Budget 2025 brought the most significant middle-class relief in years — zero income tax up to ₹12 lakh under the new regime (Section 87A rebate ₹60,000). Salaried employees pay zero tax up to ₹12.75 lakh after the ₹75,000 standard deduction. The new regime is the default from FY 2025-26. This guide covers new & old regime slab rates, senior citizen slabs, FY 2024-25 comparison, and tax calculation examples for common salary levels.
New Regime Slabs — FY 2025-26 (AY 2026-27)
Section 87A Rebate — Zero Tax up to ₹12 Lakh
Tax Calculation Examples — Common Salary Levels
Old Regime Slabs — FY 2025-26 (All Age Groups)
Senior Citizen Slabs — New vs Old Regime
FY 2024-25 (AY 2025-26) Slabs — Budget 2024 Rates
Old vs New Regime Comparison
Surcharge on Income Tax
Deductions NOT Available in New Regime
Deductions Available in New Regime
What is Income Tax Slab?
FAQs on Income Tax Slabs FY 2025-26
An Income Tax Slab is a structured system that determines the tax rate applicable to individuals based on their annual income. India follows a progressive tax system — as income rises, the tax rate increases. For FY 2025-26 (AY 2026-27), the new tax regime is the default. Budget 2025 introduced significantly revised slabs with zero tax up to ₹12 lakh income.
Two Tax Regimes — Your Choice
From FY 2025-26, the new regime applies automatically unless you opt out. Key differences:
New Tax Regime (Default) — Lower slab rates, ₹75,000 standard deduction for salaried, ₹60,000 Section 87A rebate (zero tax up to ₹12 lakh). No HRA, 80C, 80D deductions allowed.
Old Tax Regime (Opt-in) — Higher slab rates, but you can claim all exemptions: HRA, LTA, Section 80C (₹1.5L), 80D, home loan interest (₹2L), etc.
Budget 2025 introduced revised slab rates under the new tax regime. The new regime is now the default regime from FY 2025-26 — you must actively opt for the old regime if you wish to continue with it.
New Regime Slab Rates — FY 2025-26
The following revised slabs apply under the new tax regime (no exemptions/deductions except standard deduction of ₹75,000 for salaried):
| Annual Income | Tax Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹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% |
| Above ₹24,00,000 | 30% |
Budget 2025 significantly raised the Section 87A rebate to provide relief to the middle class.
Rebate Comparison Across Years
| Regime / Year | Income Limit for Rebate | Max Rebate |
|---|---|---|
| Old Regime — FY 2024-25 | Up to ₹5,00,000 | ₹12,500 |
| New Regime — FY 2024-25 | Up to ₹7,00,000 | ₹25,000 |
| New Regime — FY 2025-26 (Budget 2025) | Up to ₹12,00,000 | ₹60,000 |
The old regime slabs remain unchanged from FY 2024-25. Under this regime, you can claim Chapter VI-A deductions (80C, 80D, HRA, etc.) but the basic slab rates are less favourable for most taxpayers.
Old Regime — Individual (Below 60 years)
| Annual Income | Tax Rate |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Old Regime — Senior Citizens (60–80 years)
| Annual Income | Tax Rate |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Old Regime — Super Senior Citizens (Above 80 years)
| Annual Income | Tax Rate |
|---|---|
| Up to ₹5,00,000 | Nil |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Choose based on your deductions. If your total eligible deductions exceed roughly ₹3.75 lakh, the old regime may be better. Otherwise, the new regime is beneficial for most taxpayers.
Quick Comparison
| Feature | Old Regime | New Regime |
|---|---|---|
| Default Regime | No (must opt in) | Yes (from FY 2025-26) |
| Basic Exemption Limit | ₹2.5L / ₹3L / ₹5L (age-based) | ₹4,00,000 |
| Section 87A Rebate | ₹12,500 (income ≤ ₹5L) | ₹60,000 (income ≤ ₹12L) |
| Standard Deduction | ₹50,000 (salaried) | ₹75,000 (salaried) |
| HRA Exemption | Available | Not available |
| 80C Deduction | Up to ₹1.5 lakh | Not available |
| 80D (Health Insurance) | Available | Not available |
| NPS (80CCD(1B)) | ₹50,000 extra deduction | Employer NPS only (14% of salary) |
| Home Loan Interest (24b) | Up to ₹2 lakh | Not available (let-out property allowed) |
Surcharge is levied on the income tax payable (before cess) when income exceeds certain thresholds.
