-	-	Nil
Rs. 2,50,001 - Rs. 5,00,000	5% on income exceeding Rs. 2,50,000	5% on income exceeding Rs. 3,00,000	-
Rs. 5,00,001 - Rs. 10,00,000	Rs. 12,500 + 20% on income exceeding Rs. 5,00,000	Rs. 10,000 + 20% on income exceeding Rs. 5,00,000	20% on income exceeding Rs. 5,00,000
Above Rs. 10,00,000	Rs. 1,12,500 + 30% on income exceeding Rs. 10,00,000	Rs. 1,10,000 + 30% on income exceeding Rs. 10,00,000	Rs. 1,00,000 + 30% on income exceeding Rs. 10,00,000

These tax slabs ensure progressive taxation, allowing deductions and exemptions under the old tax regime, making it a viable option for taxpayers looking to optimise their tax liability.

Old tax regime vs new tax regime: FY 2024-25 (AY 2025-26) vs. FY 2023-24 (AY 2024-25)

Starting FY 2024-25, the new tax regime is the default option for individual taxpayers. Unlike the old regime, it provides lower tax rates but limits deductions and exemptions. However, eligible taxpayers can still choose the old tax regime if it aligns better with their financial planning.

A comparison of income tax slab rates for FY 2024-25 (AY 2025-26) and FY 2023-24 (AY 2024-25) highlights that the new tax regime offers enhanced tax relief, making it an attractive choice for many taxpayers. The table below provides a detailed comparison of tax slabs and rates under both regimes:

Comparison of income tax slabs – Old vs. New Tax Regime

Income slab	Old tax regime – Tax rate (FY 2024-25 & FY 2023-24)	New tax regime (u/s 115BAC) – Tax rate (FY 2024-25 & FY 2023-24)
Up to Rs. 2,50,000	Nil	-
Up to Rs. 3,00,000	-	Nil
Rs. 2,50,001 - Rs. 5,00,000	5% above Rs. 2,50,000	-
Rs. 3,00,001 - Rs. 7,00,000	-	5% above Rs. 3,00,000
Rs. 5,00,001 - Rs. 10,00,000	Rs. 12,500 + 20% above Rs. 5,00,000	-
Rs. 7,00,001 - Rs. 10,00,000	-	Rs. 20,000 + 10% above Rs. 7,00,000
Rs. 10,00,001 - Rs. 50,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	-
Rs. 10,00,001 - Rs. 12,00,000	-	Rs. 50,000 + 15% above Rs. 10,00,000
Rs. 50,00,001 - Rs. 100,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000 + 10% surcharge	-
Rs. 12,00,001 - Rs. 15,00,000	-	Rs. 80,000 + 20% above Rs. 12,00,000
Rs. 100,00,001 - Rs. 200,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000 + 15% surcharge	-
Rs. 15,00,001 - Rs. 50,00,000	-	Rs. 1,40,000 + 30% above Rs. 15,00,000
Rs. 200,00,001 - Rs. 500,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000 + 25% surcharge	-
Rs. 50,00,001 - Rs. 100,00,000	-	Rs. 1,40,000 + 30% above Rs. 15,00,000 + 10% surcharge
Above Rs. 500,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000 + 37% surcharge	-
Rs. 100,00,001 - Rs. 200,00,000	-	Rs. 1,40,000 + 30% above Rs. 15,00,000 + 15% surcharge
Above Rs. 200,00,001	-	Rs. 1,40,000 + 30% above Rs. 15,00,000 + 25% surcharge

The Interim Budget 2024-25 initially retained the same tax slabs and rates for the Assessment Year 2025-26 as the previous year. However, the full Budget 2024 reinforced the new tax regime as the default option for individual taxpayers, Hindu Undivided Families (HUFs), and certain entities.

While taxpayers can still opt for the old tax regime to claim deductions and exemptions, the new tax regime has simplified tax calculations with revised slab rates. Taxpayers with business or professional income must carefully consider their choice, as they can only switch regimes once.

Old tax regime slabs and rates for individual taxpayers under 60 years (AY 2025-26, FY 2024-25)

The old tax regime follows a progressive taxation structure, allowing individual taxpayers below 60 years to benefit from a tax-free slab up to Rs. 2,50,000. Higher income brackets are taxed at increasing rates, starting from 5% for earnings between Rs. 2,50,001 and Rs. 5,00,000 and reaching 30% for income exceeding Rs. 10,00,000. Additionally, a surcharge applies to higher-income groups, starting at 10% for income above Rs. 50,00,000 and increasing to 37% for income exceeding Rs. 5,00,00,000. The table below outlines the applicable tax rates and surcharges under the old tax regime.

Income tax slabs and rates under the old tax regime (for individuals below 60 years)

Income slab (Rs.)	Income tax rate	Surcharge
Up to 2,50,000	Nil	Nil
2,50,001 - 5,00,000	5% above Rs. 2,50,000	Nil
5,00,001 - 10,00,000	Rs. 12,500 + 20% above Rs. 5,00,000	Nil
10,00,001 - 50,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	Nil
50,00,001 - 1,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	10%
1,00,00,001 - 2,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	15%
2,00,00,001 - 5,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	25%
Above 5,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	37%

Old tax regime slabs and rates for super senior citizens aged above 80 years (AY 2025-26, FY 2024-25)

For super senior citizens (aged 80 years and above), the old tax regime provides a higher tax exemption limit of Rs. 5,00,000. Income exceeding Rs. 5,00,000 is taxed at 20% up to Rs. 10,00,000 and 30% thereafter. A surcharge ranging from 10% to 37% is levied on incomes exceeding Rs. 50,00,000, with the highest rate applicable for incomes exceeding Rs. 5 crores.

