In a groundbreaking move aimed at easing the tax burden on middle-class taxpayers, Finance Minister Nirmala Sitharaman has unveiled significant changes to the Income Tax slabs under the New Tax Regime. These reforms are poised to provide substantial relief and increase disposable income for millions of taxpayers across India.
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No Income Tax for Earnings up to ₹12 Lakh Individuals earning up to ₹12 lakh annually will no longer be liable to pay income tax, ensuring a greater take-home salary for the middle-income group.
Revised Tax Slabs under the New Tax Regime, The government has introduced a new set of tax slabs, making taxation more progressive and taxpayer-friendly. These changes aim to simplify the tax structure while ensuring optimal benefits for salaried individuals.
Enhanced Rebate Under Section 87A The rebate under Section 87A has been increased to ₹60,000, a significant jump from the previous ₹20,000. This move directly benefits taxpayers by reducing their overall liability and improving financial flexibility.
Impact on Taxpayers With the widened tax slabs and improved incentives, many taxpayers who previously preferred the Old Tax Regime may now find the New Tax Regime more beneficial. The shift will not only reduce their tax liabilities but also simplify their filing process, eliminating the need for extensive documentation and deductions.
What This Means for You
These revisions will result in increased savings for taxpayers, allowing them to allocate funds toward investments, household expenses, and personal financial goals. The changes reinforce the government’s commitment to simplifying taxation and making the New Tax Regime more attractive for individuals.
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Revised Tax Slabs under the New Tax Regime
The Tax Slab for 2025-26
| No Income Tax if income is below 12 Lakh | ||
|---|---|---|
| From | Up to | Rate |
| ₹0 | ₹4,00,000 | NIL |
| ₹4,00,000 | ₹8,00,000 | 5% |
| ₹8,00,000 | ₹12,00,000 | 10% |
| ₹12,00,000 | ₹16,00,000 | 15% |
| ₹16,00,000 | ₹20,00,000 | 20% |
| ₹20,00,000 | ₹24,00,000 | 25% |
| ₹24,00,000 | ₹99,99,99,999 | 30% |
The Tax Slab for 2024-25
| No Income Tax if income is below 7 Lakh | ||
|---|---|---|
| From | Up to | Rate |
| ₹0 | ₹3,00,000 | NIL |
| ₹3,00,000 | ₹7,00,000 | 5% |
| ₹7,00,000 | ₹10,00,000 | 10% |
| ₹10,00,000 | ₹12,00,000 | 15% |
| ₹12,00,000 | ₹15,00,000 | 20% |
| ₹15,00,000 | ₹99,99,99,999 | 30% |
Tax Comparison for Different Income Levels
| Income | Tax Amount (2025-26) | Tax Amount (2024-25) | Tax Saved (2025) |
|---|---|---|---|
| ₹8,00,000 | No Tax | ₹23,400 | ₹23,400 |
| ₹10,00,000 | No Tax | ₹44,200 | ₹44,200 |
| ₹15,00,000 | ₹97,500 | ₹1,30,000 | ₹32,500 |
| ₹25,00,000 | ₹3,19,800 | ₹4,34,200 | ₹1,14,400 |
Old vs New Tax Regime Comparison
| Income | New Tax Regime (2025-26) | Old Tax Regime (2025-26) | Tax Saved (2025) |
|---|---|---|---|
| ₹7,50,000 | No Tax | ₹54,600 | ₹54,600 |
| ₹10,00,000 | No Tax | ₹1,06,600 | ₹1,06,600 |
| ₹15,00,000 | ₹97,500 | ₹2,57,400 | ₹1,59,900 |
| ₹25,00,000 | ₹3,19,800 | ₹5,69,400 | ₹2,49,600 |
These reforms signify a monumental shift in India’s tax landscape, ushering in a new era of financial relief and simplicity for middle-class taxpayers. As taxpayers navigate these changes, they can look forward to increased savings and a more straightforward tax filing process.
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HRMS, Payroll & Compliance Outsourcing, Tax Management or S&E Registration, do contact us.
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