New Tax Rates in India 2025 | Income Tax Slabs FY 2025-26

Introduction: Understanding India’s New Tax Rates for 2025

As India continues to grow economically, the government updates tax regulations to streamline collections and offer relief to taxpayers. For the financial year 2025-26 (Assessment Year 2026-27), the government has introduced new income tax slabs and certain modifications to help individuals optimize their tax liability.

This blog post breaks down the new tax rates and slabs in India in 2025, highlights the changes, and explains how you can plan your finances accordingly.

Income Tax Slabs Under the New Regime (FY 2025-26)

Income Range (INR)	Tax Rate (%)
Up to ₹4,00,000	NIL
₹4,00,001 to ₹8,00,000	5%
₹8,00,001 to ₹12,00,000	10%
₹12,00,001 to ₹16,00,000	15%
₹16,00,001 to ₹20,00,000	20%
₹20,00,001 to ₹24,00,000	25%
Above ₹24,00,000	30%

Key Changes Announced in the 2025 Tax Regime

• Raise in Basic Exemption Limit: The tax-free limit is increased to ₹4 lakh, benefiting low-income taxpayers.

• Expanded Tax Brackets: The government extended upper income limits across multiple slabs by ₹1 lakh in key brackets.

• Standard Deduction: Remains at ₹75,000 for salaried individuals.

• NPS Employer Contribution Deduction: Increased to 14% from 10%, encouraging savings for retirement.

• No Change in Surcharge: High-income earners continue to pay surcharges as per existing slabs.

Old Tax Regime Slabs (For Comparison)

Income Range (INR)	Tax Rate (%)
Up to ₹2,50,000	NIL
₹2,50,001 to ₹5,00,000	5%
₹5,00,001 to ₹10,00,000	20%
Above ₹10,00,000	30%

Individuals can still choose between the old tax regime with exemptions or the new tax slabs without exemptions depending on what best suits their financial situation.

Tax Planning Tips for 2025

• Evaluate eligibility for deductions under Section 80C (up to ₹1.5 lakh) even under the new regime.

• Use employer benefits like NPS contributions to maximize tax savings.

• Opt for the new tax regime if you prefer simplified compliance without many exemptions.

• Consider consulting a tax professional for personalized strategies.

FAQ on India’s New Tax Rates 2025

1. What is the new tax-free income limit for FY 2025-26?The basic exemption limit is raised to ₹4 lakh under the new tax regime.

2. Can I switch between the old and new tax regimes?Yes, taxpayers can choose annually depending on which offers better benefits.

3. Are the Standard Deduction and NPS deductions changed in 2025?No change in the standard deduction of ₹75,000; NPS employer contribution deduction increased to 14%.

Conclusion: Stay Updated and Plan Your Taxes Smartly in 2025

Being aware of the new tax slabs and regulations lets you optimize your tax planning and benefit from government incentives. Stay informed to make the most of the FY 2025-26 tax structures and achieve your financial goals seamlessly.

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