Surcharge Rates
| Total Income | Old Regime | New Regime |
|---|---|---|
| Up to ₹50 lakh | Nil | Nil |
| ₹50 lakh – ₹1 crore | 10% | 10% |
| ₹1 crore – ₹2 crore | 15% | 15% |
| ₹2 crore – ₹5 crore | 25% | 25% |
| Above ₹5 crore | 37% | 25% (capped) |
These benefits continue under the new regime:
Standard deduction of ₹75,000 for salaried employees and pensioners
Employer's contribution to NPS — Section 80CCD(2): up to 14% of salary (central government employees)
Agniveer Corpus Fund — Section 80CCH(2)
Interest income from savings account — Section 80TTA (₹10,000)
Gratuity exemption — Section 10(10)
Leave encashment on retirement — Section 10(10AA)
VRS amount up to ₹5 lakh — Section 10(10C)
Transport allowance for specially-abled employees
Perquisite: interest-free / concessional loans from employer for medical treatment
Capital gains exemptions (Sections 54, 54EC, 54F) — continue to apply
The table below shows the net income tax payable for salaried employees at common gross salary levels under the new tax regime FY 2025-26, after applying the ₹75,000 standard deduction and Section 87A rebate of ₹60,000 (for taxable income ≤ ₹12 lakh).
Net Tax Payable — Salaried Employees (New Regime FY 2025-26)
| Gross Salary (₹) | Taxable Income (after ₹75K std. dedn.) | Tax Before Rebate | 87A Rebate | Net Tax (incl. 4% cess) |
|---|---|---|---|---|
| ₹7,00,000 | ₹6,25,000 | ₹11,250 | ₹11,250 | ₹0 |
| ₹8,00,000 | ₹7,25,000 | ₹16,250 | ₹16,250 | ₹0 |
| ₹10,00,000 | ₹9,25,000 | ₹32,500 | ₹32,500 | ₹0 |
| ₹12,00,000 | ₹11,25,000 | ₹52,500 | ₹52,500 | ₹0 |
| ₹12,75,000 ← zero tax limit | ₹12,00,000 | ₹60,000 | ₹60,000 | ₹0 |
| ₹13,50,000 | ₹12,75,000 | ₹71,250 | Nil (income > ₹12L) | ₹74,100 |
| ₹15,00,000 | ₹14,25,000 | ₹93,750 | Nil | ₹97,500 |
| ₹20,00,000 | ₹19,25,000 | ₹1,85,000 | Nil | ₹1,92,400 |
| ₹25,00,000 | ₹24,25,000 | ₹3,07,500 | Nil | ₹3,19,800 |
| ₹30,00,000 | ₹29,25,000 | ₹4,57,500 | Nil | ₹4,75,800 |
Senior citizens (60–80 years) and super senior citizens (above 80 years) get higher basic exemption limits only under the old regime. The new regime applies the same slabs to all individuals regardless of age.
New Regime — Same Slabs for All Age Groups
Under the new tax regime, there is no age-based differentiation. Senior citizens, super senior citizens, and taxpayers below 60 all use the same slab structure:
| Annual Income | Tax Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹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% |
| Above ₹24,00,000 | 30% |
Old Regime — Age-Based Exemption Limits for Senior Citizens
The old regime gives senior citizens a significantly higher basic exemption — especially relevant if they have significant deductions (80TTB, 80D, etc.):
| Category | Basic Exemption | 5% Slab | 20% Slab | 30% Slab |
|---|---|---|---|---|
| Below 60 years | ₹2,50,000 | ₹2.5L – ₹5L | ₹5L – ₹10L | Above ₹10L |
| Senior Citizens (60–80 years) | ₹3,00,000 | ₹3L – ₹5L | ₹5L – ₹10L | Above ₹10L |
| Super Senior Citizens (Above 80 years) | ₹5,00,000 | N/A | ₹5L – ₹10L | Above ₹10L |
Key Deductions Available Only to Senior Citizens
Section 80TTB — Deduction up to ₹50,000 on interest income (FD, savings, post office) — only for senior citizens under old regime
Section 80D — Higher health insurance premium deduction: ₹50,000 (vs ₹25,000 for non-seniors) under old regime
Section 194P — Senior citizens aged 75+ with only pension and interest income may be exempt from filing ITR if their bank deducts TDS
Section 87A rebate — Available to senior citizens under new regime (income ≤ ₹12L) and old regime (income ≤ ₹5L)
For reference and comparison, here are the income tax slab rates for FY 2024-25 (AY 2025-26) that applied before Budget 2025's revisions. The new regime has changed significantly; the old regime slabs are unchanged.