Income tax slab	Income tax rate	Surcharge
Up to Rs. 5,00,000	Nil	Nil
Rs. 5,00,001 - Rs. 10,00,000	20% above Rs. 5,00,000	Nil
Rs. 10,00,001- Rs. 50,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	Nil
Rs. 50,00,001- Rs. 100,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	10%
Rs. 100,00,001- Rs. 200,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	15%
Rs. 200,00,001- Rs. 500,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	25%
Above Rs. 500,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	37%

Individual taxpayers aged less than 60 years old: latest tax slabs for Annual Year 2025-26

The following table displays the latest tax slabs and rates for individuals below 60 years. Tax rates increase progressively based on income brackets, with a maximum rate of 30% applicable for income exceeding Rs. 15,00,000.

Income tax slab	Income tax rate	Surcharge
Up to Rs. 3,00,000	Nil	Nil
Rs. 3,00,001 - Rs. 7,00,000	5% above Rs. 3,00,000	Nil
Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000	Nil
Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000	Nil
Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000	Nil
Rs. 15,00,001- Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	Nil
Rs. 50,00,001- Rs. 1,00,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	10%
Rs. 1,00,00,001- Rs. 2,00,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	15%
Above Rs. 2,00,00,001	Rs. 1,40,000 + 30% above Rs. 15,00,000	25%

Old vs new income tax slabs and tax rates for individual taxpayers aged less than 60 years old

The table below compares the old and new tax regimes for individual taxpayers aged below 60 years.

Old tax regime	New tax regime u/s 115BAC
Income tax slab	Income tax rate	Income tax slab	Income tax rate
Up to Rs. 2,50,000	Nil	Up to Rs. 3,00,000	Nil
Rs. 2,50,001 - Rs. 5,00,000	5% above Rs. 2,50,000	Rs. 3,00,001 - Rs. 7,00,000	5% above Rs. 3,00,000
Rs. 5,00,001 - Rs. 10,00,000	Rs. 12,500 + 20% above Rs. 5,00,000	Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000
Rs. 10,00,001- Rs. 50,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000
Rs. 50,00,001- Rs. 1,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000
Above Rs. 1,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000 + surcharge	Rs. 15,00,001- Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000

Senior citizen taxpayers aged between 60 to 80 years: New tax slabs for AY 2025-26

Senior citizens (aged 60-80 years) benefit from a higher exemption limit of Rs. 3,00,000. The tax rates progressively increase based on income brackets, reaching a maximum of 30%.

Income tax slab	Income tax rate	Surcharge
Up to Rs. 3,00,000	Nil	Nil
Rs. 3,00,001 - Rs. 7,00,000	5% above Rs. 3,00,000	Nil
Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000	Nil
Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000	Nil
Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000	Nil
Above Rs. 15,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	Nil

Old vs new income tax slabs and tax rates for senior citizen taxpayers aged between 60 to 80 years

To make informed financial decisions, senior citizens (aged 60 to 80 years) must understand the differences between the old and new income tax slabs. The Indian government has introduced new tax regimes to simplify tax calculations, making it crucial to assess how these changes impact tax liability. The following table provides a comparative analysis of the old and new tax slabs and rates, helping taxpayers determine the most beneficial tax regime.

Old tax regime	Income tax rate	Surcharge	New tax regime u/s 115BAC	Income tax rate	Surcharge
Up to Rs. 3,00,000	Nil	Nil	Up to Rs. 3,00,000	Nil	Nil
Rs. 3,00,001 - Rs. 5,00,000**	5% above Rs. 3,00,000	Nil	Rs. 3,00,001 - Rs. 7,00,000**	5% above Rs. 3,00,000	Nil
Rs. 5,00,001 - Rs. 10,00,000	Rs. 10,000 + 20% above Rs. 5,00,000	Nil	Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000	Nil
Rs. 10,00,001 - Rs. 50,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	Nil	Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000	Nil
Rs. 50,00,001 - Rs. 1,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	10%	Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000	Nil
Rs. 1,00,00,001 - Rs. 2,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	15%	Rs. 15,00,001 - Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	Nil
Above Rs. 2,00,00,001	Rs. 1,12,500 + 30% above Rs. 10,00,000	25%	Above Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	10-25%

Super senior citizen taxpayers aged over 80 years: New tax slabs for AY 2025-26

For individuals above 80 years of age, the income tax slabs and rates differ to provide additional financial relief. The table below presents the applicable tax rates under the new regime for AY 2025-26.

Income tax slab	Income tax rate	Surcharge
Up to Rs. 3,00,000	Nil	Nil
Rs. 3,00,001 - Rs. 7,00,000**	5% above Rs. 3,00,000	Nil
Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000	Nil
Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000	Nil
Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000	Nil
Above Rs. 15,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	10-25%

Old vs new income tax slabs and tax rates for super senior citizen individual taxpayers aged over 80 years

Super senior citizens (aged 80+) benefit from preferential tax treatment. The following comparison of the old and new tax slabs will help determine the most advantageous regime.

