Income Tax Slabs & Rates for FY 2024-25 (AY 2025-26)
Income tax in India works on a slab system, which means your tax rate increases as your income rises. Every year, taxpayers get to decide between the old and new tax regimes, which significantly affects their financial planning. This guide aims to clarify the income tax slabs for the current assessment year and help you choose the right regime.
What Are Income Tax Slabs?
Income tax slabs assign different tax rates to varying income levels, ensuring those who earn more pay higher taxes. These slabs are periodically updated in the annual budget to reflect current economic conditions and government policies.
Income Tax Slabs for AY 2025-26
In the 2023 budget, the government introduced updates to the new tax regime. These changes apply to income earned from April 1, 2023, to March 31, 2025, with distinct categories for:
- Individuals under 60 and non-residents
- Senior citizens (60-80 years)
- Super senior citizens (80+ years)
Budget 2024: No Changes to Tax Slabs
Good news for taxpayers: the Budget 2024 kept income tax slabs unchanged for FY 2024-25. You’ll calculate taxes for AY 2025-26 using the same slabs as last year. Those without business income can switch between the old and new tax regimes annually.
New Tax Regime Slabs for FY 2024-25
Here’s how the new regime’s tax rates break down:
| Income Range | Tax Rate |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,000 – ₹6,00,000 | 5% on income exceeding ₹3,00,000 |
| ₹6,00,000 – ₹9,00,000 | ₹15,000 + 10% on income exceeding ₹6,00,000 |
| ₹9,00,000 – ₹12,00,000 | ₹45,000 + 15% on income exceeding ₹9,00,000 |
| ₹12,00,000 – ₹15,00,000 | ₹90,000 + 20% on income exceeding ₹12,00,000 |
| Above ₹15,00,000 | ₹150,000 + 30% on income exceeding ₹15,00,000 |
Old Tax Regime Slabs for AY 2025-26
Individuals Below 60 Years & HUF:
| Income Range | Tax Rate |
| Up to ₹2.5 lakh | Nil |
| ₹2.5 lakh – ₹5 lakh | 5% |
| ₹5 lakh – ₹10 lakh | 20% |
| Above ₹10 lakh | 30% |
Senior Citizens (60-80 Years):
| Income Range | Tax Rate |
| Up to ₹3 lakh | Nil |
| ₹3 lakh – ₹5 lakh | 5% |
| ₹5 lakh – ₹10 lakh | 20% |
| Above ₹10 lakh | 30% |
Super Senior Citizens (80+ Years):
| Income Range | Tax Rate |
| Up to ₹5 lakh | Nil |
| ₹5 lakh – ₹10 lakh | 20% |
| Above ₹10 lakh | 30% |
New ‘Pay Later’ Feature for Tax Filing
The Income Tax e-filing portal now offers a convenient ‘Pay Later’ option, allowing you to complete your filing before making tax payments.
Comparison of Tax Rates under the New tax regime & Old tax regime for AY 2025-26
| Slabs | Old Tax Regime | |||
| <60 years & NRIs | >60 to <80 years | > 80 years | FY 2024-25 | |
| ₹0 – ₹2,50,000 | NIL | NIL | NIL | NIL |
| ₹2,50,000 – ₹3,00,000 | 5% | NIL | NIL | NIL |
| ₹3,00,000 – ₹5,00,000 | 5% | 5% (tax rebate u/s 87A is available) | NIL | 5% |
| ₹5,00,000 – ₹6,00,000 | 20% | 20% | 20% | 5% |
| ₹6,00,000 – ₹7,50,000 | 20% | 20% | 20% | 10% |
| ₹7,50,000 – ₹9,00,000 | 20% | 20% | 20% | 10% |
| ₹9,00,000 – ₹10,00,000 | 20% | 20% | 20% | 15% |
| ₹10,00,000 – ₹12,00,000 | 30% | 30% | 30% | 15% |
| ₹12,00,000 – ₹12,50,000 | 30% | 30% | 30% | 20% |
| ₹12,50,000 – ₹15,00,000 | 30% | 30% | 30% | 20% |
| >₹15,00,000 | 30% | 30% | 30% | 30% |
Comparing Old and New Tax Regimes
| Particulars | Old Tax Regime | New Tax Regime |
| Income level for rebate eligibility | ₹5 lakhs | ₹7 lakhs |
| Standard Deduction | ₹50,000 | ₹50,000 |
| Effective Tax-Free Salary income | ₹5.5 lakhs | ₹7.5 lakhs |
| Rebate u/s 87A | ₹12,500 | ₹25,000 |
| HRA Exemption | Available | Not Available |
| Leave Travel Allowance (LTA) | Available | Not Available |
| Other allowances (including food allowance) | Available | Not Available |
| Interest on Home Loan u/s 24b (self-occupied/vacant property) | Available | Not Available |
| Interest on Home Loan u/s 24b (let-out property) | Available | Available |
| Deduction u/s 80C (Investments, tuition fee, etc.) | Available | Not Available |
| Employee’s (own) contribution to NPS | Available | Not Available |
| Employer’s contribution to NPS | Available | Available |
| Medical insurance premium – 80D | Available | Not Available |
| Disabled Individual – 80U | Available | Not Available |
| Interest on education loan – 80E | Available | Not Available |
| Deduction on Family Pension Income | Available | Available |
| Gifts up to ₹50,000 | Available | Available |
| Exemption on voluntary retirement 10(10C) | Available | Available |
| All contributions to Agniveer Corpus Fund – 80CCH | Available | Available |
How to Calculate Income Tax
Let’s take Rahul as an example. His taxable income is ₹7,00,000 after deductions. Here’s tax calculation:
| Income Range | Tax Rate | Tax Amount |
| Up to ₹2,50,000 | Nil | ₹0 |
| ₹2,50,000 – ₹5,00,000 | 5% | ₹12,500 |
| ₹5,00,000 – ₹7,00,000 | 20% | ₹40,000 |
| Total Tax | ₹52,500 | |
| Health & Edu Cess | 4% | ₹2,100 |
| Total Tax Payable | ₹54,600 |
Key Features of the New Tax Regime
- Uniform Rates: Same rates for all taxpayers.
- Rebate for Low-Income: Income up to ₹7 lakh eligible for a rebate.
- Lower Surcharge: Capped at 25% for high earners.
- No Deductions: Exemptions like 80C and 80D aren’t applicable.
Choosing the Right Regime
- Middle-Class Taxpayers: The new regime may suit those with fewer investments.
- High-Income Earners: The old regime could be better for those with significant deductions.
- Timing: Salaried individuals can decide at the start of the financial year, while business owners can switch only once in a lifetime.
Understanding these slabs and selecting the appropriate regime can help you manage your taxes more efficiently.
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