Finance Minister Nirmala Sitharaman has introduced revised income tax slabs under the new tax regime in the Union Budget 2025. These changes will take effect from April 1, 2025, for the financial year 2025-26. 

When compared to the existing tax slabs for FY 2024-25, the new structure of tax brackets 2025 provides additional tax relief, making the new regime more appealing to taxpayers. The tax exemption limit, including the standard deduction and rebate u/s 87A, has also been raised to ₹12.75 lakh, offering greater benefits for salaried individuals.

New Tax Regime Slab Rates for FY 2025-26

The government has introduced revised income tax slabs under the new tax regime for FY 2025-26, aimed at providing significant tax relief to the middle class and increasing their disposable income. The updated tax brackets 2025 structure against the existing tax regime slab is as follows:  

Income Tax Slabs for FY 2024-25 Under New Regime

Here’s a summary of the income tax brackets for FY 2024-25 under the new regime:

Comparison of Tax Payable Under the Revised Income Tax Slabs 

The revised income tax brackets 2025 under the Union Budget 2025 offer significant benefits, but it is crucial to understand its impact on individuals earning just above ₹12 lakh. Will they experience a disproportionately higher tax burden compared to those earning slightly below this threshold? 

For example, does someone earning ₹12,10,000 end up paying ₹61,500 in taxes while another person earning ₹12,00,000 pays nothing? Let us break down the tax calculations on different annual incomes based on the 2025 tax brackets against the existing new tax regime 2024-25: 

• Tax on ₹15 lakh income

• • Applicable Tax on New Regime 2025-26

The tax will be applicable on a taxable income of ₹14,25,000 (After deducting the standard deduction of ₹75,000 under the old tax regime slab from ₹15,00,000).

• • Applicable Tax on the Existing New Regime 2024-25

The tax will be applicable on a taxable income of ₹14,50,000 (After deducting the standard deduction of ₹50,000 under the old tax regime from ₹15,00,000).

The revised tax slabs would help you save up to ₹36,250. 

• Tax on ₹20 lakh income

• • Applicable Tax on New Regime 2025-26

The tax will be applicable on a taxable income of ₹19,25,000 (After deducting the standard deduction of ₹75,000 under the old tax regime from ₹20,00,000).

• • Applicable Tax on the Existing New Regime 2024-25

The tax will be applicable on a taxable income of ₹19,50,000 (After deducting the standard deduction of ₹75,000 under the old tax regime from ₹20,00,000).

The revised tax slabs would help you save up to ₹90,000. 

• Tax on ₹25 lakh income

• • Applicable Tax on New Regime 2025-26

The tax will be applicable on a taxable income of ₹24,25,000 (After deducting the standard deduction of ₹75,000 under the old tax regime from ₹25,00,000).

• • Applicable Tax on the Existing New Regime 2024-25

The tax will be applicable on a taxable income of ₹24,50,000 (After deducting the standard deduction of ₹75,000 under the old tax regime from ₹25,00,000).

The revised tax slabs would help you save up to ₹1,17,500.

• Tax on ₹30 lakh income

• • Applicable Tax on New Regime 2025-26

The tax will be applicable on a taxable income of ₹29,25,000 (After deducting the standard deduction of ₹75,000 under the old tax regime from ₹30,00,000).

• • Applicable Tax on the Existing New Regime 2024-25

The tax will be applicable on a taxable income of ₹29,50,000 (After deducting the standard deduction of ₹50,000 under the old tax regime from ₹30,00,000).

The revised tax slabs would help you save up to ₹1,17,500.

• Tax on ₹35 lakh income

• • Applicable Tax on New Regime 2025-26

The tax will be applicable on a taxable income of ₹34,25,000 (After deducting the standard deduction of ₹75,000 under the old tax regime from ₹35,00,000).

• • Applicable Tax on the Existing New Regime 2024-25

The tax will be applicable on a taxable income of ₹34,50,000 (After deducting the standard deduction of ₹50,000 under the old tax regime from ₹35,00,000).