Old tax regime	Income tax rate	Surcharge	New tax regime u/s 115BAC	Income tax rate	Surcharge
Up to Rs. 5,00,000	Nil	Nil	Up to Rs. 3,00,000	Nil	Nil
Rs. 5,00,001 - Rs. 10,00,000	20% above Rs. 5,00,000	Nil	Rs. 3,00,001 - Rs. 7,00,000**	5% above Rs. 3,00,000	Nil
Rs. 10,00,001 - Rs. 50,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	Nil	Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000	Nil
Rs. 50,00,001 - Rs. 1,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	10%	Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000	Nil
Rs. 1,00,00,001 - Rs. 2,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	15%	Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000	Nil
Rs. 2,00,00,001 - Rs. 5,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	25%	Rs. 15,00,001 - Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	Nil
Above Rs. 5,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	37%	Above Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	10-25%

By comparing the old and new tax regimes, senior and super senior citizens can make informed decisions that optimise their tax savings. It is advisable to consult a tax professional before finalising tax declarations to ensure compliance with the latest regulations and maximise benefits.

Most important points for income tax slabs and rates for AY 2025-26 (FY 24-25)

The income tax slabs and rates for Assessment Year (AY) 2025-26 (Financial Year 2024-25) have undergone key modifications, impacting taxpayers across various categories. Below are the most significant points:

1. Surcharge and cess:
   • A 4% health and education cess is applicable on total tax payable.
   • Surcharge rates for income above Rs. 50 lakh:

Annual taxable income	Surcharge (old tax regime)	Surcharge (new tax regime)
Up to Rs. 50 Lakh	Nil	Nil
Rs. 50 Lakh - Rs. 1 Crore	10%	10%
Rs. 1 Crore - Rs. 2 Crore	15%	15%
Rs. 2 Crore - Rs. 5 Crore	25%	25%
Above Rs. 5 Crore	37%	25%

1. Gender neutrality: Income tax slabs and rates remain the same for male and female taxpayers.
2. Tax rebate:
   • Old Tax Regime: Income up to Rs. 5 lakh qualifies for a rebate of Rs. 12,500 under Section 87A.
   • New Tax Regime: Income up to Rs. 7 lakh qualifies for a full tax rebate under Section 87A.

Income tax slabs for Hindu Undivided Family (HUF) for AY 2025-2026

The income tax slabs for Hindu Undivided Families (HUFs) for the Assessment Year 2025-26 have been revised to provide better financial planning opportunities. The tax structure follows both the old tax regime and the new tax regime under section 115BAC, allowing taxpayers to choose their preferred structure.

Old tax regime			New tax regime u/s 115BAC
Income tax slab	Income tax rate	*Surcharge	Income tax slab	Income tax rate
Up to Rs. 2,50,000	Nil	Nil	Up to Rs. 3,00,000	Nil
Rs. 2,50,001 - Rs. 5,00,000**	5% above Rs. 2,50,000	Nil	Rs. 3,00,001 - Rs. 7,00,000**	5% above Rs. 3,00,000
Rs. 5,00,001 - Rs. 10,00,000	Rs. 12,500 + 20% above Rs. 5,00,000	Nil	Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000
Rs. 10,00,001- Rs. 50,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	Nil	Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000
Rs. 50,00,001- Rs. 1,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	10%	Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000
Rs. 1,00,00,001- Rs. 2,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	15%	Rs. 15,00,001- Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000
Rs. 2,00,00,001- Rs. 5,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	25%	Rs. 50,00,001- Rs. 1.00,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000
Above Rs. 5,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	37%	Rs. 1,00,00,001- Rs. 2,00,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000
			Above Rs. 2,00,00,001	Rs. 1,40,000 + 30% above Rs. 15,00,000

New Income tax slabs for Non-Resident Individual (AY 2025-26)

Non-resident individuals are taxed differently based on their global income sources. The tax slabs remain aligned with resident individual tax slabs but with specific provisions for non-residents.

Old tax regime			New tax regime u/s 115BAC
Income tax slab	Income tax rate	*Surcharge	Income tax slab	Income tax rate	*Surcharge
Up to Rs. 2,50,000	Nil	Nil	Up to Rs. 3,00,000	Nil	Nil
Rs. 2,50,001 - Rs. 5,00,000	5% above Rs. 2,50,000	Nil	Rs. 3,00,001 - Rs. 7,00,000	5% above Rs. 3,00,000	Nil
Rs. 5,00,001 - Rs. 10,00,000	Rs. 12,500 + 20% above Rs. 5,00,000	Nil	Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000	Nil
Rs. 10,00,001- Rs. 50,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	Nil	Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000	Nil
Rs. 50,00,001- Rs. 1,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	10%	Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000	Nil
Rs. 1,00,00,001- Rs. 2,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	15%	Rs. 15,00,001- Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	Nil
Rs. 2,00,00,001- Rs. 5,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	25%	Rs. 50,00,001- Rs. 1,00,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	10%
Above Rs. 5,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	37%	Rs. 1,00,00,001- Rs. 2,00,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	15%
			Above Rs. 2,00,00,001	Rs. 1,40,000 + 30% above Rs. 15,00,000	25%

Association of Persons (AOP) / Body of Individuals (BOI) / Trust / Artificial Juridical Person (AJP) for AY 2025-26

Entities classified under Association of Persons (AOPs), Body of Individuals (BOIs), Trusts, and Artificial Juridical Persons (AJPs) are subject to specific tax regulations. The tax slabs are structured to align with the taxation framework applicable to individual taxpayers and business entities.

