New Tax Regimes Budget 2025: Here is the key announcement in the Budget 2025 from Finance Minister Nirmala Sitharaman. With this announcement, she stated, “Tax on individual persons with annual income of 12 lakh rupee and below will be zero.” This new tax slab will be valid under the new tax regime and will be applicable from FY 2025-26 (AY 2026-27).
Important Features of the Revised Tax Regime
As per the new tax regime, Income between 4 lakh rupees to 8 lakh rupees will attract 5% tax. Earlier, this slab was applicable for income between 3 lakh and 7 lakh. New Tax Slab — This income is still tax exempt upto Rs 12 Lakhs under new tax regime. This shift is likely to help taxpayers out tremendously.
Old Vs New Tax Regime: Difference Between Old and New Tax Regime
- In the old tax regime, for income up to 2.5 lakh rupees one did not have to pay any tax, compared to the new tax regime, the limit for this has now been raised to 3 lakh rupees.
- Even in the new tax system, income above taxable bracket up to 4 lakh rupees and 8 lakh rupees will be taxable at 5% instead of the previous range of 3 lakh rupees and 7 lakh rupees.
- One of the key features of the new tax regime is income up to 12 lakh rupees has been exempted from tax.
What’s in it for Taxpayers?
Taxpayers have a feverish scrutiny on any tax-related announcements in the Budget. With this an important relief is provided by Nirmala Sitharaman by announcing the exemption of tax for 12 lakh rupees per year. This will especially aid the middle class and young professionals.
Advantages of the New Tax Structure
- Less Tax Liability: The tax exemption on income up to 12 lakh rupees will be a boon for taxpayers.
- Less Complicated Tax Structure: The new tax slabs have simplified the tax system.
- Booze Has Just Got Cheaper: One change is particularly beneficial for the middle-income group.
New Tax Regime – New Tax rate FY 2025-26
| Income Tax Slab | Income Tax Rate |
| 0 – Rs 4,00,000 | Nil |
| Rs.4,00,000 to Rs.8,00,000 | 5% |
| Rs 8,00,001 to Rs 12,00,000 | 10% |
| Rs 12,00,001 to Rs 16,00,000 | 15% |
| Rs 16,00,001 to Rs 20,00,000 | 20% |
| Rs 20,00,001 to Rs 24,00,000 | 25% |
| Above Rs 24,00,001 | 30% |
This is the income tax now (FY 2024-25 Old Tax Regime)
The due date for filing income tax returns for the financial year 2024-25 (assessment year 2025-26) is 31 July 2025. Taxpayers would continue to be subject to the same tax slabs and rates in the current financial year as were declared in the previous budget. For general taxpayers and senior citizens, income tax will be levied according to the current applicable tax rates. You can also see how the old tax slabs changed into the new ones.
Income tax slab in new tax regime for taxpayers below 60 years of age – (New Tax Regime Tax Slab FY – 2024-25)
| Income Tax Slab | Income Tax Rate | Surcharge |
| Up to Rs 3,00,000 | Nil | Nil |
| Rs.3,00,000 to Rs.7,00,000 | 5% above Rs.3,00,000 | Nil |
| Rs 7,00,001 to Rs 10,00,000 | Rs 20,000 + 10% above Rs 7,00,000 | Nil |
