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Income Tax Slabs & Rates for FY 2025-26 (New and Old Tax Regimes)

Budget 2025-26 Key Highlights

Here are the changes proposed by Budget 2025, summed up in a table:

Sector Changes by Budget Details
Income Tax  New income tax regime Income up to ₹12 lakh: No tax
₹8-12 lakh: 10%
₹12-16 lakh: 15%
₹16-20 lakh: 20%
₹20-25 lakh: 25%
Above ₹25 lakh: 30%
Tax for salaried taxpayers No income tax payable for income up to ₹12.75 lakh
Tax on income up to ₹4 lakh Nil
TDS on rent Annual limit raised from ₹2.4 lakh to ₹6 lakh
Tax deduction for senior citizens Limit doubled to ₹1 lakh
Start-ups Benefits  Benefits for start-ups will continue for five years from inception
Banking/Insurance Gramin credit score framework To be established for rural India
FDI in insurance sector Limit raised to 100%
Housing Housing fund Allocation of ₹15,000 crore for the completion of one lakh housing units
Agriculture Atmanirbharta in oil seeds Six-year mission launched
Cotton yield improvement Five-year mission initiated
Kisan Credit Card Loan limit increased from ₹3 lakh to ₹5 lakh
Education Atal Tinkering Labs To be established in schools
Broadband internet Provision for government secondary schools
IIT infrastructure Additional infrastructure to increase student capacity; IIT Patna to be expanded
Healthcare Daycare cancer centres To be set up in all district hospitals; 200 centres planned by fiscal 2026
Duty on life-saving drugs Six life-saving drugs to have a 5% duty; 36 drugs exempted from basic customs duty
Growth MSME credit guarantees Coverage raised from ₹5 crore to ₹10 crore
Infrastructure PPP mode projects Three-year projects can be implemented in PPP mode
Interest-free loans ₹1.5 lakh crore allocated for states to implement infrastructure reforms
Regional airports Over 100 new regional airports planned over the next decade
UDAN 2.0 To connect 120 new airports, with a focus on Northeast and Bihar
Excise/Customs Duty Export promotion mission Set up for easier access to export credit
Tariff rates Proposal to remove seven tariff rates, leaving eight remaining
Economy Investment-friendly index To promote competition among states
Fiscal deficit Revised fiscal deficit target set at 4.8% for fiscal year 2025
Capital expenditure Set at ₹10.18 lakh crore
Women's Development Term loan for women entrepreneurs Up to ₹2 crore available for first-time entrepreneurs from SC/ST and backward classes
Rural India Nutritional support For over eight crore children and one crore lactating mothers
Make in India National Manufacturing Mission Provides policy support and monitoring framework
Clean technology manufacturing mission New initiative launched
Nuclear Energy Mission Focused on research and development
Water Management Jal Jeevan Mission Extended until 2028
Technology Centre of Excellence in AI To be established with an allocation of ₹500 crore
EV battery manufacturing Additional capital goods for production
Tourism Visa fee waivers For certain tourist groups

Income Tax Slabs for Individuals for FY 2025-26 (AY 2026-27)

Income Tax Slabs for FY 2025-26 (AY 2026-27) - New Tax Regime

The Union Budget of February 2025 has proposed changes in the income tax slabs of the New Tax Regime, which will be applicable for computing tax from April 1, 2025 onwards. Here are the new tax slabs:

Income Tax Slabs Rate of Taxation
Up to ₹4,00,000 Nil
Between ₹4,00,001 and ₹8,00,000  5% of your total income that exceeds ₹4,00,000 
Between ₹8,00,001 and ₹12,00,000  ₹20,000 + 10% of your total income that exceeds ₹8,00,000 
Between ₹12,00,001 and ₹16,00,000  ₹60,000 + 15% of your total income that exceeds ₹12,00,000 
Between ₹16,00,001 and ₹20,00,000  ₹1,20,000 + 20% of your total income that exceeds ₹16,00,000 
Between ₹20,00,001 and ₹24,00,000  ₹2,00,000 + 25% of your total income that exceeds ₹20,00,000 
Above ₹24,00,000  ₹3,00,000 + 30% of your total income that exceeds ₹24,00,000 

Under this revised tax structure for FY 2025-26, individuals with earnings up to ₹12,00,000 will not have to pay any tax thanks to an increased rebate of ₹60,000.

