What is the previous year and assessment year?

In income-tax law, the "Previous Year" is the period from April 1st to March 31st when income is earned. The following year is the "Assessment Year," where this income is evaluated for tax purposes. For instance, FY 2023-24 is assessed in AY 2024-25.

How much income is tax free in India in 2024?

In the old tax regime, individuals under 60 years old are granted an exemption up to Rs. 2.5 lakhs, while senior citizens aged between 60 and 80 years enjoy an exemption up to Rs. 3 lakhs. Additionally, super senior citizens, aged above 80 years, are exempted up to Rs. 5 lakhs.

What is the 80C limit for FY 2024 25?

The maximum limit for claiming tax benefits under Section 80C remains at Rs. 1.5 lakh for FY 2024-25, the same as the current fiscal year 2023-24. This limit allows individuals to reduce their taxable income by investing in specified instruments like EPF, PPF, ELSS, NSC, and paying life insurance premiums.

Is 7 lakh income tax free?

In the old regime, individuals are exempt from paying tax if their taxable income (after deductions) is less than Rs. 5 lakh. Conversely, in the New Regime, the entire income remains tax-free if the taxable income falls below Rs. 7 lakh.

Can I claim 80C deductions and opt for a new income tax slab regime?

No, individuals cannot claim 80C deductions and opt for the new income tax slab regime simultaneously. Under the new tax regime, most deductions under Section 80C are not applicable. Taxpayers opting for the new regime must forgo these deductions, impacting their taxable income and overall tax liability.

What is the meaning of rebate under section 87A under the IT Act?

Section 87A rebate aids taxpayers in diminishing their income tax burden. This rebate is applicable if your total income, post Chapter VIA deductions, does not surpass Rs 5 lakh in FY 2023-24. Utilizing this rebate results in a nullification of your income tax liability.

How to calculate surcharge on income tax?

Begin by computing the income tax, equivalent to 30% of the taxable income, totaling Rs 18 lakh. Then, apply the surcharge rate of 10%, resulting in a surcharge amounting to 10% of Rs 19 lakh, totaling Rs 1.9 lakh.

What is the basic exemption limit for FY 24 25?

The basic exemption limit under the new tax regime for FY 2024-25 has been set at Rs. 3 lakh (this limit is Rs. 2.5 lakh in the old regime). This implies that individuals do not have to pay tax on income up to Rs. 3 lakh. After the latest Union Budget 2024 changes, the new tax regime features five income tax slabs with rates ranging from 5% to 30%.

What is the rebate under section 87A for FY 2024 25?

The rebate under Section 87A for FY 2024-25 is Rs. 25,000 for the new tax regime, applicable for taxable income up to Rs. 7 lakh. This means that individuals with taxable income within this range will not pay any income tax after claiming the rebate.

Which is better old regime or new regime?

The choice between the old and new regime after the Union Budget 2024 changes depends on your financial situation and tax preferences. The new regime, with its lower tax rates and simplicity, can be advantageous for individuals with fewer deductions and exemptions. For FY 2024-25, the new regime offers reduced rates and makes it an attractive option when you do not have deductions to claim. On the other hand, the old regime allows for deductions like those under section 80C (Rs. 1,50,000), section 80D (Rs. 25,000/ Rs. 50,000), and more. These deductions can benefit those with significant eligible expenses. Hence, if your deductions are substantial, the old regime could result in lower taxes despite its complexity.

Is 80C applicable in the new tax regime?

No, the new tax regime no longer permits deductions under Chapter VI-A, which encompass widely used deductions such as 80C (pertaining to investments), 80D (for medical insurance premiums), and 80E (relating to education loan interest).

Can I claim deductions under section 80C and choose a new income tax slab regime?

No, you cannot claim deductions under Section 80C and choose the new income tax slab regime simultaneously. If you opt for the new tax regime, you will have to forgo several deductions and exemptions available in the old regime, including those under Section 80C.

Is there any tax slab for FY 2024-25?

Yes, the government has maintained the existing tax slabs for FY 2024-25. These slabs determine the tax rate applicable to different income brackets.

What is the rebate under Section 87A for FY 2024-25?

The rebate limit denotes the maximum amount eligible for rebate claims. In India, for the financial year 2024-25, the rebate limit under Section 87A is set at Rs. 12,500 for the old tax regime and Rs. 25,000 for the new tax regime.

How much income tax will salaried taxpayers save?

In the 2024 Union Budget, Finance Minister Nirmala Sitharaman announced updates to the new tax regime, which include a higher standard deduction (Rs. 75,000, up from the erstwhile Rs. 50,000) and revised income tax slabs. For salaried taxpayers, this can lead to tax savings of up to Rs. 17,500. If you’re already using the new tax regime, you could benefit from these changes by paying less tax.

What’s happened on the short-term capital gains tax front?

In the Union Budget 2024, Section 111A has been amended. Now, the tax rate on short-term capital gains (STCG) for STT-paid equity shares, equity mutual funds, and units of business trust has been increased to 20% from the previous limit of 15%. This change aims to address concerns that the lower rate primarily benefits high-net-worth individuals. However, other types of short-term capital gains will remain taxed at their current rates.

What does Budget 2024 say on NPS benefits?

In the Union Budget 2024, some significant changes were proposed for the tax benefits related to the National Pension System (NPS). Firstly, there has been an increase in the deduction for employer contributions. Previously, employers could claim a tax deduction for contributions to an employee’s pension scheme under Section 36 of the Income Tax Act, up to 10% of the employee's salary. The Budget has raised this limit to 14%. This means that employers can now deduct a larger portion of their contributions to the pension scheme from their taxable income. Secondly, some changes have been made to Section 80CCD, which deals with tax deductions for contributions to pension schemes. Under this section, the Central Government and State Governments could already contribute up to 14% of the employee’s salary, while other employers were restricted to 10%. Now, the Budget allows all employers, including private ones, to claim a tax deduction of up to 14% of an employee’s salary for pension contributions. This matches the deduction limit previously available only to the Central and State Governments. However, this increased limit applies only if the employee’s salary falls under a specific tax regime (Section 115BAC).

How will you save Rs. 17,500?

In the Union Budget 2024, Finance Minister Nirmala Sitharaman announced a base tax benefit of Rs. 17,500 for taxpayers. This benefit does not account for additional charges like cess or surcharges, which may apply at higher income levels. For those with an income up to Rs. 7.75 lakh, the benefit translates into zero income tax liability. If your income is up to Rs. 10 lakh, you will save Rs. 10,000 in taxes annually before considering cess. If one were to include the cess, the benefits would be higher.

Who should now opt for a new income tax regime?

As per the latest changes in the Union Budget 2024, if your gross income exceeds Rs. 15.75 lakh, you should consider choosing the new tax regime only if your total deductions and exemptions are less than Rs. 4,33,333 (excluding the standard deduction). This implies the new regime is beneficial only if you don't have significant deductions and exemptions, as it offers lower tax rates compared to the old regime.

What do the tax changes mean?

The latest changes introduced in the Union Budget 2024 will benefit the middle class and pensioners. As per them, the standard deduction under the new tax regime will rise from Rs. 50,000 to Rs. 75,000, and the deduction for family pensions will increase from Rs. 15,000 to Rs. 25,000. These adjustments, along with revised tax slabs, are expected to save individuals up to Rs. 17,500 in taxes.