Old tax regime			New tax regime u/s 115BAC
Income tax slab	Income tax rate	*Surcharge	Income tax slab	Income tax rate	*Surcharge
Up to Rs.  2,50,000	Nil	Nil	Up to Rs.  3,00,000	Nil	Nil
Rs.  2,50,001 - Rs.  5,00,000**	5% above Rs.  2,50,000	Nil	Rs.  3,00,001 - Rs.  7,00,000**	5% above Rs.  3,00,000	Nil
Rs.  5,00,001 - Rs.  10,00,000	Rs.  12,500 + 20% above Rs.  5,00,000	Nil	Rs.  7,00,001 - Rs.  10,00,000	Rs.  20,000 + 10% above Rs.  7,00,000	Nil
Rs.  10,00,001- Rs.  50,00,000	Rs.  1,12,500 + 30% above Rs.  10,00,000	Nil	Rs.  10,00,001 - Rs.  12,00,000	Rs.  50,000 + 15% above Rs.  10,00,000	Nil
Rs.  50,00,001- Rs.  100,00,000	Rs.  1,12,500 + 30% above Rs.  10,00,000	10%	Rs.  12,00,001 - Rs.  15,00,000	Rs.  80,000 + 20% above Rs.  12,00,000	Nil
Rs.  100,00,001- Rs.  200,00,000	Rs.  1,12,500 + 30% above Rs.  10,00,000	15%	Rs.  15,00,001- Rs.  50,00,000	Rs.  1,40,000 + 30% above Rs.  15,00,000	Nil
Rs.  200,00,001- Rs.  500,00,000	Rs.  1,12,500 + 30% above Rs.  10,00,000	25%	Rs.  50,00,001- Rs.  100,00,000	Rs.  1,40,000 + 30% above Rs.  15,00,000	10%
Above Rs.  500,00,000	Rs.  1,12,500 + 30% above Rs.  10,00,000	37%	Rs.  100,00,001- Rs.  200,00,000	Rs.  1,40,000 + 30% above Rs.  15,00,000	15%
			Above Rs.  Rs.  200,00,001	Rs.  1,40,000 + 30% above Rs.  15,00,000	25%

These tax slabs ensure that various entities and individuals are taxed fairly while providing flexibility in choosing their preferred taxation model.

New tax slabs for domestic company for AY 2025-26

The updated income tax rates for domestic companies have been introduced to enhance business growth and economic stability in India. These rates are essential for companies to plan their financial strategies and meet tax obligations effectively.

Condition	Income tax rate (excluding surcharge and cess)
Total Turnover or Gross Receipts during the previous year 2020-21 does not exceed Rs. 400 crores	25%
If opted for Section 115BA	25%
If opted for Section 115BAA	22%
If opted for Section 115BAB	15%
Any other Domestic Company	30%

Income tax rate for foreign company under new income tax regime

Foreign companies operating in India are subject to specific income tax rates, designed to align with international tax standards and promote a favorable investment environment. These rates impact financial planning and compliance for multinational corporations operating in India.

Nature of income	Tax rate
Royalty received from the Government or an Indian concern according to an agreement post-March 31, 1961, but before April 1, 1976; or fees for technical services from an agreement post-February 29, 1964, but before April 1, 1976, approved by the Central Government	50%
Any other income	40%

What are the exemptions/ deductions unavailable under the new tax regime in FY 24-25?

The new tax regime significantly reduced the number of available exemptions and deductions. Nearly 70 out of 100 exemptions were removed, and opting for the new tax slabs means taxpayers must forgo several key deductions, including:

• House Rent Allowance (HRA): Previously deductible under Section 10(13A), no longer available.
• Leave Travel Allowance (LTA): Section 10(5) benefits for travel expenses during leave are no longer applicable.
• Specific allowances: Section 10(14) exemptions, including conveyance and children's education allowance, are discontinued.
• Tax-free perquisites: Food coupons and similar allowances are now taxable.
• Chapter VI A deductions: No deductions under Sections 80C (investments), 80D (medical insurance), 80TTA (savings interest), etc.
• Home loan interest deduction: Interest deductions for self-occupied property under Sections 24(b) and 80EEA are removed.

What exemptions/deductions come under the new tax regime in FY 24-25?

Despite the removal of many deductions, certain exemptions and benefits remain available under the new tax regime:

• NPS contributions by employer: Up to 10% of salary (14% for Central Government employees) is deductible under Section 80CCD(2).
• Standard deduction on rental income: A standard 30% deduction applies to net rental income.
• Home loan interest (Let-out property): Interest paid on loans for let-out properties remains deductible from rental income.
• Transport allowance for Divyang employees: Tax exemption for disabled employees covering daily travel expenses.
• Conveyance allowance: Permissible for official duties.
• Allowances for travel and transfer: Exemptions for expenses related to job-related travel or transfer.
• Daily allowance: Provided for day-to-day expenses when away from the usual place of duty.

These retained benefits provide some relief to taxpayers under the new regime while simplifying tax calculations and compliance.

Deductions: Old tax regime vs. new tax regime (Section 115BAC) for FY 2024-25

The table below outlines the key differences in available deductions between the Old Tax Regime and the New Tax Regime (Section 115BAC) for the financial year 2024-25.

