Finance Minister Nirmala Sitharaman unveiled the Union Budget 2025-26 on February 1,2025 introducing a revised income tax structure aimed at providing relief to middle-class taxpayers. The new tax regime has been updated, increasing the tax-free income threshold and adjusting tax brackets. These changes are set to take effect from April 1, 2025 (FY 2025-26).
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New Income Tax Slabs, Rates under the new regime after Budget 2025 (FY 2025-26)
| Revised Tax Slabs (₹) | Revised Tax Rate |
| 0 – 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% |
Under the new tax regime, there will be no tax for individuals earning up to Rs 12 lakh annually for FY 2025-26. At present, there is no tax for income of up to Rs 7 lakh for FY 2024-25
Salaried individuals receive a standard deduction of ₹75,000, ensuring zero tax liability for those having income of up to ₹12.75 lakh under the new tax regime.
The announcements in Budget 2025 were primarily focused on the new tax regime, while very few changes were made to the old tax regime.
This won’t impact your tax filing in financial year 2024-25
The new structure will only be relevant for income earned from April 1, 2025, onwards, meaning you will file your returns under the revised slabs in 2026.
For this year’s ITR, taxpayers must follow the existing tax slabs and rates applicable for FY 2024-25. Until March 31, 2025, the existing tax slabs under both the new and old tax regimes remain applicable for ITR filing.
Current Income Tax Slabs for FY 2024-25 under the new tax regime
| Income Range (₹) | Tax Rate |
| 0 – 3,00,000 | Nil |
| 3,00,001 – 7,00,000 | 5% |
| 7,00,001 – 10,00,000 | 10% |
| 10,00,001 – 12,00,000 | 15% |
| 12,00,001 – 15,00,000 | 20% |
| Above 15,00,000 | 30% |
Current Income Tax Slabs for FY 2024-25 under the old tax regime having age less than 60 years
| Income Range (₹) | Tax Rate |
| 0 – 2,50,000 | Nil |
| 2,50,001 – 5,00,000 | 5% |
| 5,00,001 – 10,00,000 | 20% |
| Above 10,00,000 | 30% |
(with exemptions & deductions like 80C, 80D, HRA, etc.)
Additionally, under the old regime, taxpayers can claim various deductions and exemptions, such as:
- ₹1.5 lakh deduction under Section 80C (for PPF, EPF, ELSS, Life Insurance, etc.)
- ₹50,000 standard deduction for salaried individuals
- Health insurance premium under Section 80D
- House Rent Allowance (HRA), Leave Travel Allowance (LTA), and other exemptions.