What are the benefits for Indian professionals working in MNCs?

Currently, for Indian professionals working in multinational companies (MNCs) who receive Employee Stock Ownership Plans (ESOPs) and invest in social security schemes or other assets abroad, have to face penal consequences under the Black Money Act for not reporting small foreign assets. Now, the 2024 Budget has de-penalised the non-reporting of foreign movable assets valued up to Rs 20 lakh.

Is the new income tax regime not inflation adjusted?

The new income tax regime seems to benefit lower income levels (up to Rs. 15 lakhs) by offering tax rates lower than inflation-adjusted rates from 2013-14. However, beyond this income level, the new regime does not account for inflation. In comparison, the old tax regime only adjusts for inflation up to Rs. 5 lakh. This implies the new regime lacks inflation adjustment for higher incomes, particularly above Rs. 15 lakhs, whereas in the old regime, the effect of such inflation adjustment is only visible in incomes up to Rs. 5 lakhs.

What is the standard deduction limit after announcing the budget 2024?

The Union Budget 2024 has increased the standard deduction limit to Rs. 75,000 under the new regime from the existing limit of Rs. 50,000. However, it must be noted that this increase is applicable only under the new regime. For taxpayers under the old regime, the standard deduction limit still remains at Rs. 50,000.

What is the tax deduction for 2024-2025?

For FY 2024-25, the key tax deductions remain similar to the previous year. Salaried employees can claim a standard deduction of Rs 75,000, and pensioners a deduction of Rs 25,000 under the new tax regime. Other common deductions, such as those for investments under Section 80C, apply in the old regime.

What is the standard deduction for the new income tax slab?

Under the new tax regime for 2024-25, salaried employees and pensioners are eligible for a standard deduction of Rs 75,000. This deduction helps reduce taxable income, providing significant tax relief under the updated slab structure.

What is the tax deduction for 2024-2025?

For FY 2024-25, the key tax deductions remain similar to the previous year. Salaried employees can claim a standard deduction of Rs 75,000, and pensioners a deduction of Rs 25,000 under the new tax regime. Other common deductions, such as those for investments under Section 80C, apply in the old regime.

What is the standard deduction for the new income tax slab?

Under the new tax regime for 2024-25, salaried employees and pensioners are eligible for a standard deduction of Rs 75,000. This deduction helps reduce taxable income, providing significant tax relief under the updated slab structure.

Who is eligible for rebate under section 87A of the Income-tax Act, 1961?

A resident individual is eligible for rebate if the net taxable income does not exceed specified limit in a financial year. A rebate of maximum up to Rs. 12,500 is available under old tax regime and of Rs. 25,000 in new tax regime. This means that individual having taxable income of up to Rs. 5 lakh is not required to pay any taxes under old tax regime. For individuals opting for new tax regime, taxable income not exceeding Rs. 7 lakh does not pay any taxes.

What are the incomes that are not taxable under the Income-tax Act?

Incomes that are not taxable are specifically mentioned under the Income-tax Act. Example of these are: interest earned from PPF account, interest earned from Sukanya Samriddhi Yojana Account, maturity amount from PPF or Sukanya Samriddhi account, agricultural income etc.

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

3 mins read

15-January-2025

Ahead of the Union Budget 2025-26, the Indian government is considering further adjustments to income tax slabs. The aim is to stimulate individual taxpayers and boost consumer spending, particularly in urban areas where consumption has shown signs of moderation.

Several income tax reforms are anticipated, with a focus on making the new tax regime more appealing.

This could involve changes to income tax slabs, potentially lowering the threshold for higher tax brackets and aligning them with current economic conditions. Tax experts suggest applying the 30% tax rate to income exceeding Rs. 20 lakh to ensure a more progressive tax structure.

What is an Income tax slab?

In India, individuals are required to pay income tax according to the tax slab their income falls within. These slabs delineate various income ranges, each associated with a specific tax rate, which escalates as income rises. This slab-based approach was devised to establish an equitable tax framework across the country. Adjustments to the income tax slabs are typically made during the budget announcements. Income tax is categorised into three distinct age-based groups

Individuals younger than 60 years,
Senior citizens aged between 60 and 80 years,
Super senior citizens aged over 80 years.

Income tax slabs for FY 2024-25 (AY 2025-26)

Here are the highlights of the Income Tax Slabs for 2024-25: The new tax regime has been made more appealing for small taxpayers with revised tax slabs and an increased standard deduction. In the 2024 Budget, Finance Minister Nirmala Sitharaman announced the following tax slabs under the new tax regime:

Latest income tax slab (FY 2024-25 in Rs.)	Income tax rate (%)
Up to Rs. 3,00,000	NIL
Rs. 3,00,001 to Rs. 7,00,000	5%(Tax Rebate u/s 87A up to Rs 7 lakh)
Rs. 7,00,001 to Rs. 10,00,00	10%
Rs. 10,00,001 to Rs. 12,00,000	15%
Rs. 12,00,001 to Rs. 15,00,000	20%
Above Rs. 15,00,000	30%

In the 2024 Budget, the standard deduction limit for salaried employees has been increased to Rs. 75,000. For family pensioners, the limit has been raised to Rs. 25,000. This change is anticipated to provide tax relief to 40 million salaried employees and pensioners.

Revised Income Tax Slabs and Rates for AY 2025-26 (FY 2024-25)

The income tax slabs and rates for the financial year 2024-25 (Assessment Year 2025-26) remain unchanged from the previous year. The Interim Budget 2024 presented by Finance Minister Nirmala Sitharaman did not include any modifications to the income tax structure.

New Tax Regime u/s 115BAC
Income Tax Slab	Income Tax Rate	*Surcharge
Up to Rs. 3,00,000	Nil	Nil
Rs. 3,00,001 - Rs. 7,00,000**	5% above Rs. 3,00,000	Nil
Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000	Nil
Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000	Nil
Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000	Nil
Above Rs. 15,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	Nil
Rs. 15,00,001- Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	Nil
Rs. 50,00,001- Rs. 100,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	10%
Rs. 100,00,001- Rs. 200,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	15%
Above Rs. 200,00,001	Rs. 1,40,000 + 30% above Rs. 15,00,000	25%

Budget 2025: Income tax rule changes that will impact your ITR filing in 2025

Revised tax slabs: The new tax regime features revised income tax slabs.
Enhanced standard deduction: Salaried employees can now claim a higher standard deduction of Rs. 75,000 under the new regime.
Increased basic exemption limit: A significant proposal suggests raising the basic exemption limit from Rs. 3 lakh to Rs. 5 lakh under the new regime.
Section 80C deduction: The Rs. 1.5 lakh limit for Section 80C deductions remains unchanged.
Higher health insurance deductions: To address rising healthcare costs, the deduction limit under Section 80D for health insurance premiums may increase from Rs. 25,000 to Rs. 40,000, and possibly up to Rs. 75,000 for senior citizens.
Increased NPS deduction limit: The current deduction limit of Rs. 50,000 under Section 80CCD (1B) for NPS contributions may be raised to encourage retirement planning.
Housing and rental relief: Taxpayers are seeking tax relief related to housing and rental costs, especially in rapidly growing cities.
Middle-class tax relief: A key expectation is a revision of the 30% tax rate. Taxpayers hope to see the threshold for this rate increased from Rs. 15 lakh to Rs. 20 lakh to provide relief to a larger segment of the population.