Deduction/ Exemption	Old regime	New regime (Section 115BAC)
Section 80C (Investment in PPF, NSC, Life Insurance Premium, ELSS, etc.)	Available up to Rs. 1.5 lakh	Not available
Section 80D (Health insurance premium)	Available	Not available
Standard Deduction (for salaried individuals)	Rs. 50,000	Rs. 75,000 (FY 2024-25) and Rs. 50,000 (FY 2023-24)
House Rent Allowance (HRA)	Available (based on actuals)	Not available
Leave Travel Allowance (LTA)	Available	Not available
Interest on Housing Loan (Section 24) (for self-occupied property)	Deduction up to Rs. 2 lakh	Not available
Section 80E (Interest on education loan)	Available	Not available
Section 80G (Donations to charitable institutions)	Available	Not available

Benefits and disadvantages of new tax regime

Choosing between India's new and old tax regimes involves weighing their respective advantages and disadvantages against your financial habits, income level, and investment strategy. Here's a breakdown to help guide your decision:

Benefits of the new tax regime:

• Simplified tax process: With fewer deductions and exemptions, the new regime streamlines tax filing, benefiting those overwhelmed by the complexity of the old regime.
• Reduced tax rates: For individuals earning up to Rs. 7 lakhs, the new regime often provides lower tax rates, potentially increasing your net income.
• Tax rebate advantage: Earnings up to Rs. 7 lakhs qualify for a full tax rebate, resulting in zero tax liability under the new regime.
• Enhanced liquidity: The absence of compulsory tax-saving investments increases available cash for other financial purposes.

Drawbacks of the new tax regime:

• Loss of deductions and exemptions: Opting for the new regime means missing out on several key deductions and exemptions (e.g., HRA, LTA), which could raise your taxable income.
• Reduced financial planning flexibility: The elimination of deductions limits opportunities to strategically lower your tax obligations through targeted investments and expenditures.
• Potentially higher taxes for higher earners: Individuals with incomes over Rs. 10 lakhs might find themselves subject to higher taxes under the new regime, especially when including surcharges on incomes above Rs. 5 crores.
• Disadvantages for long-term savers: The new regime may not suit those who depend on tax-saving investments for wealth accumulation, as it excludes these benefits.

How to calculate income tax for income tax slabs for FY 24-25 (AY 2025-26)

To illustrate the process of income tax calculation, let's take the example of Sameera, a salaried individual with an annual income of Rs. 9,00,000. Sameera is eligible for deductions under Section 80C amounting to Rs. 2,00,000. The calculation of her income tax involves a few key steps:

1. Calculating gross taxable income
   • Total annual income: Rs. 9,00,000
   • Less deductions under Section 80C: Rs. 2,00,000
   • Gross taxable income: Rs. 9,00,000 - Rs. 2,00,000 = Rs. 7,00,000
2. Understanding the applicable tax slabs
   The income tax rates for FY 2024-25 are structured as follows:
   • Up to Rs. 2,50,000: 0% (no tax)
   • Rs. 2,50,001 to Rs. 5,00,000: 5%
   • Rs. 5,00,001 to Rs. 10,00,000: 20%
   • Above Rs. 10,00,000: 30%
3. Calculating the income tax
   • The first Rs. 2,50,000 of her income is tax-free.
   • The next Rs. 2,50,000 (from Rs. 2,50,001 to Rs. 5,00,000) is taxed at 5%, resulting in a tax of Rs. 12,500.
   • The remaining Rs. 2,00,000 (from Rs. 5,00,001 to Rs. 7,00,000) is taxed at 20%, amounting to Rs. 40,000.
   • Total tax liability: Rs. 12,500 + Rs. 40,000 = Rs. 52,500.
4. Consideration of surcharge and rebate
   • Since Sameera's income does not exceed Rs. 50 lakhs, no surcharge applies.
   • She is not eligible for the Section 87A rebate, as her taxable income is above Rs. 5,00,000.

Thus, Sameera’s total income tax liability amounts to Rs. 52,500.

How to calculate income tax liability under the old tax regime?

Calculating income tax liability under the old tax regime involves understanding the income tax slabs, deductions, and exemptions applicable for the financial year. The old tax regime allows taxpayers to claim various deductions, such as those under Section 80C, HRA, and standard deductions, which help reduce the taxable income. Here’s a step-by-step guide:

1. Determine gross total income
   • Sum all income sources, including salary, house property, capital gains, business or profession, and other sources like interest income.
2. Apply deductions and exemptions
   • Claim deductions under Section 80C (investments in ELSS, PPF, etc.), Section 80D (medical insurance), and others.
   • Common exemptions include House Rent Allowance (HRA), Leave Travel Allowance (LTA), and the standard deduction of Rs. 50,000.
   • Subtract these from the gross total income to calculate the net taxable income.
3. Identify the applicable tax slabs
   • The old tax regime has different slabs based on the taxpayer’s age group:
     • Individuals below 60 years
     • Senior citizens (60-79 years)
     • Super senior citizens (80 years and above)

By applying the appropriate tax rates and deductions, taxpayers can determine their tax liability under the old regime effectively.Tax slab 2025 vs 2024

Tax slab for FY 2024-25	Tax slab for FY 2025-26	Tax rate
Up to Rs. 3 lakh	Up to Rs. 4 lakh	Nil
Rs. 3 lakh - Rs. 7 lakh	Rs. 4 lakh - Rs. 8 lakh	5%
Rs. 7 lakh - Rs. 10 lakh	Rs. 8 lakh - Rs. 12 lakh	10%
Rs. 10 lakh - Rs. 12 lakh	Rs. 12 lakh - Rs. 16 lakh	15%
Rs. 12 lakh - Rs. 15 lakh	Rs. 16 lakh - Rs. 20 lakh	20%
-	Rs. 20 lakh - Rs. 24 lakh	25%
More than Rs. 15 lakh	More than Rs. 24 lakh	30%

Income tax is a direct tax that you pay to the government. It is calculated as a percentage of your annual earnings and is used by the government to fund infrastructural development, pay public sector employees, finance public healthcare and defence departments, and so on. The Central Board of Direct Taxes (CBDT), a body responsible for managing taxes, levies taxes on individuals via a slab-based system. As per this, every taxpayer is liable to pay tax based on the income tax slab they fall under, at the rate prescribed by the government for each slab.