The revised tax slabs would help you save up to ₹1,17,500

• Tax on ₹40 lakh income

• • Applicable Tax on New Regime 2025-26

The tax will be applicable on a taxable income of ₹39,25,000 (After deducting the standard deduction of ₹75,000 under the old tax regime from ₹40,00,000).

• • Applicable Tax on the Existing New Regime 2024-25

The tax will be applicable on a taxable income of ₹39,50,000 (After deducting the standard deduction of ₹50,000 under the old tax regime from ₹40,00,000).

The revised tax slabs would help you save up to ₹1,17,500.

• Tax Rates in 2025 on ₹45 lakh income

• • Applicable Tax on New Regime 2025-26

The tax will be applicable on a taxable income of ₹44,25,000 (After deducting the standard deduction of ₹75,000 under the old tax regime from ₹45,00,000).

• • Applicable Tax on the Existing New Regime 2024-25

The tax will be applicable on a taxable income of ₹44,50,000 (After deducting the standard deduction of ₹50,000 under the old tax regime from ₹45,00,000).

The revised tax slabs would help you save up to ₹1,17,500.

• Tax Rates in 2025 on ₹50 lakh income

• • Applicable Tax on New Regime 2025-26

The tax will be applicable on a taxable income of ₹49,25,000 (After deducting the standard deduction of ₹75,000 under the old tax regime from ₹50,00,000).

• • Applicable Tax on the Existing New Regime 2024-25

The tax will be applicable on a taxable income of ₹49,50,000 (After deducting the standard deduction of ₹50,000 under the old tax regime from ₹50,00,000).

The revised tax slabs would help you save up to ₹1,17,500.

Other Income Tax Changes Introduced in Budget 2025

Finance Minister Nirmala Sitharaman, in the Union Budget 2025, introduced several key changes to the income tax framework, benefiting taxpayers across different income brackets. These updates, effective from financial year (FY) 2025-26, include improved tax brackets 2025, higher tax rebates, increased TDS thresholds, and enhanced savings under the new tax regime. Here is a detailed breakdown of the major tax changes: 

• Higher Tax Rebate Under Section 87A

To provide greater tax relief, the government has raised the Section 87A rebate threshold from ₹7 lakh to ₹12 lakh. Additionally, the maximum rebate amount has been increased from ₹25,000 to ₹60,000. However, this rebate does not apply to special-rate incomes under the default tax regime.  

• Individuals earning up to ₹12.75 lakh will pay zero tax after availing the rebate and standard deduction of ₹75,000. 
• This move significantly benefits the middle class, reducing the tax burden on salaried and self-employed individuals.  

• Increased TDS Thresholds

The threshold for Tax Deducted at Source (TDS) on rent has been raised from ₹2.4 lakh to ₹6 lakh per year.  The monthly rental limit before TDS applies has now been increased from ₹20,000 to ₹50,000.  

Also, the budget has doubled the tax deduction limit on interest income for senior citizens from ₹50,000 to ₹1,00,000. This change ensures higher tax-free earnings for retirees, improving their financial security.  

• Increased TCS Limit on Foreign Remittances

The government has revised the Tax Collected at Source (TCS) limit under the RBI’s Liberalised Remittance Scheme (LRS). The threshold for TCS on remittances has been increased from ₹7 lakh to ₹10 lakh. Additionally, relief has been provided for remittances related to education expenses when funded through a loan from a specified financial institution.  

Tax Savings under New Tax Regime 2025-26

With the revised tax slabs and higher rebates, taxpayers stand to save significantly under the new tax regime. Below is a comparison of tax liabilities under the previous and new tax rates in 2025: 

The Budget 2025 aims to simplify taxation, encourage compliance, and provide more savings for middle-class taxpayers with improved tax brackets 2025, higher disposable income, and relief for senior citizens and renters.  

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