Revised old vs. new tax regime: FY 2024-25 (AY 2025-26) vs. FY 2023-24 (AY 2024-25)

Starting FY 2024-25, the new tax regime has become the default option for individual taxpayers. While the new regime offers limited deductions compared to the old regime, eligible taxpayers still have the flexibility to opt for the old tax regime if it better suits their financial situation.

A comparison of the new tax regime slab rates for FY 2024-25 (AY 2025-26) against those for FY 2023-24 (AY 2024-25) reveals that the new regime provides additional tax relief, making it a more appealing option for many taxpayers. Below is a detailed comparison of the income tax slab rates under the new tax regime for FY 2024-25 versus FY 2023-24.

Old Tax Regime			New Tax Regime u/s 115BAC
Income Tax Slab	Income Tax Rate	*Surcharge	Income Tax Slab	Income Tax Rate	*Surcharge
Up to Rs. 2,50,000	Nil	Nil	Up to Rs. 3,00,000	Nil	Nil
Rs. 2,50,001 - Rs. 5,00,000**	5% above Rs. 2,50,000	Nil	Rs. 3,00,001 - Rs. 7,00,000**	5% above Rs. 3,00,000	Nil
Rs. 5,00,001 - Rs. 10,00,000	Rs. 12,500 + 20% above Rs. 5,00,000	Nil	Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000	Nil
Rs. 10,00,001- Rs. 50,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	Nil	Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000	Nil
Rs. 50,00,001- Rs. 100,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	10%	Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000	Nil
Rs. 100,00,001- Rs. 200,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	15%	Rs. 15,00,001- Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	Nil
Rs. 200,00,001- Rs. 500,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	25%	Rs. 50,00,001- Rs. 100,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	10%
Above Rs. 500,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	37%	Rs. 100,00,001- Rs. 200,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	15%
			Above Rs. 200,00,001	Rs. 1,40,000 + 30% above Rs. 15,00,000	25%

The revised slab rates under the new tax regime for AY 2025-26 offer additional tax relief to individual taxpayers compared to the previous year's new tax regime for AY 2024-25.

It is important to note that these new tax slabs apply uniformly to all individual taxpayers, regardless of age—whether they are under 60, senior citizens aged 60 to under 80, or super senior citizens aged 80 and above. In contrast, the old tax regime for FY 2024-25 continues to provide certain advantages, such as a higher exemption limit for senior and super senior citizens. Let’s explore these benefits in more detail.

Income Tax Slabs Under Old Tax Regime

Under the old tax regime, income tax slabs vary according to an individual’s age within a financial year, which means the basic exemption limit also changes based on age. For individuals below 60 years, the exemption limit is Rs. 2.5 lakh. Senior citizens, aged 60 and above but below 80, have a higher exemption limit of Rs. 3 lakh. For super senior citizens, aged 80 and above, the exemption limit increases further to Rs. 5 lakh. However, for non-resident individuals, the exemption limit remains Rs. 2.5 lakh, regardless of age.

Income Tax Slabs under the Old Tax Regime for Individual Taxpayers Below 60 Years

Income tax rates applicable to individuals (both residents and non-residents) who were less than 60 years of age at any point during the previous year are as follows:

Income Slabs	Tax rate
Up to Rs. 2,50,000	NIL
Rs. 2,50,001 – Rs. 5,00,000	5%
Rs. 5,00,001 to Rs. 10,00,000	20%
Rs. 10,00,001 and above	30%

Revised Income Tax Slabs under the Old Tax Regime for Individual Taxpayers Below 60 Years

Revised income tax slabs and rates under the old tax regime for individuals (both residents and non-residents) who were less than 60 years of age at any point during the previous year are as follows:

Income Tax Slab	Income Tax Rate	*Surcharge
Up to Rs. 2,50,000	Nil	Nil
Rs. 2,50,001 - Rs. 5,00,000**	5% above Rs. 2,50,000	Nil
Rs. 5,00,001 - Rs. 10,00,000	Rs. 12,500 + 20% above Rs. 5,00,000	Nil
Rs. 10,00,001- Rs. 50,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	Nil
Rs. 50,00,001- Rs. 100,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	10%
Rs. 100,00,001- Rs. 200,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	15%
Rs. 200,00,001- Rs. 500,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	25%
Above Rs. 500,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	37%

Income Tax Slabs and Rates under the Old Tax Regime for Senior Citizens Aged 60 to 80 Years

Senior citizens, defined as individual taxpayers aged between 60 and 80 years, enjoy a higher exemption limit under the old tax regime. For AY 2025-26, these taxpayers are eligible for an exemption of up to Rs. 3 lakh. The tax slabs and rates for senior citizens opting for the old tax regime in FY 2024-25 are as follows:

Income Slabs	Tax Rate
Up to Rs. 3,00,000	NIL
Rs. 3,00,001 – Rs. 5,00,000	5%
Rs. 5,00,001 to Rs. 10,00,000	20%
Rs. 10,00,001 and above	30%

Revised Income Tax Slabs and Rates under the Old Tax Regime for Senior Citizens Aged 60 to 80 Years

Revised income tax slabs and rates under the old tax regime for individuals (both residents and non-residents) who were 60 years of age or more but less than 80 years of age at any point during the previous year are as follows:

Income Tax Slab	Income Tax Rate	*Surcharge
Up to Rs. 3,00,000	Nil	Nil
Rs. 3,00,001 - Rs. 5,00,000**	5% above Rs. 3,00,000	Nil
Rs. 5,00,001 - Rs. 10,00,000	Rs. 10,000 + 20% above Rs. 5,00,000	Nil
Rs. 10,00,001- Rs. 50,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	Nil
Rs. 50,00,001- Rs. 100,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	10%
Rs. 100,00,001- Rs. 200,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	15%
Rs. 200,00,001- Rs. 500,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	25%
Above Rs. 500,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	37%

Income Tax Slabs and Rates under the Old Tax Regime for Super Senior Citizens Aged Over 80 Years

Super Senior Citizens, defined as individuals aged over 80 years, benefit from a higher exemption limit of up to Rs. 5 lakh under the old tax regime. As a result, super senior citizen taxpayers are not required to pay income tax on their annual taxable income up to Rs. 5 lakh for FY 2024-25. The income tax slabs and rates for super senior citizens in AY 2025-26 are as follows:

Income Slabs	Tax Rate
Up to Rs. 5,00,000	NIL
Rs. 5,00,001 to Rs. 10,00,000	20%
Rs. 10,00,001 and above	30%

Revised Income Tax Slabs and Rates under the Old Tax Regime for Super Senior Citizens Aged Over 80 Years

Here is the revised income tax slabs and rates under the old tax regime tax rates for Individual (resident or non-resident) 80 years of age or more anytime during the previous year are as under:

Income Tax Slab	Income Tax Rate	*Surcharge
Up to Rs. 5,00,000	Nil	Nil
Rs. 5,00,001 - Rs. 10,00,000	20% above Rs. 5,00,000	Nil
Rs. 10,00,001- Rs. 50,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	Nil
Rs. 50,00,001- Rs. 100,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	10%
Rs. 100,00,001- Rs. 200,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	15%
Rs. 200,00,001- Rs. 500,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	25%
Above Rs. 500,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	37%

Current Slabs and Rates under the New Tax Regime for FY 2024-25

Here’s a detailed look at the income tax slab rates for FY 2024-25, applicable to different groups of taxpayers under the new tax regime.