The income tax rates are progressive in nature, which means that they increase with an increase in your income. Further, the tax slabs in India can change over time depending on the announcements made during the Union Budget or via economic policy declarations. Therefore, it is important that you keep an eye on current developments to be aware of new income tax slabs, if any. To understand the concept of income tax slabs better, start by reading who is liable to pay income tax in India.

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

Income Tax Slabs in Budget 2024

Tax Slab for FY 2024	Tax Rate
Up to Rs. 3 lakh	Nil
Rs. 3 lakh - Rs. 7 lakh	5%
Rs. 7 lakh - Rs. 10 lakh	10%
Rs. 10 lakh - Rs. 12 lakh	15%
Rs. 12 lakh - Rs. 15 lakh	20%
More than Rs. 15 lakh	30%

Income Tax Slab for Old Tax Regime

Income Slab	Old Tax Regime
Rs. 0 - Rs. 2,50,000	-
Rs. 2,50,000 - Rs. 5,00,000	5%
Rs. 5,00,000 - Rs. 10,00,000	20%
>Rs. 10,00,000	30%

 

Old Tax vs New Tax Regime 2024

Tax Slab	Old Tax Regime	New Tax Regime FY 2023	New Tax Regime FY 2024
Under 250000	-	-	-
250000 - 300000	5%	-	-
300000 - 500000	5%	5%	5%
500000 - 600000	20%	5%	5%
600000 - 700000	20%	10%	5%
700000 - 900000	20%	10%	10%
900000 - 1000000	20%	15%	10%
1000000 - 1200000	30%	15%	15%
1200000 - 1500000	30%	20%	20%
More Than 1,500,000	30%	30%	30%

Tax Rates for HUFs (Resident or Non-Resident)

Old Tax Regime 2023		New Tax Regime 2024
Income Tax Slab	Income Tax Rate	Income Tax Slab	Income Tax Rate
Up to Rs.  2,50,000	Nil	Up to Rs.  3,00,000	Nil
Rs.  2,50,001 - Rs.  5,00,000	5% above Rs.  2,50,000	Rs.  3,00,001 - Rs.  6,00,000	5% above Rs.  3,00,000
Rs.  5,00,001 - Rs.  10,00,000	Rs.  12,500 + 20% above Rs.  5,00,000	Rs.  6,00,001 - Rs.  9,00,000	Rs.  15,000 + 10% above Rs.  6,00,000
Above Rs.  10,00,000	Rs.  1,12,500 + 30% above Rs.  10,00,000	Rs.  9,00,001 - Rs.  12,00,000	Rs.  45,000 + 15% above Rs.  9,00,000
		Rs.  12,00,001 - Rs.  15,00,000	Rs.  90,000 + 20% above Rs.  12,00,000
		Above Rs.  15,00,000	Rs.  1,50,000 + 30% above Rs.  15,00,000

Additionally, the budget of 2024 has raised the limit for standard deductions from Rs. 50,000 to Rs. 75,000 under the new tax regime. This change is designed to provide additional financial relief to taxpayers.

Income Tax Rates of AOP / BOI / AJP

Old Tax Regime 2023		New Tax Regime 2024
Income Tax Slab	Income Tax Rate	Income Tax Slab	Income Tax Rate
Up to Rs.  3,00,000	Nil	Up to Rs.  3,00,000	Nil
Rs.  3,00,001 - Rs.  5,00,000	5% above Rs.  3,00,000	Rs.  3,00,001 - Rs.  6,00,000	5% above Rs.  3,00,000
Rs.  5,00,001 - Rs.  10,00,000	Rs.  10,000 + 20% above Rs.  5,00,000	Rs.  6,00,001 - Rs.  9,00,000	Rs.  15,000 + 10% above Rs.  6,00,000
Above Rs.  10,00,000	Rs.  1,10,000 + 30% above Rs.  10,00,000	Rs.  9,00,001 - Rs.  12,00,000	Rs.  45,000 + 15% above Rs.  9,00,000
		Rs.  12,00,001 - Rs.  15,00,000	Rs.  90,000 + 20% above Rs.  12,00,000
		Above Rs.  15,00,000	Rs.  1,50,000 + 30% above Rs.  15,00,000

Income Tax Rate for a Domestic Company

Condition	Income Tax Rate (excluding surcharge and cess)
Total Turnover or Gross Receipts during the previous year 2020-21 does not exceed Rs.  400 crores	25%
If opted for Section 115BA	25%
If opted for Section 115BAA	22%
If opted for Section 115BAB	15%
Any other Domestic Company	30%

New income tax slabs for FY 2024 for Senior Citizens

Below is the new income tax slabs for individuals between 60 and 80 years (senior citizens):

Income Tax Slab	Income Tax Rate
Up to Rs.  3,00,000	Nill
Rs.  3,00,001 - Rs.  6,00,000	5% above Rs.  3,00,000
Rs.  6,00,001 - Rs.  9,00,000	Rs.  15,000 + 10% above Rs.  6,00,000
Rs.  9,00,001 - Rs.  12,00,000	Rs.  45,000 + 15% above Rs.  9,00,000
Rs.  12,00,001 - Rs.  15,00,000	Rs.  90,000 + 20% above Rs.  12,00,000
Above Rs.  15,00,000	Rs.  1,50,000 + 30% above Rs.  15,00,000