New Regime — FY 2024-25 (AY 2025-26)
| Annual Income | Tax Rate |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 – ₹6,00,000 | 5% |
| ₹6,00,001 – ₹9,00,000 | 10% |
| ₹9,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
Key Differences: FY 2024-25 vs FY 2025-26 (New Regime)
| Parameter | FY 2024-25 | FY 2025-26 |
|---|---|---|
| Basic exemption limit | ₹3,00,000 | ₹4,00,000 |
| 5% slab | ₹3L – ₹6L | ₹4L – ₹8L |
| Section 87A rebate | ₹25,000 (income ≤ ₹7L) | ₹60,000 (income ≤ ₹12L) |
| Effective zero-tax limit (salaried) | ₹7,75,000 | ₹12,75,000 |
| Standard deduction | ₹75,000 | ₹75,000 (unchanged) |
| Highest slab rate (30%) | Above ₹15,00,000 | Above ₹24,00,000 |
Old Regime — FY 2024-25 (Unchanged in FY 2025-26)
Old regime slab rates remain the same in FY 2025-26 as they were in FY 2024-25:
Below 60 years: Nil up to ₹2.5L · 5% on ₹2.5L–₹5L · 20% on ₹5L–₹10L · 30% above ₹10L
Senior citizens (60–80 yrs): Nil up to ₹3L · 5% on ₹3L–₹5L · 20% on ₹5L–₹10L · 30% above ₹10L
Super senior citizens (80+ yrs): Nil up to ₹5L · 20% on ₹5L–₹10L · 30% above ₹10L
How much income is tax-free under the new regime for FY 2025-26?
Under the new regime for FY 2025-26 (AY 2026-27), individuals with taxable income up to ₹12 lakh pay zero tax due to the enhanced Section 87A rebate of ₹60,000. Salaried employees also get a standard deduction of ₹75,000, making total tax-free income effectively ₹12.75 lakh.
Is the new tax regime mandatory from FY 2025-26?
The new tax regime is the default regime from FY 2025-26. If you wish to use the old regime, you must explicitly opt for it while filing your ITR or by submitting Form 10-IEA (for business income taxpayers). Salaried individuals can inform their employer at the beginning of each financial year.
What is the Section 87A rebate for FY 2025-26?
For FY 2025-26, the Section 87A rebate under the new tax regime is ₹60,000 for individuals with total income up to ₹12 lakh. Under the old regime, the rebate remains ₹12,500 for income up to ₹5 lakh. Note: Section 87A rebate is not available on STCG (short-term capital gains on equity) even if total income is within ₹12 lakh.
Can I claim 80C deductions under the new regime?
No. Under the new tax regime, you cannot claim deductions under Sections 80C (PPF, LIC, ELSS, etc.), 80D (health insurance), HRA, LTA, or home loan interest (self-occupied). You can only claim standard deduction of ₹75,000, employer's NPS contribution, and a few other specified exemptions.
Can I switch between old and new tax regimes every year?
Salaried individuals (with no business income) can switch between the old and new tax regimes every financial year. However, taxpayers with business or professional income can switch only once from the new regime back to the old regime, after which they are locked into the new regime.
Is surcharge applicable under the new tax regime for FY 2025-26?
Yes, surcharge applies under both regimes. For income above ₹50 lakh, surcharge rates are 10% to 25%. Importantly, under the new regime, the maximum surcharge is capped at 25% (even for income above ₹5 crore), unlike the old regime where it goes up to 37%. Health & Education Cess of 4% applies on (tax + surcharge) under both regimes.
Which tax regime is better — old or new for FY 2025-26?
The new regime is generally better if your total deductions under the old regime are less than approximately ₹3.75 lakh. For salaried individuals earning up to ₹12.75 lakh, the new regime results in zero tax. The old regime benefits those with high 80C investments, significant HRA, or home loan interest. Use our Income Tax Calculator to compare both regimes instantly.
What are the income tax slab rates for senior citizens under the new regime FY 2025-26?
Under the new regime, there is no age-based differentiation — the same slabs apply to all individuals regardless of age (below 60, 60–80, or above 80). Senior citizens continue to benefit from age-based slabs only under the old regime (₹3 lakh basic exemption for 60-80 yrs, ₹5 lakh for above 80 yrs).
What were the new tax regime slab rates for FY 2024-25 (AY 2025-26)?
For FY 2024-25 (AY 2025-26), the new regime slabs were: Up to ₹3 lakh — Nil; ₹3–6 lakh — 5%; ₹6–9 lakh — 10%; ₹9–12 lakh — 15%; ₹12–15 lakh — 20%; Above ₹15 lakh — 30%. The Section 87A rebate was ₹25,000 for income up to ₹7 lakh, and standard deduction was ₹75,000 for salaried. Note: FY 2025-26 has significantly revised slabs with zero tax up to ₹12 lakh.
What is the standard deduction for salaried employees under the new tax regime FY 2025-26?