New tax regime slabs and rates slabs for individual taxpayers aged less than 60 years old

Here is the new tax regime slabs and tax rates for Individual (resident or non-resident) less than 60 years of age anytime during the previous year are as under:

Income Tax Slab	Income Tax Rate	*Surcharge
Up to Rs. 3,00,000	Nil	Nil
Rs. 3,00,001 - Rs. 7,00,000**	5% above Rs. 3,00,000	Nil
Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000	Nil
Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000	Nil
Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000	Nil
Rs. 15,00,001- Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	Nil
Rs. 50,00,001- Rs. 1,00,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	10%
Rs. 100,00,001- Rs. 2,00,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	15%
Above Rs. 2,00,00,001	Rs. 1,40,000 + 30% above Rs. 15,00,000	25%

Old vs new income tax slabs and tax rates for individual taxpayers aged less than 60 years old

The income tax regime for individual taxpayers aged below 60 years offers two options: the old regime with deductions and exemptions, and the new regime with lower tax rates but no exemptions. To help you make an informed decision, the table below compares the tax slabs and rates under both regimes, highlighting their key differences.

Old Tax Regime			New Tax Regime u/s 115BAC
Income Tax Slab	Income Tax Rate	*Surcharge	Income Tax Slab	Income Tax Rate	*Surcharge
Up to Rs. 2,50,000	Nil	Nil	Up to Rs. 3,00,000	Nil	Nil
Rs. 2,50,001 - Rs. 5,00,000**	5% above Rs. 2,50,000	Nil	Rs. 3,00,001 - Rs. 7,00,000**	5% above Rs. 3,00,000	Nil
Rs. 5,00,001 - Rs. 10,00,000	Rs. 12,500 + 20% above Rs. 5,00,000	Nil	Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000	Nil
Rs. 10,00,001- Rs. 50,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	Nil	Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000	Nil
Rs. 50,00,001- Rs. 1,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	10%	Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000	Nil
Rs. 1,00,00,001- Rs. 2,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	15%	Rs. 15,00,001- Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	Nil
Rs. 2,00,00,001- Rs. 5,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	25%	Rs. 50,00,001- Rs. 100,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	10%
Above Rs. 5,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	37%	Rs. 1,00,00,001- Rs. 200,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	15%
			Above Rs. 2,00,00,001	Rs. 1,40,000 + 30% above Rs. 15,00,000	25%

New tax regime slabs and rates for senior citizen taxpayers aged between 60 to 80 years

Senior citizens aged 60 to 80 years now have the option of a simplified tax regime with revised slabs and rates. This new structure aims to provide financial relief and encourage greater adoption of the new tax regime by senior citizens. The following table compares the old and new tax regimes, highlighting the key differences and potential benefits for taxpayers in this age group.

Income Tax Slab	Income Tax Rate	*Surcharge
Up to Rs. 3,00,000	Nil	Nil
Rs. 3,00,001 - Rs. 7,00,000**	5% above Rs. 3,00,000	Nil
Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000	Nil
Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000	Nil
Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000	Nil
Rs. 15,00,001- Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	Nil
Rs. 50,00,001- Rs. 1,00,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	10%
Rs. 1,00,00,001- Rs. 2,00,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	15%
Above Rs. 2,00,00,001	Rs. 1,40,000 + 30% above Rs. 15,00,000	25%

Old vs new income tax slabs and tax rates for senior citizen taxpayers aged between 60 to 80 years

To make informed financial decisions, it's essential for senior citizens (aged 60 to 80 years) to understand the differences between the old and new income tax slabs. The Indian government has introduced new tax regimes to simplify tax calculations, and it's crucial to assess how these changes impact your tax liability. This section provides a comparative analysis of the old and new income tax slabs and rates, enabling you to determine which regime offers the most advantageous tax outcome.

Old Tax Regime			New Tax Regime u/s 115BAC
Income Tax Slab	Income Tax Rate	*Surcharge	Income Tax Slab	Income Tax Rate	*Surcharge
Up to Rs. 3,00,000	Nil	Nil	Up to Rs. 3,00,000	Nil	Nil
Rs. 3,00,001 - Rs. 5,00,000**	5% above Rs. 3,00,000	Nil	Rs. 3,00,001 - Rs. 7,00,000**	5% above Rs. 3,00,000	Nil
Rs. 5,00,001 - Rs. 10,00,000	Rs. 10,000 + 20% above Rs. 5,00,000	Nil	Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000	Nil
Rs. 10,00,001- Rs. 50,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	Nil	Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000	Nil
Rs. 50,00,001- Rs. 1,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	10%	Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000	Nil
Rs. 1,00,00,001- Rs. 2,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	15%	Rs. 15,00,001- Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	Nil
Rs. 2,00,00,001- Rs. 5,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	25%	Rs. 50,00,001- Rs. 100,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	10%
Above Rs. 5,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	37%	Rs. 1,00,00,001- Rs. 200,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	15%
			Above Rs. 2,00,00,001	Rs. 1,40,000 + 30% above Rs. 15,00,000	25%

New tax regime slabs and rates for super senior citizen individual taxpayers aged over 80 years

The Indian government has implemented revised tax slabs and rates for super senior citizens (aged 80 years and above) under the new tax regime. These changes reflect a commitment to providing significant tax relief to this demographic, recognizing their unique financial needs and circumstances. This section presents a comparative analysis of the updated tax slabs and rates, enabling you to understand how these revisions impact your tax liabilities.

Income Tax Slab	Income Tax Rate	*Surcharge
Up to Rs. 3,00,000	Nil	Nil
Rs. 3,00,001 - Rs. 7,00,000**	5% above Rs. 3,00,000	Nil
Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000	Nil
Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000	Nil
Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000	Nil
Above Rs. 15,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	Nil
Rs. 15,00,001- Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	Nil
Rs. 50,00,001- Rs. 100,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	10%
Rs. 100,00,001- Rs. 200,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	15%
Above Rs. 200,00,001	Rs. 1,40,000 + 30% above Rs. 15,00,000	25%

Old vs new income tax slabs and tax rates for super senior citizen individual taxpayers aged over 80 years

The Indian tax system provides specific benefits to super senior citizens (aged 80+). This section compares the old and new income tax slabs and rates for this demographic, enabling you to understand the differences and make informed decisions about which tax regime offers the most advantageous tax outcome.