Further, for salaried individuals, the tax liability becomes zero for incomes up to ₹12,75,000, as they can avail the benefit of standard deduction which is up to ₹75,000.

Changes in the Proposed New Tax Regime for FY 2025-26 (AY 2026-27)

How Will Income up to ₹12 Lakhs be Tax Free?

What is Marginal Relief & How it is Calculated?

Marginal relief is a tax benefit provided under Section 87A that ensures that taxpayers whose income exceeds ₹12 lakh by a small margin do not have to pay significantly more tax.

Marginal relief is applicable to incomes up to ₹12.75 lakh, after which normal tax rates apply, as per the IT slabs. Here’s how:

Total Income (₹) Tax Without Marginal Relief (₹) Tax With Marginal Relief (₹)
₹12,00,000 ₹60,000 ₹0
₹12,10,000 ₹61,500 ₹10,000
₹12,50,000 ₹67,500 ₹50,000
₹12,70,000 ₹70,500 ₹70,000
₹12,75,000 ₹71,250 ₹71,250

Different Tax Scenarios under New Tax Regime FY 2025-26 (AY 2026-27)

Income Tax Slabs for FY 2025-26 (AY 2026-27) - Old Tax Regime

For the FY 2025-26, the Income Tax Slab Rates for Individuals and HUF below 60 years of age as per the existing (old) income tax regime remain unchanged, and are as follows:

Income tax slabs Rate of Taxation
Up to ₹2,50,000 Nil
Between ₹2,50,001 and ₹5,00,000 5% of your total income that exceeds ₹2,50,000
Between ₹5,00,001 and ₹10,00,000 ₹12,500 + 20% of your total income that exceeds ₹5,00,000
Above ₹10,00,000 ₹1,12,500 + 30% of your total income that exceeds ₹10,00,000

You will also be levied with an additional 4% Health and Education cess, which is applicable to the tax amount calculated.

Income Tax Slabs for Individuals for FY 2024-25 (AY 2025-26)

Income Tax Slabs   Rate of Taxation
Up to ₹3,00,000  Nil 
Between ₹3,00,001 and ₹7,00,000   5% of your total income that exceeds ₹3,00,000  
Between ₹7,00,001 and ₹10,00,000   ₹20,000 + 10% of your total income that exceeds ₹7,00,000  
Between ₹10,00,001 and ₹12,00,000   ₹50,000 + 15% of your total income that exceeds ₹10,00,000  
Between ₹12,00,001 and ₹15,00,000   ₹80,000 + 20% of your total income that exceeds ₹12,00,000  
Above ₹15,00,001   ₹1,40,000 + 30% of your total income that exceeds ₹15,00,000 

On top of this, you will also be levied with an additional 4% Health and Education cess, applicable to the tax amount that is calculated above.

Income tax slabs Rate of Taxation
Up to ₹3,00,000 Nil
From ₹3,00,001 –  ₹5,00,000 5% of your total income that exceeds ₹3,00,000
From ₹5,00,001 – ₹10,00,000 ₹10,000 + 20% of your total income that exceeds  ₹5,00,000
Above ₹10,00,000 ₹1,10,000 + 30% of your total income that exceeds ₹10,00,000

Income Tax Slabs for Senior and Super Senior Citizens for FY 2025-26 (AY 2026-27)

Income Tax Slabs Rate of Taxation
Up to ₹4,00,000 Nil
Between ₹4,00,001 and ₹8,00,000  5% of your total income that exceeds ₹4,00,000 
Between ₹8,00,001 and ₹12,00,000  ₹20,000 + 10% of your total income that exceeds ₹8,00,000 
Between ₹12,00,001 and ₹16,00,000  ₹60,000 + 15% of your total income that exceeds ₹12,00,000 
Between ₹16,00,001 and ₹20,00,000  ₹1,20,000 + 20% of your total income that exceeds ₹16,00,000 
Between ₹20,00,001 and ₹24,00,000  ₹2,00,000 + 25% of your total income that exceeds ₹20,00,000 
Above ₹24,00,000  ₹3,00,000 + 30% of your total income that exceeds ₹24,00,000 

