Proposed income tax slabs for the new tax regime
Let’s take a closer look at how the proposed income tax slabs under the new regime compare to the previous ones.
Income Range
|
Current Tax Rate
|
Proposed Tax Rate
|
What’s Changed?
|
Up to Rs. 3,00,000
|
Nil
|
Nil
|
No change
|
Rs. 3,00,001 – Rs. 6,00,000
|
5%
|
5% (till Rs. 7L)
|
Slab expanded by Rs. 1 lakh
|
Rs. 6,00,001 – Rs. 9,00,000
|
10%
|
10% (from Rs. 7L)
|
Slab expanded by Rs. 1 lakh
|
Rs. 9,00,001 – Rs. 12,00,000
|
15%
|
15%
|
Continuity maintained
|
Rs. 12,00,001 – Rs. 15,00,000
|
20%
|
20%
|
No change
|
Above Rs. 15,00,000
|
30%
|
30%
|
No change
|
What does this mean for you?
With the slab changes, incomes between Rs. 7–10 lakh will be taxed at lower rates than before. While you can’t claim traditional deductions under the new regime, the tax benefit from lower rates may still work in your favour especially if you haven’t invested in instruments like ELSS or PPF.
Tax slabs under old vs. new tax regime – FY 2023–24 and FY 2024–25
Still deciding which regime to choose? It helps to compare how the tax slabs have evolved for both financial years. The table below shows how the new regime has been adjusted in FY 2024–25 to benefit middle-income earners:
Tax Slab
|
FY 2023–24 Rate
|
FY 2024–25 Rate
|
Change
|
Upto Rs. 3 lakh
|
Nil
|
Nil
|
No change
|
Rs. 3 lakh – Rs. 6 lakh
|
5%
|
Rs. 3L–Rs. 7L @ 5%
|
Slab extended by Rs. 1 lakh
|
Rs. 6 lakh – Rs. 9 lakh
|
10%
|
Rs. 7L–Rs. 10L @ 10%
|
Slight slab shift
|
Rs. 9 lakh – Rs. 12 lakh
|
15%
|
15%
|
No change
|
Rs. 12 lakh – Rs. 15 lakh
|
20%
|
20%
|
No change
|
Above Rs. 15 lakh
|
30%
|
30%
|
No change
|
If you're leveraging the old regime, maximise your 80C and 80D benefits by investing in instruments that give both tax savings and long-term returns like ELSS funds or PPF. Save Taxes with ELSS Mutual Funds!
Tax saving above Rs. 9 lakh salary under the new regime
While the new regime does away with most exemptions and deductions, that doesn’t mean you're left without any tax-saving options. Here are a few benefits you can still claim under the new tax regime, even with a salary above Rs. 9 lakh:
Section
|
Benefit
|
Standard deduction
|
Rs. 50,000 for salaried individuals (increased to Rs. 75,000 as per Budget 2024)
|
80CCD(2)
|
Employer’s contribution to NPS – deductible up to 10% of basic salary
|
80CCH
|
Contributions to Agniveer Corpus Fund
|
57(iia)
|
Deduction for family pension received
|
10(10C)
|
Exemption on voluntary retirement compensation
|
10(10)
|
Exemption for gratuity received
|
10(10AA)
|
Leave encashment on retirement
|
Section 24
|
Interest on home loan for a let-out property (not self-occupied)
|
Additional exemptions still allowed:
So, even though the new regime is simpler, you can still bring down your taxable income if you make use of these available exemptions.
Tax saving above Rs. 9 lakh salary under the old regime
If you're someone who invests smartly or has eligible expenses, the old tax regime gives you much more room to lower your taxable income. Here’s a look at the key deductions you can use:
Section 80C: Invest up to Rs. 1.5 lakh in options like PPF, ELSS, EPF, NSC, life insurance premiums, children’s tuition fees, or even stamp duty and home loan principal repayment.
Section 24(b): Claim up to Rs. 2 lakh on the interest paid on a home loan for a self-occupied house.