Old Tax Regime			New Tax Regime u/s 115BAC
Income Tax Slab	Income Tax Rate	*Surcharge	Income Tax Slab	Income Tax Rate	*Surcharge
Up to Rs. 5,00,000	Nil	Nil	Up to Rs. 3,00,000	Nil	Nil
Rs. 5,00,001 - Rs. 10,00,000	20% above Rs. 5,00,000	Nil	Rs. 3,00,001 - Rs. 7,00,000**	5% above Rs. 3,00,000	Nil
Rs. 10,00,001- Rs. 50,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	Nil	Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000	Nil
Rs. 50,00,001- Rs. 100,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	10%	Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000	Nil
Rs. 100,00,001- Rs. 200,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	15%	Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000	Nil
Rs. 200,00,001- Rs. 500,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	25%	Above Rs. 15,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	Nil
Above Rs. 500,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	37%	Rs. 15,00,001- Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	Nil
			Rs. 50,00,001- Rs. 100,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	10%
			Rs. 100,00,001- Rs. 200,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	15%
			Above Rs. 200,00,001	Rs. 1,40,000 + 30% above Rs. 15,00,000	25%

Understanding the revised New Tax Regime: What’s changed?

The Union Budget 2024 has introduced significant updates to the income tax regime, aimed at simplifying the tax structure and providing relief to taxpayers. The revised income tax slabs bring expanded thresholds for certain categories, ensuring more taxpayers benefit from lower rates. These changes not only reflect the government's commitment to boosting disposable income but also encourage individuals to adopt the new tax regime. The following table depicts the changes made in the new regime to benefit the taxpayers:

Income Tax Slabs for FY 2023-24	Tax Rates (FY 2023-24)	Income Tax Slabs for FY 2024-25	Tax Rates (FY 2024-25)	Changes
Up to Rs. 3,00,000	NIL	Up to Rs. 3,00,000	NIL	No Change
Rs. 3,00,000 – Rs. 6,00,000	5%	Rs. 3,00,000 – Rs. 7,00,000	5%	Slab expanded by Rs 1,00,000
Rs. 6,00,000 - Rs 9,00,000	10%	Rs. 7,00,000 – Rs. 10,00,000	10%	Slab expanded by Rs 1,00,000
Rs. 9,00,000 - Rs 12,00,000	15%	Rs. 10,00,000 – Rs. 12,00,000	15%	No Change in Rate; New Threshold
Rs. 12,00,000 - Rs 15,00,000	20%	Rs. 12,00,000 – Rs. 15,00,000	20%	No Change
Above Rs. 15,00,000	30%	Above Rs. 15,00,000	30%	No Change

Increased Standard Deduction for FY 2024-25 (AY 2025-26)

The Budget 2024 brought welcome news for salaried individuals with an increase in the standard deduction to Rs. 75,000 for AY 2025-26, up from Rs. 50,000 in AY 2024-25.

Since the standard deduction is available to all salaried taxpayers regardless of their income level, this additional Rs. 25,000 could translate to tax savings of Rs. 7,500 (excluding cess) for those in the highest 30% tax bracket. Notably, this benefit does not require any tax-saving investments. However, self-employed individuals, self-employed professionals, and non-individual taxpayers such as Hindu Undivided Families (HUFs) are not eligible for this deduction.

Other Notable Points for Income Tax Slabs and Rates for AY 2025-26 (FY 24-25)

1. Surcharge and Cess: The income tax rates outlined above do not include the surcharge and health and education cess. A 4% health and education cess is applicable on the total tax payable. For incomes exceeding Rs. 50 lakh in FY 2024-25, the surcharge applies as follows:

Annual Taxable Income	Surcharge on Income Tax (Old Tax Regime)	Surcharge on Income Tax (New Tax Regime)
Up to Rs. 50 Lakh	Nil	Nil
Over Rs. 50 Lakh and up to Rs. 1 Crore	10%	10%
Over Rs. 1 Crore and up to Rs. 2 Crore	15%	15%
Over Rs. 2 Crore and up to Rs. 5 Crore	25%	25%
Over Rs. 5 Crore	37%	25%

As evident, the maximum surcharge under the new tax regime is capped at 25%, whereas, the maximum surcharge payable under the old tax regime for AY 2025-26 is 37%.

2. Gender Neutrality: The income tax slabs and rates are identical for both male and female taxpayers.

3. Tax Rebate:

Old Tax Regime: If your taxable income falls below Rs. 5 lakh in FY 2024-25, you are eligible for a tax rebate of up to Rs. 12,500 under Section 87A.
New Tax Regime: If your annual taxable income is up to Rs. 7 lakh, you are eligible for a similar 100% tax rebate under Section 87A.

15 key Income Tax rule changes in 2024 that will influence ITR filing in 2025

The Union Budget 2024 brought several changes to income tax rules that will significantly impact taxpayeRs. As you prepare to file your Income Tax Returns (ITR) for FY 2024-25, understanding these changes is crucial to optimize your tax liability. Here’s an overview of the key updates, along with their potential implications.

1. New Income Tax Slabs Under the New Tax Regime

The government has revamped the income tax slabs under the new tax regime, enabling taxpayers to save up to Rs. 17,500 annually.

New Slabs for FY 2024-25:
- Up to Rs. 3,00,000: Nil
- Rs. 3,00,001 to Rs. 6,00,000: 5%
- Rs. 6,00,001 to Rs. 9,00,000: 10%
- Rs. 9,00,001 to Rs. 12,00,000: 15%
- Rs. 12,00,001 to Rs. 15,00,000: 20%
- Above Rs. 15,00,000: 30%

2. Standard Deduction Limit Increased

For those opting for the new tax regime, the standard deduction has been increased:

Salaried individuals: From Rs. 50,000 to Rs. 75,000.
Family pensioners: From Rs. 15,000 to Rs. 25,000.

3. Higher Deduction on Employer's NPS Contribution

The employer's contribution to the National Pension System (NPS) now allows deductions of up to 14% of the basic salary under the new tax regime, compared to 10% previously.

4. Revised Tax Rates for LTCG and STCG

Changes in capital gains taxation include:

Short-term capital gains (STCG) on equity: Increased from 15% to 20%.
Long-term capital gains (LTCG) on equity-oriented mutual funds: Exempt up to Rs. 1.25 lakh, raised from Rs. 1 lakh.
LTCG from other assets (e.g., real estate, gold): Taxed uniformly at 12.5%, with an option for indexation benefits for houses purchased before July 22, 2024.

5. New Holding Period Rules for Capital Gains

The categorization of capital gains as long-term or short-term now depends on simplified holding periods:

Listed securities: 12 months for long-term gains.
Unlisted securities: 24 months for long-term gains.

6. Rationalization of TDS Rates

The government has standardized TDS rates for several incomes. Key changes include:

Insurance commissions (non-company): 2%.
Payment of rent by HUFs/individuals: 2%.
E-commerce transactions: 0.1%.
These changes ensure simpler compliance and more consistency.

7. Claiming TDS/TCS Credits on Salaries

Taxpayers can now claim TDS and TCS credits on other incomes against salary income to reduce the tax deduction amount. This change offers salaried individuals better cash flow management.

8. TCS Credit Transfer

From January 1, 2025, parents or guardians can claim Tax Collected at Source (TCS) credits for payments made on behalf of their children, such as tuition fees for foreign education.

9. Taxation of Share Buybacks

The amended law now taxes proceeds from share buybacks in the hands of shareholders at their applicable income tax slab rate. Previously, companies paid Dividend Distribution Tax (DDT) on buybacks at 20%.

