New Tax Regime: In the new tax regime, a tax rebate of up to Rs 60,000 will be available, due to which the limit of tax-free income has increased to Rs 12 lakh. At the same time, in the old tax regime, this rebate is only Rs 12,500, due to which only income up to Rs 5 lakh remains tax-free.
New Tax Regime: A lot is going to change from April 1, 2025, till now there was no tax on annual income of Rs 7 lakh, but from April 1, 2025, income up to Rs 12 lakh has become tax free. All this has happened after the implementation of new rules related to income tax. Actually, in the new financial year, the government has increased the income tax slab and made income up to Rs 12 lakh tax free.
Now the question arises that how will the income tax slab work after the introduction of the new income tax law and how much will be the tax deduction on your salary, income from interest and other sources of income. On the very first day of the financial year 2025-26, we are telling you about it in detail, so that you can do savings and other work as per your need.
Income tax slab in the new regime
In the budget speech, Finance Minister Nirmala Sitharaman had made income up to Rs 12 lakh tax free in the new tax regime. In such a situation, those who have chosen the new tax regime want to know how the tax slab will be applied in it, so let us tell you that the biggest slab in the new tax regime is 30 percent, which is applicable on income of Rs 24 lakh.
Tax slab in the new tax regime FY 2025-26
| Income Tax Slab (in Rs) | Income Tax Rate (%) |
| 0-4,00,000 | 0 |
| 4,00,001-8,00,000 | 5 |
| 8,00,001-12,00,000 | 10 |
| 12,00,001-16,00,000 | 15 |
| 16,00,001-20,00,000 | 20 |
| 20,00,001-24,00,000 | 25 |
| 24,00,001 and above | 30 |
Income up to Rs 12 lakh is tax free in the new tax regime
Above we have told you the tax slabs in the new tax regime, but the government had clarified in the budget that there will be no tax on income up to Rs 12 lakh. This will be applicable only if a person opts for the new tax regime in the financial year 2025-26. This does not mean that you do not need to file income tax return (ITR). No tax will have to be paid due to the tax exemption available under section 87A of the Income Tax Act, 1961. If the annual premium does not exceed Rs 2.5 lakh, then the income of ULIP will be tax free under section 10 (10D).
Rebate under section 87A
Now in the new tax regime, tax rebate of up to Rs 60,000 will be available, due to which the limit of tax-free income has increased to Rs 12 lakh. Whereas, in the old tax regime, this rebate is only Rs 12,500, due to which only income up to Rs 5 lakh remains tax-free.
Changes in standard deduction
For the salaried class, the standard deduction has been increased to Rs 75,000 in the new tax regime, taking the total tax-free income to Rs 12.75 lakh. In the old tax regime, it is still Rs 50,000.
Benefit of marginal relief
If a person’s taxable income is a little more than Rs 12 lakh (up to Rs 12.70 lakh), then he will have to pay additional tax only to the extent that his income after paying tax is not less than Rs 12 lakh.
Relief in TDS to senior citizens
The limit of TDS deduction on FD has been increased from Rs 50,000 to Rs 1 lakh. This will benefit those senior citizens who live on the interest received from FD after retirement.
Rent and property relief
The TDS limit for tenants has been increased from Rs 2.4 lakh to Rs 6 lakh. Also, now you can claim nil annual value of two houses.
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