Section 80D: Deduction on health insurance premiums—
Rs. 25,000 for self/family below 60
Rs. 50,000 if parents are senior citizens
Section 80E: Interest on education loan (deduction for 8 years)
Section 80G: Donations to registered charities (50% or 100% deduction based on institution)
Section 80CCD(1B): Additional Rs. 50,000 deduction for NPS contributions
Section 80DD: Expenses on a dependent with disability (Rs. 75,000 or Rs. 1.25 lakh depending on severity)
The old regime rewards tax-saving behavior. So, if you’re already investing or have expenses that fall under these sections, you might end up saving more tax than with the new regime.
How to save tax for salary above Rs. 9 lakh?
Want to lower your tax liability without compromising your financial goals? Start with these practical steps:
1. Choose the right tax regime:
Compare both old and new regimes. The old regime gives access to deductions and exemptions, while the new regime offers lower rates with limited deductions. Use online tax calculators to see which regime works best for your financial situation.
2. Claim the standard deduction:
Every salaried employee gets a flat deduction. Under the old regime, it’s Rs. 50,000. Budget 2024 raised this to Rs. 75,000 in the new regime, boosting savings without any paperwork.
3. Home loan interest deduction:
If you’ve taken a home loan, you can claim:
Example:
If your gross income is Rs. 8.5 lakh and you claim Rs. 2 lakh under Section 24, your taxable income drops to Rs. 6.5 lakh.
4. Utilise Section 80C fully:
By investing in instruments like ELSS, PPF, EPF, or paying tuition fees and life insurance premiums, you can reduce taxable income by up to Rs. 1.5 lakh.
5. Rebate under Section 87A:
If your taxable income (after deductions) is up to Rs. 5 lakh in the old regime, you get a rebate of Rs. 12,500. In the new regime, this increases to Rs. 25,000 for incomes up to Rs. 7 lakh.
6. Health insurance premium (Section 80D):
Deduct up to:
Rs. 25,000 for self and family (below 60 years)
Rs. 50,000 for senior citizen parents
Smart tax planning goes beyond choosing a regime it’s about actively using deductions, rebates, and tax-saving investments to optimise every rupee of your income. Compare Mutual Fund Options Now!
Also read: What is Direct Tax Code 2025
How to pay no income tax on Rs. 9 lakh salary?
Believe it or not, it’s possible to reduce your tax liability to zero even if you earn Rs. 9 lakh. The trick lies in using every available deduction and rebate under the old tax regime:
Step 1: Claim standard deduction of Rs. 50,000 → income becomes Rs. 8.5 lakh
Step 2: Use Section 80C to invest Rs. 1.5 lakh → income drops to Rs. 7 lakh
Step 3: Claim Rs. 2 lakh under Section 24(b) for home loan interest → income = Rs. 5 lakh
Step 4: Use Section 80D to claim Rs. 25,000 for health insurance → income = Rs. 4.75 lakh
Step 5: Contribute Rs. 50,000 to NPS under Section 80CCD(1B) → income = Rs. 4.25 lakh
Final Step: Since your income is now below Rs. 5 lakh, you qualify for Section 87A rebate, and your tax becomes zero.
Summary
Earning Rs. 9 lakh annually doesn’t mean you have to pay high taxes. With a bit of tax planning, you can take advantage of standard deductions, home loan benefits, health insurance premiums, and multiple investment-linked exemptions to reduce your taxable income significantly.
Choosing the right tax regime is the first step. Then, by aligning your spending and saving habits with the available deductions under the Income Tax Act, you can lower your overall tax burden—or even bring it down to zero. With the right mix of deductions under Section 80C, 24(b), and 80D, you can bring your taxable income below Rs. 5 lakh—potentially bringing your tax liability to zero and freeing up capital for investments. Save Taxes with ELSS Mutual Funds! Start early, stay organised, and keep reviewing your plan each year to make the most of available tax-saving opportunities.
One way to invest the money you save by lowering your tax liability is mutual fund schemes. You can visit the Bajaj Finserv Mutual Fund Platform for investing in mutual funds. You can compare mutual fund schemes through unique tools such as mutual fund calculators.
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