10. TCS on Notified Luxury Goods

Luxury goods purchases exceeding Rs. 10 lakh will attract TCS from January 2025. The specific list of luxury items and implementation details are awaited.

11. Updated TDS Rules for Property Sales

Buyers must deduct TDS from the total payment made to sellers if the property's sale value exceeds Rs. 50 lakh, even if the seller’s share is less than Rs. 50 lakh. This rule closes a potential loophole in property transactions.

12. TDS on RBI Floating Rate Bonds

Interest earned on RBI Floating Rate Bonds will now attract TDS if it exceeds Rs. 10,000 per month. This amendment ensures tax compliance for high-value interest income.

13. Vivad Se Vishwas Scheme 2.0

The revamped scheme facilitates resolution of pending tax litigations. Taxpayers can settle disputes with the Income Tax Department under this initiative, applicable from October 2024.

14. Aadhaar Enrollment Number Discontinued

From October 2024, quoting Aadhaar enrollment numbers in ITR or PAN applications will no longer be accepted. Taxpayers must have a valid Aadhaar number for these purposes.

15. Reduced Time Limit for Reopening Old ITRs

The Income Tax Department has reduced the time frame for reopening old ITRs from 10 years to 5 years if the income escaping assessment exceeds Rs. 50 lakh. This change reduces tax-related uncertainties for individuals.

Here's how income tax slab rates have changed for FY 2024-25

The Income Tax Slab Rates for the Financial Year 2024-25 have been updated, introducing modifications aimed at providing relief to taxpayers. These changes encompass adjustments to tax brackets and rates, potentially impacting various income groups. Explore the key updates to better understand your tax liabilities.

Income tax slabs for Hindu Undivided Family (HUF) for AY 2025-2026

The income tax rates for resident individuals and Hindu Undivided Families (HUFs) for the current fiscal year have been announced, featuring adjustments to provide tax relief and streamline fiscal responsibilities. These changes are designed to benefit a broad range of taxpayers.

Old Tax Regime			New Tax Regime u/s 115BAC
Income Tax Slab	Income Tax Rate	*Surcharge	Income Tax Slab	Income Tax Rate
Up to Rs. 2,50,000	Nil	Nil	Up to Rs. 3,00,000	Nil
Rs. 2,50,001 - Rs. 5,00,000**	5% above Rs. 2,50,000	Nil	Rs. 3,00,001 - Rs. 7,00,000**	5% above Rs. 3,00,000
Rs. 5,00,001 - Rs. 10,00,000	Rs. 12,500 + 20% above Rs. 5,00,000	Nil	Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000
Rs. 10,00,001- Rs. 50,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	Nil	Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000
Rs. 50,00,001- Rs. 1,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	10%	Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000
Rs. 1,00,00,001- Rs. 2,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	15%	Rs. 15,00,001- Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000
Rs. 2,00,00,001- Rs. 5,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	25%	Rs. 50,00,001- Rs. 1.00,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000
Above Rs. 5,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	37%	Rs. 1,00,00,001- Rs. 2,00,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000
			Above Rs. 2,00,00,001	Rs. 1,40,000 + 30% above Rs. 15,00,000

Income tax slabs for Non-Resident Individual (AY 2025-26)

The latest income tax rates for non-resident individuals have been released, reflecting adjustments tailored to align with global taxation standards. These changes are crucial for non-residents to understand in order to comply with Indian tax regulations and optimize their fiscal planning.

Old Tax Regime			New Tax Regime u/s 115BAC
Income Tax Slab	Income Tax Rate	*Surcharge	Income Tax Slab	Income Tax Rate	*Surcharge
Up to Rs. 2,50,000	Nil	Nil	Up to Rs. 3,00,000	Nil	Nil
Rs. 2,50,001 - Rs. 5,00,000	5% above Rs. 2,50,000	Nil	Rs. 3,00,001 - Rs. 7,00,000	5% above Rs. 3,00,000	Nil
Rs. 5,00,001 - Rs. 10,00,000	Rs. 12,500 + 20% above Rs. 5,00,000	Nil	Rs. 7,00,001 - Rs. 10,00,000	Rs. 20,000 + 10% above Rs. 7,00,000	Nil
Rs. 10,00,001- Rs. 50,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	Nil	Rs. 10,00,001 - Rs. 12,00,000	Rs. 50,000 + 15% above Rs. 10,00,000	Nil
Rs. 50,00,001- Rs. 1,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	10%	Rs. 12,00,001 - Rs. 15,00,000	Rs. 80,000 + 20% above Rs. 12,00,000	Nil
Rs. 1,00,00,001- Rs. 2,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	15%	Rs. 15,00,001- Rs. 50,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	Nil
Rs. 2,00,00,001- Rs. 5,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	25%	Rs. 50,00,001- Rs. 1,00,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	10%
Above Rs. 5,00,00,000	Rs. 1,12,500 + 30% above Rs. 10,00,000	37%	Rs. 1,00,00,001- Rs. 2,00,00,000	Rs. 1,40,000 + 30% above Rs. 15,00,000	15%
			Above Rs. 2,00,00,001	Rs. 1,40,000 + 30% above Rs. 15,00,000	25%

Income tax rate for AOP/BOI/Artificial Judicial Person under new income tax regime

Listed below are Income Tax Rate for AOP/BOI/Artificial Judicial Person:

Income Tax Slabs (Rs)	Rate of Tax under Old Regime
Rs. 0.0 to Rs. 2,50,000	NIL
Rs. 2,50,001 to Rs. 5,00,000	5%
Rs. 5,00,001 to Rs. 10,00,000	20%
Above Rs. 10,00,000	30%

Tax slabs for domestic company for AY 2025-26

The updated income tax rates for domestic companies have been set, reflecting efforts to support business growth and economic stability within India. These rates are critical for companies to understand as they plan their financial strategies and fulfill their tax obligations effectively.

Condition	Income Tax Rate (excluding surcharge and cess)
Total Turnover or Gross Receipts during the previous year 2020-21 does not exceed Rs. 400 crores	25%
If opted for Section 115BA	25%
If opted for Section 115BAA	22%
If opted for Section 115BAB	15%
Any other Domestic Company	30%

Surcharge, marginal relief, and health & education cess

What is surcharge?

Surcharge is an additional tax levied on individuals earning above certain income thresholds. It is calculated as a percentage of the income tax determined based on applicable tax rates.

7% on taxable income above Rs. 1 crore and up to Rs. 10 crore
12% on taxable income above Rs. 10 crore
10% for companies opting for taxability under Section 115BAA or Section 115BAB

What is Marginal Relief?

Marginal Relief is a mechanism that limits the surcharge payable. If the surcharge amount exceeds the additional income earned that triggers the surcharge liability, the surcharge payable is capped at the amount of that additional income.

For income exceeding Rs. 1 crore: Surcharge cannot exceed the amount of income earned above Rs. 1 crore.
For income exceeding Rs. 10 crore: Surcharge cannot exceed the amount of income earned above Rs. 10 crore.

What is Health and Education Cess?

Health and Education Cess is a 4% cess levied on the total income tax amount, including any applicable surcharge.