| Rs 10,00,001 to Rs 12,00,000 | Rs 50,000 + 15% above Rs 10,00,000 | Nil |
| Rs 12,00,001 to Rs 15,00,000 | Rs 80,000 + 20% above Rs 12,00,000 | Nil |
| Rs.15,00,001 to Rs.50,00,000 | Rs.1,40,000 + 30% above Rs.15,00,000 | Nil |
| Rs 50,00,001 to Rs 1,00,00,000 | Rs.1,40,000 + 30% above Rs.15,00,000 | 10% |
| Rs.1,00,00,001 to Rs.2,00,00,000 | Rs.1,40,000 + 30% above Rs.15,00,000 | 15% |
| More than Rs 2,00,00,00 crore | Rs.1,40,000 + 30% above Rs.15,00,000 | 25% |
Income Tax Slab in New Tax Regime for Senior Citizen Taxpayers above 60 years of age – (New Tax Regime Tax Slab FY – 2024-25)
| Income Tax Slab | Income Tax Rate | Surcharge |
| Up to Rs 3,00,000 | Nil | Nil |
| Rs.3,00,000 to Rs.7,00,000 | 5% above Rs.3,00,000 | Nil |
| Rs 7,00,001 to Rs 10,00,000 | Rs 20,000 + 10% above Rs 7,00,000 | Nil |
| Rs 10,00,001 to Rs 12,00,000 | Rs 50,000 + 15% above Rs 10,00,000 | Nil |
| Rs 12,00,001 to Rs 15,00,000 | Rs 80,000 + 20% above Rs 12,00,000 | Nil |
| Rs.15,00,001 to Rs.50,00,000 | Rs.1,40,000 + 30% above Rs.15,00,000 | Nil |
| Rs 50,00,001 to Rs 1,00,00,000 | Rs.1,40,000 + 30% above Rs.15,00,000 | 10% |
| Rs.1,00,00,001 to Rs.2,00,00,000 | Rs.1,40,000 + 30% above Rs.15,00,000 | 15% |
| More than Rs 2,00,00,00 crore | Rs.1,40,000 + 30% above Rs.15,00,000 | 25% |
Income Tax Slab in Old Tax Regime for Taxpayers below 60 years of age – (Old Tax Regime Tax Slab FY – 2024-25)
The government has not made any changes in the old tax regime in this year’s budget. If you file returns in the old tax regime in the financial year 2025-26, then the tax slab given below will be applicable.
| Income Tax Slab | Income Tax Rate | Surcharge |
| Up to Rs 2,52,000 | Nil | Nil |
| Rs 2,50,001 to Rs 5,00,000 | 5% above Rs.2,50,000 | Nil |
| Rs 5,00,001 to Rs 10,00,000 | Rs.12,500 + 20% above Rs.5,00,000 | Nil |
| Rs 10,00,001 to Rs 50,00,000 | Rs.1,12,500 + 30% above Rs.10,00,000 | Nil |
| Rs 50,00,001 to Rs 1,00,00,000 | Rs.1,12,500 + 30% above Rs.10,00,000 | 10% |
| Rs.1,00,00,001 to Rs.2,00,00,000 | Rs.1,12,500 + 30% above Rs.10,00,000 | 15% |
| Rs.2,00,00,001 to Rs.5,00,00,000 | Rs.1,12,500 + 30% above Rs.10,00,000 | 25% |
| Above Rs.5,00,00,000 | Rs.1,12,500 + 30% above Rs.10,00,000 | 37% |
Income Tax Slab in Old Tax Regime for Senior Citizen Taxpayers above 60 years of age – (New Tax Regime Tax Slab FY – 2024-25)
| Income Tax Slab | Income Tax Rate | Surcharge |
| Up to Rs 2,52,000 | Nil | Nil |
| Rs 2,50,001 to Rs 5,00,000 | 5% above Rs.2,50,000 | Nil |
| Rs 5,00,001 to Rs 10,00,000 | Rs.12,500 + 20% above Rs.5,00,000 | Nil |
| Rs 10,00,001 to Rs 50,00,000 | Rs.1,12,500 + 30% above Rs.10,00,000 | Nil |
| Rs 50,00,001 to Rs 1,00,00,000 | Rs.1,12,500 + 30% above Rs.10,00,000 | 10% |
| Rs.1,00,00,001 to Rs.2,00,00,000 | Rs.1,12,500 + 30% above Rs.10,00,000 | 15% |
| Rs.2,00,00,001 to Rs.5,00,00,000 | Rs.1,12,500 + 30% above Rs.10,00,000 | 25% |
| Above Rs.5,00,00,000 | Rs.1,12,500 + 30% above Rs.10,00,000 | 37% |
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