Income Threshold assessment year 2025

For the Assessment Year (AY) 2025-26, corresponding to the Financial Year (FY) 2024-25, the Indian government has introduced significant changes to the income tax slabs under the new tax regime, aiming to provide substantial relief to taxpayers.
Reuters
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www.bajajfinserv.in
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The Economic Times
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???? Income Tax Slabs for AY 2025-26 (FY 2024-25)
Under the New Tax Regime
The new tax regime is now the default system, offering lower tax rates with limited exemptions. The revised income tax slabs are as follows:
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Reuters
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Reuters
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Wikipedia
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The Economic Times
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Income Range (₹) Tax Rate (%)
Up to 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
Above 24,00,000 30

Additionally, a standard deduction of ₹75,000 is available, effectively increasing the tax-free income limit to ₹12.75 lakh for salaried individuals. The rebate under Section 87A has been enhanced to ₹60,000, providing further relief to taxpayers with income up to ₹12 lakh. These changes aim to reduce the tax burden and increase disposable income for the middle class .
The Economic Times
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www.bajajfinserv.in
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Wikipedia
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The Economic Times
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www.bajajfinserv.in
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Under the Old Tax Regime
Taxpayers can still opt for the old tax regime, which allows for various exemptions and deductions. The income tax slabs under this regime are:
The Economic Times
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Reuters
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The Economic Times
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www.bajajfinserv.in
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The Economic Times
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The Economic Times
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Income Range (₹) Tax Rate (%)
Up to 2,50,000 0
2,50,001 – 5,00,000 5
5,00,001 – 10,00,000 20
Above 10,00,000 30

The old tax regime may be beneficial for individuals who have significant deductions and exemptions, such as those under Section 80C, 80D, or housing loan interest.

???? Key Highlights
Increased Tax-Free Limit: The tax-free income limit has been raised to ₹12 lakh under the new tax regime, with an effective limit of ₹12.75 lakh for salaried individuals due to the standard deduction.

Enhanced Rebate: Section 87A rebate has been increased to ₹60,000, providing additional relief to taxpayers with income up to ₹12 lakh.

Standard Deduction: A standard deduction of ₹75,000 is available under the new tax regime, reducing the taxable income.

Simplification: The new tax regime offers a simplified tax structure with reduced rates and fewer exemptions, aiming to encourage compliance and ease of filing