Notes:

Minimum Alternate Tax (MAT): Companies are liable to pay MAT at 15% of their book profit (plus surcharge and Health & Education Cess) if their normal tax liability is less than 15% of their book profit.
MAT for International Financial Services Centre (IFSC) Units: IFSC units deriving income solely in convertible foreign exchange are liable to pay MAT at 9% (plus cess and surcharge).
Companies opting for special rate taxation under Sections 115BAA and 115BAB are exempt from MAT.
Companies opting for special rate taxation under Sections 115BAA or 115BAB are not allowed certain deductions, except for deductions under Sections 80JJAA and 80M.

Income tax rate for partnership firm or LLP as per old/new regime

For Partnership Firm and LLP, the income tax rate is 30% on net profit. Surcharge is levied at 12.5% if income exceeds Rs. 1 crore. Additionally, a 4% Health & Education Cess is applicable. Minimum Alternate Tax (MAT) is 18.5% of adjusted total income.

Income tax rate for foreign company under new income tax regime

Foreign companies operating in India are subject to specific income tax rates, which are generally structured to align with international standards and foster a favorable investment climate. These rates are crucial for multinational corporations to understand, as they impact financial planning and compliance with Indian tax regulations.

Nature of Income	Tax Rate
Royalty received from the Government or an Indian concern according to an agreement post-March 31, 1961, but before April 1, 1976; or fees for technical services from an agreement post-February 29, 1964, but before April 1, 1976, approved by the Central Government	50%
Any other income	40%

Additional Notes:

Surcharge: Imposed based on total income levels:
Rs. 1 Crore to 10 Crores: 2%
Above Rs. 10 Crore: 5%
Health & Education Cess: 4% on the total tax.
MAT (Minimum Alternate Tax): Applicable as per section 115JB.

For individuals, Hindu Undivided Families (HUF), and Non-Resident Indians (NRIs) below the age of 60, the income tax exemption limit is set at a maximum of Rs 2,50,000. This means that any income earned within this threshold will not be subject to income tax.

However, it is essential to note that surcharge and cess will still be applicable on the tax amount. These additional charges are discussed separately.

Furthermore, an additional 4% Health & Education Cess will be levied on the total tax and surcharge amount. This cess is a further contribution towards the country's healthcare and education initiatives.

Income Slabs	Individuals of Age < 60 Years and NRIs
Up to Rs 2,50,000	NIL
Rs 2,50,001 - Rs 5,00,000	5%
Rs 5,00,001 to Rs 10,00,000	20%
Rs 10,00,001 and above	30%

Conditions for Opting for the New Tax Regime

Taxpayers choosing the new regime will forego certain deductions and exemptions available under the old regime.

Common Deductions & Exemptions Not Allowed:

Leave Travel Allowance (LTA)
Conveyance AllowanceHouse Rent Allowance (HRA)
Relocation Allowance
Children Education Allowance
Professional TaxDaily Expenses in the Course of Employment
Helper Allowance
Deductions under Chapter VI-A (e.g., 80C, 80D, 80E), except for Section 80CCD(2)
Standard Deduction on Salary
Interest on Housing Loan (Section 24)
Other Special Allowances (Section 10(14))

Also read: What is direct tax code

What are the Exemptions/Deductions unavailable under the new tax regime in FY 24-25?

The 2020 budget significantly revised the tax structure by removing approximately 70 of the 100 exemptions previously available under the new tax regime. Opting for the new income tax brackets 24-25 for tax calculation means foregoing several critical exemptions and deductions, including:

House Rent Allowance (HRA): Previously deductible under Section 10 (13A), this allowance helped employees reduce taxable income by the amount paid for rented accommodation.
Leave Travel Allowance (LTA): Section 10(5) provided a deduction for expenses on travel while on leave, which is no longer available under the new regime.
Specific Allowances: Allowances exempt under Section 10(14), including conveyance and children's education allowance, are not deductible in the new tax regime.
Tax-Free Perquisites: Benefits such as food coupons and other tax-free allowances that were exempt from tax will now be included in taxable income.
Chapter VI A Deductions: Significant deductions like those under Section 80C (investments), 80D (medical insurance), 80TTA (savings interest), etc., are not available.
Home Loan Interest Deduction: The deduction for interest paid on home loans for self-occupied property under Sections 24(b) and Section 80EEA will no longer reduce taxable income in the new regime.

What Exemptions/Deductions are Available under the New Tax Regime in FY 24-25?

Under the new income tax brackets 24-25, taxpayers can still avail of certain deductions and exemptions, despite the removal of many previously available ones. These include:

NPS Contributions by Employer: Contributions to the National Pension System (NPS) by an employer, up to 10% of the salary of the employee (and 14% for Central Government employees), are deductible under Section 80CCD(2).
Standard Deduction on Rental Income: For rented-out property, a standard deduction of 30% of the net rental income is allowed, simplifying the calculation of taxable income from house property.
Home Loan Interest: Interest paid on a home loan for a let-out property can be deducted from the rental income earned, although a loss from house property cannot be offset against other income heads.
Transport Allowance for Divyang Employees: Divyang (disabled) employees are eligible for a transport allowance exemption to cover daily travel expenses between their workplace and home.
Conveyance Allowance: Expenses incurred on conveyance for official duties are permissible as a conveyance allowance.
Allowances for Travel and Transfer: Allowances provided to employees for the costs associated with travel on tour or transfer are exempt.
Daily Allowance: A daily allowance received to cover ordinary day-to-day expenses while away from the normal place of duty is also allowed.

Deductions: Old Tax Regime vs. New Tax Regime (Section 115BAC) for FY 2024-25

This table outlines the key differences in available deductions between the Old Tax Regime and the New Tax Regime (Section 115BAC) for the financial year 2024-25.

Deduction/Exemption	Old Regime	New Regime (Section 115BAC)
Section 80C (Investment in PPF, NSC, Life Insurance Premium, ELSS, etc.)	Available up to Rs. 1.5 lakh	Not available
Section 80D (Health insurance premium)	Available	Not available
Standard Deduction (for salaried individuals)	Rs. 50,000	Rs. 75,000 (FY 2024-25) and Rs. 50,000 (FY 2023-24)
House Rent Allowance (HRA)	Available (based on actuals)	Not available
Leave Travel Allowance (LTA)	Available	Not available
Interest on Housing Loan (Section 24) (for self-occupied property)	Deduction up to Rs. 2 lakh	Not available
Section 80E (Interest on education loan)	Available	Not available
Section 80G (Donations to charitable institutions)	Available	Not available

Benefits and drawbacks of New Tax Regime

Choosing between India's new and old tax regimes involves weighing their respective advantages and disadvantages against your financial habits, income level, and investment strategy. Here's a breakdown to help guide your decision:

Benefits of the New Tax Regime:

Simplified Tax Process: With fewer deductions and exemptions, the new regime streamlines tax filing, benefiting those overwhelmed by the complexity of the old regime.
Reduced Tax Rates: For individuals earning up to Rs. 7 lakhs, the new regime often provides lower tax rates, potentially increasing your net income.
Tax Rebate Advantage: Earnings up to Rs. 7 lakhs qualify for a full tax rebate, resulting in zero tax liability under the new regime.
Enhanced Liquidity: The absence of compulsory tax-saving investments increases available cash for other financial purposes.