Income tax slabs Rate of Taxation
Up to ₹3,00,000 Nil
From ₹3,00,001 – ₹5,00,000 5% of your total income that exceeds ₹3,00,000
From ₹5,00,001 – ₹10,00,000 ₹10,000 + 20% of your total income that exceeds ₹5,00,000
Above ₹10,00,000 ₹1,10,000 + 30% of your total income that exceeds ₹10,00,000

Along with this, you will also be levied with an additional 4% Health and Education cess, which is applicable to the tax amount calculated.

Income tax slabs Rate of Taxation 
Up to ₹5,00,000 Nil
From ₹5,00,001 – ₹10,00,000 20% of your total income exceeding ₹5,00,000
Above ₹10,00,001 30% of your total income exceeding ₹10,00,000

Super-senior citizens are also liable to pay an extra 4% Health and Education Cess on the tax amount calculated.

Income Tax Slabs for Senior and Super Senior Citizens for FY 2024-25 (AY 2025-26)

Income Tax Slabs   Rate of Taxation
Up to ₹3,00,000  Nil 
Between ₹3,00,001 and ₹7,00,000   5% of your total income that exceeds ₹3,00,000  
Between ₹7,00,001 and ₹10,00,000   ₹20,000 + 10% of your total income that exceeds ₹7,00,000  
Between ₹10,00,001 and ₹12,00,000   ₹50,000 + 15% of your total income that exceeds ₹10,00,000  
Between ₹12,00,001 and ₹15,00,000   ₹80,000 + 20% of your total income that exceeds ₹12,00,000  
Above ₹15,00,001   ₹1,40,000 + 30% of your total income that exceeds ₹15,00,000 

Income Tax Slabs for Senior and Super Senior Citizens for FY 2024-25 - Old Tax Regime

Surcharges for Income Exceeding ₹50 Lakhs for FY 2025-26

For computation purposes, here are the surcharges to be followed to assess tax for the previous and ongoing fiscal year. These surcharges are for individuals with a taxable income exceeding ₹50 Lakh are being levied since April 1, 2023.

Note that before Budget 2023, the highest surcharge on income over ₹5 Crore was 37%, which has been reduced to 25% in the new tax regime only, effective from April 1, 2023. All the other surcharge rates remain the same in both old and new tax regimes.

Taxable Income Surcharge (New Tax Regime) Surcharge (Old Tax Regime)
For those with an income above ₹50 Lakh but below ₹1 Crore 10% 10%
For those with an income of above ₹1 Crore but below ₹2 Crore 15% 15%
For those with an income of above ₹2 Crore but below ₹5 Crore 25% 25%
For those with an income of above ₹5 Crore  25% 37%

Income Tax Rates in India for Domestic Companies for FY 2025-26

While the above income tax slabs in India are valid for individuals and HUFs, the taxation slabs applicable for domestic companies are different. The following tax rate surcharges remain unchanged for the financial year 2024-25. 

Gross turnover particulars Tax rate
Up to ₹400 Crore for the financial year 2019-20 25%
More than ₹400 Crore for the financial year 2019-20 30%
When the company has opted for Section 115BA 25%
When the company has opted for Section 115BAA 22%
When the company has opted for Section 115BAB 15%

Apart from these income tax rates in India, domestic companies will also be levied the following cess and surcharges –

Health and Education Cess – 4%

Net income particulars Surcharge rate on the income tax amount
For companies whose net income exceeds ₹1 Crore but is less than ₹10 Crore 7%
For companies whose net income exceeds ₹10 Crore 12%

However, it is crucial to remember that this surcharge rate for companies that have opted for taxability under Section 115BAA and Section 115BAB will be 10%, regardless of their total income amount.

Key Points to Remember About Income Tax Rates in India

Tips to Save Income Tax if You are a Salaried Individual

FAQs about Income Tax Slab Rates in India