New income tax slabs for FY 2024 for Super Senior Citizens

Below are the new income tax slabs for individuals above 80 years (super senior citizens):

Income Tax Slab	Income Tax Rate
Up to Rs.  3,00,000	Nill
Rs.  3,00,001 - Rs.  6,00,000	5% above Rs.  3,00,000
Rs.  6,00,001 - Rs. 9,00,000Rs.	Rs.  15,000 + 10% above Rs. 6,00,000
Rs.  9,00,001 - Rs.  12,00,000	Rs.  45,000 + 15% above Rs. 9,00,000
Rs.  12,00,001 - Rs.  15,00,000	Rs.  90,000 + 20% above Rs.  12,00,000
Above Rs.  15,00,000	Rs.  1,50,000 + 30% above Rs.  15,00,000

Heads of Income for Tax Purposes

For individual taxpayers, income is categorised into five slabs based on its source. These five categories are as follows.

• Salary Income: Monthly salary and pension
• Profits or Gains from Profession and Business: Income earned by self-employed individuals, businessmen, freelancers, contractors, professionals and life insurance agents
• Income from House Property: Rental income
• Capital Gains: Gains from selling a residential property, mutual fund units or shares
• Income from Other Sources: Interest earned from a savings account or a fixed deposit, lottery, etc.

To arrive at your total taxable income for a financial year, you are required to declare all income that you earn under various heads and then subtract any tax deductions that you are eligible for. Post this, you can calculate the total tax payable for the year by identifying the rate applicable to you using Bajaj Finserv income tax calculator. If the total tax that you pay for a financial year exceeds your tax liability, you can file for an income tax refund online. However, to do this, you are required to e-file your income tax return. To do so with ease, remember the following important dates.

• 31st January: Last date to declare investments and submit proof of the same
• 31st March: Last date to invest in vehicles that offer a deduction under Section 80C
• 31st July: Last date for income tax filing. As per a recent update, the last date to file ITR for FY 2018–2019 has been extended 31 August 2019
• From October to November: Verifying your income tax return as per slab
  

Income tax surcharge rate and marginal relief – Latest rates

As per the Income Tax Act, if your income falls into the higher tax brackets (particularly the 30% bracket), you have to pay an additional tax called “surcharge” on top of your regular income tax.

This surcharge is applied when your total taxable income crosses specific thresholds. However, to provide relief in borderline cases (where income slightly exceeds the limit), marginal relief is available.

Please note that the rates of surcharge are different under the old and new tax regimes, and also vary for individuals, companies, firms, and others. Let’s understand how:

Surcharge rates for different taxpayers (current rates)

Before 1st April 2023, individuals under the new tax regime who earned incomes above Rs. 5 crore had to pay a surcharge of 37% on their income tax amount.

But from 1st April 2023, the government has reduced the maximum surcharge rate from 37% to 25% (only under the new tax regime).

For more clarity, let’s check out the different surcharge rates for multiple categories of taxpayers:

Surcharge rates for Individuals / HUF / AOP / BOI / Artificial Juridical Persons

Net taxable income	Surcharge (old tax regime)	Surcharge (new tax regime)
Less than Rs. 50 lakhs	Nil	Nil
Rs. 50 lakhs – Rs. 1 crore	10%	10%
Rs. 1 crore – Rs. 2 crore	15%	15%
Rs. 2 crore – Rs. 5 crore	25%	25%
Above Rs. 5 crore	37%	25% (Reduced from 37%)

Notes:

• For AOPs (Association of Persons) with only companies as members, surcharge is 15% if the income exceeds Rs. 1 crore.

• For long-term capital gains (LTCG) from listed shares, mutual funds, etc., the surcharge is capped at 15%.

Surcharge rates for domestic company

Net taxable income	Normal provisions	Under Section 115BAA/ 115BAB
Less than Rs. 1 crore	Nil	10%
Rs. 1 crore – Rs. 10 crore	7%	10%
Above Rs. 10 crore	12%	10%

Note:

• Under Sections 115BAA and 115BAB, surcharge is always 10% (regardless of income).

• No threshold is provided for marginal relief under these sections.

Surcharge rates for foreign company

Net taxable income	Surcharge rate
Rs. 1 crore – Rs. 10 crore	2%
Above Rs. 10 crore	5%

 

Marginal relief for individuals

Marginal relief is a benefit given to taxpayers whose income slightly exceeds the surcharge threshold. Without this relief, such taxpayers would have to pay more tax than the additional income they earned. Let’s understand the associated rules through two cases:

Case 1: Income more than Rs. 50 Lakhs but less than or equal to Rs. 1 Crore

In this case, the taxpayer will be levied a surcharge rate of 10% on the tax amount. As per the current rules,

• If the additional tax (including surcharge) on income above Rs. 50 lakhs is more than

• The income exceeding Rs. 50 lakhs, the taxpayer gets relief for the excess.

Let’s understand better through an example:

Particulars	Amount
Total income	Rs. 51,00,000
Tax payable (including 10% surcharge) [B]	Rs. 14,76,750
Tax if income was Rs. 50,00,000 [C]	Rs. 13,12,500
Extra income earned (Rs. 51,00,000 - Rs. 50,00,000)	Rs. 1,00,000
Extra tax payable [B] - [C]	Rs. 1,64,250
Marginal relief (Rs. 1,64,250 - Rs. 1,00,000)	Rs. 64,250
Final tax liability (excluding cess) (Rs. 14,76,750 - Rs. 64,250)	Rs. 14,12,500

It can be observed that due to the marginal relief, the person is taxed only Rs. 1,00,000 more for earning Rs. 1,00,000 more. The excess Rs. 64,250 is reduced.