Salaried employees and pensioners are entitled to a standard deduction of ₹75,000 under the new tax regime for FY 2025-26 (AY 2026-27). Under the old tax regime, the standard deduction is ₹50,000. This is available from the salary/pension head and reduces taxable income before tax computation.
What is the income tax rate for income above ₹15 lakh in the new regime FY 2025-26?
For FY 2025-26, the new regime has revised slabs with a maximum rate of 30% for income above ₹24 lakh. For income between ₹15–16 lakh: 15%; ₹16–20 lakh: 20%; ₹20–24 lakh: 25%; Above ₹24 lakh: 30%. These are more granular slabs than the previous year's single 30% slab starting at ₹15 lakh.
What is the income tax slab for AY 2026-27?
For AY 2026-27 (FY 2025-26), the new tax regime slabs are: Up to ₹4 lakh — Nil; ₹4–8 lakh — 5%; ₹8–12 lakh — 10%; ₹12–16 lakh — 15%; ₹16–20 lakh — 20%; ₹20–24 lakh — 25%; Above ₹24 lakh — 30%. With Section 87A rebate of ₹60,000, effective tax is zero for total income up to ₹12 lakh. Salaried persons pay zero tax up to ₹12.75 lakh after standard deduction of ₹75,000.
How much income tax do I pay on ₹15 lakh salary under new regime FY 2025-26?
For a gross salary of ₹15 lakh under the new regime FY 2025-26: After ₹75,000 standard deduction, taxable income = ₹14.25 lakh. Tax: 5% on ₹4L–8L (₹20,000) + 10% on ₹8L–12L (₹40,000) + 15% on ₹12L–14.25L (₹33,750) = ₹93,750. No Section 87A rebate (income > ₹12L). Adding 4% cess: total tax = ₹97,500.
How much income tax on ₹20 lakh per year under new regime?
For ₹20 lakh gross salary under new regime FY 2025-26: Taxable income after ₹75K standard deduction = ₹19.25 lakh. Tax: ₹20,000 (5%) + ₹40,000 (10%) + ₹60,000 (15%) + ₹65,000 (20% on ₹16L–19.25L) = ₹1,85,000. Plus 4% cess = ₹1,92,400 total tax payable.
What is the income tax slab for FY 2024-25 (AY 2025-26) under new regime?
New regime slabs for FY 2024-25 (AY 2025-26): Up to ₹3L — Nil; ₹3–6L — 5%; ₹6–9L — 10%; ₹9–12L — 15%; ₹12–15L — 20%; Above ₹15L — 30%. Section 87A rebate was ₹25,000 for income up to ₹7L. Standard deduction ₹75,000. Budget 2025 significantly improved the FY 2025-26 slabs — zero tax limit moved from ₹7.75L to ₹12.75L for salaried employees.
Is there zero tax for income up to ₹12.75 lakh for salaried employees?
Yes. For salaried employees under the new regime FY 2025-26: ₹12.75 lakh gross salary − ₹75,000 standard deduction = ₹12 lakh taxable income. Tax on ₹12 lakh = ₹60,000. Section 87A rebate = ₹60,000 (income exactly ₹12L qualifies). Net tax = zero. Important: the moment taxable income crosses ₹12 lakh (i.e., gross salary > ₹12.75L), the full 87A rebate is lost — resulting in tax of ₹74,100+ on ₹13.5L gross salary.
What is the income tax rate for senior citizens above 75 years?
Under the new regime, senior citizens above 75 (or any age) use the same slabs: 0% up to ₹4L, 5% on ₹4–8L, 10% on ₹8–12L, etc. Under the old regime, super senior citizens (80+) have a ₹5 lakh basic exemption with 0% up to ₹5L, 20% on ₹5–10L, 30% above ₹10L. Additionally, senior citizens aged 75+ with only pension and interest income may be exempt from filing ITR under Section 194P if their bank deducts TDS correctly.
What is the income tax slab for AY 2025-26 (FY 2024-25)?
For AY 2025-26 (FY 2024-25), new regime slabs: Up to ₹3L — Nil; ₹3–6L — 5%; ₹6–9L — 10%; ₹9–12L — 15%; ₹12–15L — 20%; Above ₹15L — 30%. Old regime slabs (unchanged): Up to ₹2.5L — Nil; ₹2.5–5L — 5%; ₹5–10L — 20%; Above ₹10L — 30%. Section 87A rebate for FY 2024-25: ₹25,000 (new regime, income ≤ ₹7L) or ₹12,500 (old regime, income ≤ ₹5L).
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Salaried employees earning up to ₹12.75 lakh pay zero tax under the new regime (₹75K standard deduction + ₹60K rebate).