Case 2: Income is more than Rs. 1 Crore but less than or equal to Rs. 2 Crore

In this case, the taxpayer will be levied a surcharge rate of 15% on the tax amount. The condition for offering marginal relief is similar to Case 1. However, the excess tax should not be more than the income exceeding Rs. 1 crore.

Again, let’s gain more clarity through an example:

Particulars	Amount
Total income	Rs. 1,01,00,000
Tax payable (including 15% surcharge) [B]	Rs. 32,68,875
Tax if income was Rs. 1,00,00,000 [C]	Rs. 30,93,750
Extra income earned (Rs. 1,01,00,000 - Rs. 1,00,00,000)	Rs. 1,00,000
Extra tax payable [B] - [C]	Rs. 1,75,125
Marginal relief (Rs. 1,75,125 - Rs. 1,00,000)	Rs. 75,125
Final tax liability (excluding cess)	Rs. 31,93,750

You can again observe that on an additional income of Rs. 1,00,000, the extra tax payable was Rs. 1,75,125. However, due to marginal relief of Rs. 75,125, the tax payable remains restricted to the additional income earned (i.e. Rs. 1,00,000).

Marginal relief for Firms/LLP/Local Authorities

The applicable surcharge rate is 12% if the income exceeds Rs. 1 crore. If we talk about marginal relief, tax (including surcharge) on income above Rs. 1 crore should not be more than the tax on Rs. 1 crore + excess income.

Let’s understand better through an example:

Particulars	Amount
Total income	Rs. 1,01,00,000
Tax payable (including 12% surcharge) [B]	Rs. 32,24,000
Tax if income was Rs. 1,00,00,000 [C]	Rs. 31,20,000
Extra income earned (Rs. 1,01,00,000 - Rs. 1,00,00,000)	Rs. 1,00,000
Extra tax payable [B] - [C]	Rs. 1,04,000
Marginal relief (Rs. 1,04,000 - Rs. 1,00,000)	Rs. 4,000
Final tax liability (excluding cess)	Rs. 32,20,000

 

Marginal relief for companies

Firstly, check out the income range and corresponding surcharge rates applicable to both domestic and foreign companies:

Income range	Surcharge rate for domestic companies	Surcharge rate for foreign companies
Rs. 1 crore to Rs. 10 crore	7%	2%
More than Rs. 10 crore	12%	5%

Now, please note that for both domestic and foreign companies, marginal relief is allowed so that:

• Tax (including surcharge) on higher income

should not be more than the

• Tax payable on threshold income (Rs. 1 crore or Rs. 10 crore) plus the extra income earned beyond that threshold

How to know which income tax slab you fall in

To identify which income tax slab you fall under, you must first calculate your taxable income. This is the amount on which tax will actually be charged. Please note that your taxable income depends on:

• Your total income and

• The tax deductions and exemptions you can claim

To know the slabs applicable to you, follow these simple steps:

Step 1: Know your gross total income

This is the sum of all your income from different sources, such as:

• Salary

• Rental income

• Capital gains

• Interest from savings or fixed deposits

• Dividends received

• Any other income

Step 2: Choose between the old and new tax regime

As a taxpayer, you can choose either the old tax regime or the new tax regime. Each regime has its own tax slabs and rules:

• The old tax regime allows you to claim various deductions and exemptions, such as:

  • Section 80C: Up to Rs. 1.5 lakh (e.g., LIC, PPF, ELSS)

  • Section 80TTA: Savings account interest up to Rs. 10,000

  • Section 80CCD(1B): NPS investment up to Rs. 50,000

  • House Rent Allowance (HRA)

  • Leave Travel Allowance (LTA)

  • Standard deduction of Rs. 50,000 from salary or pension

• The new tax regime has lower tax rates but fewer deductions, such as:

  • Standard deduction of Rs. 75,000 for salaried and pensioners and 

  • Deduction under Section 80CCD(2) of up to 14% of basic salary contributed by the employer to NPS

Step 3: Calculate taxable income

• In the old regime, you subtract all eligible exemptions and deductions from your gross total income.

• In the new regime, only the allowed deductions [Rs. 75,000 and 80CCD(2)] are subtracted.
  

Now, for more clarity, let’s study an example:

Say your gross total income computed in step I is Rs. 12,00,000.

Case I: You choose the old regime

• You claimed deductions of Rs. 2,10,000 [80C + 80TTA + 80CCD(1B)]

• Your taxable income is Rs. 9,90,000 (Rs. 12,00,000 – Rs. 2,10,000)
  

Under the old regime, this amount falls in the Rs. 5,00,001 to Rs. 10,00,000 slab, which is taxed at 20% (excluding cess).

Case II: You choose the new regime

• Only deductions of Rs. 75,000 (standard deduction) and 80CCD(2) are allowed.

• If the same deductions are not applicable, your taxable income may remain at or close to Rs. 12,00,000.

• Suppose your employer contributes Rs. 1,20,000 to NPS, and you also get the Rs. 75,000 deduction. Then:

  • The total deductions you can claim are Rs. 1,95,000 (Rs. 1,20,000 + Rs. 95,000)

  • Your taxable income will be Rs. 10,05,000 (Rs. 12,00,000 – Rs. 1,95,000)
    

In this case, your income falls in the Rs. 10,00,001 to Rs. 12,00,000 slab under the new regime, which is taxed at 15%.