Drawbacks of the New Tax Regime:

Loss of Deductions and Exemptions: Opting for the new regime means missing out on several key deductions and exemptions (e.g., HRA, LTA), which could raise your taxable income.
Reduced Financial Planning Flexibility: The elimination of deductions limits opportunities to strategically lower your tax obligations through targeted investments and expenditures.
Potentially Higher Taxes for Higher Earners: Individuals with incomes over Rs. 10 lakhs might find themselves subject to higher taxes under the new regime, especially when including surcharges on incomes above Rs. 5 crores.
Disadvantages for Long-Term Savers: The new regime may not suit those who depend on tax-saving investments for wealth accumulation, as it excludes these benefits.

Additional Considerations:

Regime Switching Flexibility: Taxpayers have the annual option to choose between regimes at tax filing, offering a chance to adjust as financial circumstances change.
Careful Comparison is Key: Evaluating your tax obligations under both regimes can clarify which option minimises your tax liability, with tools like online tax calculators providing assistance.
Plan According to Future Financial Goals: Consider potential income growth and investment objectives in your regime choice.
Seek Professional Advice: A tax advisor can offer tailored recommendations, ensuring your tax strategy aligns with your overall financial landscape.

Also read: Direct Tax Code vs Income Tax Act

How to Calculate Income Tax for Income Tax Slabs for FY 24-25 (AY 2025-26)

To illustrate the process of income tax calculation, let's take the example of Anjali, a salaried individual with an annual income of Rs. 9,00,000. Anjali is eligible for deductions under Section 80C amounting to Rs. 2,00,000. The calculation of her income tax involves a few key steps:

1. Calculating Gross Taxable Income

Anjali's gross taxable income is determined by subtracting the eligible deductions from her total income. This calculation is as follows:

Total annual income: Rs. 9,00,000Less
deductions under Section 80C: Rs. 2,00,000
Gross taxable income: Rs. 9,00,000 - Rs. 2,00,000 = Rs. 7,00,000

With a gross taxable income of Rs. 7,00,000, the next step is to apply the appropriate tax slabs.

2. Understanding the Applicable Tax Slabs

The income tax rates for the financial year 2023-24 are structured as follows:

Up to Rs. 2,50,000: 0% (no tax)
Rs. 2,50,001 to Rs. 5,00,000: 5%
Rs. 5,00,001 to Rs. 10,00,000: 20%
Above Rs. 10,00,000: 30%

Anjali's gross taxable income of Rs. 7,00,000 falls within the Rs. 5,00,001 to Rs. 10,00,000 range, meaning the applicable tax rate is 20% for the amount exceeding Rs. 5,00,000.

3. Calculating the Income Tax

To calculate Anjali's income tax liability:

The first Rs. 2,50,000 of her income is tax-free.
The next Rs. 2,50,000 (from Rs. 2,50,001 to Rs. 5,00,000) is taxed at 5%, resulting in a tax of Rs. 12,500 (5% of Rs. 2,50,000).
The remaining Rs. 2,00,000 (from Rs. 5,00,001 to Rs. 7,00,000) is taxed at 20%, amounting to Rs. 40,000 (20% of Rs. 2,00,000).

The total tax liability is thus Rs. 12,500 + Rs. 40,000 = Rs. 52,500.

4. Consideration of Surcharge and Rebate

Since Anjali's income does not exceed Rs. 50 lakhs, no surcharge applies. Additionally, she is not eligible for the Section 87A rebate, as her taxable income is above Rs. 5,00,000.

Therefore, for the financial year 2023-24, Anjali’s total income tax liability amounts to Rs. 52,500.

How to calculate income tax liability under old tax regime?

Calculating income tax liability under the old tax regime involves understanding the income tax slabs, deductions, and exemptions applicable for the financial year. The old tax regime allows taxpayers to claim various deductions, such as those under Section 80C, HRA, and standard deductions, which help reduce the taxable income. Here’s a step-by-step guide on calculating income tax liability under the old tax regime.

1. Determine Gross Total Income

Gross total income is the sum of all income sources, including salary, house property, capital gains, business or profession, and other sources like interest income. This forms the basis for further calculations.

2. Apply Deductions and Exemptions

Deductions such as Section 80C (investments in ELSS, PPF, etc.), Section 80D (medical insurance), and others can be claimed. Common exemptions include House Rent Allowance (HRA), Leave Travel Allowance (LTA), and the standard deduction of Rs. 50,000. Subtract these from the gross total income to calculate the net taxable income.

3. Identify the Applicable Tax Slabs

The old tax regime has different slabs based on the taxpayer’s age group:

Individuals below 60 years
Senior citizens (60-79 years)
Super senior citizens (80 years and above).

Surcharge on income tax

A surcharge on income tax is an additional charge levied on the tax liability of individuals and entities whose income exceeds specified thresholds. It is calculated as a percentage of the total income tax payable and aims to increase tax revenues from high-income earners. The surcharge rates vary depending on the income level, with higher rates applying to larger incomes. This mechanism ensures a progressive tax structure where those with higher earnings contribute a larger share to the tax pool.

1. Surcharge Rates for Individual Taxpayers

For individuals, the surcharge rates are based on income brackets:

Income between Rs. 50 lakh and Rs. 1 crore attracts a surcharge of 10%.
Income above Rs. 1 crore but up to Rs. 2 crore is subject to a 15% surcharge.
For income exceeding Rs. 2 crore but below Rs. 5 crore, the surcharge is 25%.
Income above Rs. 5 crore incurs the highest surcharge rate of 37%.

However, under the new tax regime, the highest surcharge rate is capped at 25%, even for incomes above Rs. 5 crore. This cap aims to limit the tax burden on ultra-high-income earners while maintaining a progressive tax system.

2. Surcharge Applicability for Other Taxpayers

Apart from individuals, the surcharge is also applicable to companies and other entities. For domestic companies, the surcharge is 7% if the income exceeds Rs. 1 crore but is less than Rs. 10 crore. A 12% surcharge applies if the income surpasses Rs. 10 crore. Foreign companies face different surcharge rates, with 2% for income between Rs. 1 crore and Rs. 10 crore, and 5% for income above Rs. 10 crore. This graded approach to surcharge rates helps ensure that higher-income entities contribute a fair share to the tax revenue.

Tips for Choosing Between the Old and New Income Tax Regimes

When choosing between the old and new income tax regimes, taxpayers should carefully evaluate their specific circumstances to determine which option is more beneficial. Here are five tips to help in the decision-making process:

Calculate your taxable income: Estimate your total income and subtract available deductions and exemptions to determine your taxable income under both regimes. This will help you compare the tax liability under each regime.
Consider your ability to claim deductions: If you can claim significant deductions under Section 80C, 80D, and other sections, the old regime may be more advantageous as it allows you to reduce your taxable income. However, if you cannot claim substantial deductions, the new regime may be more suitable.
Understand the impact of forfeiting deductions: Opting for the new regime means forfeiting several deductions and exemptions available in the old regime, such as HRA, standard deduction, and deductions under Sections 80C, 80D, and 80TTA. Evaluate how this will affect your overall tax liability.
Factor in future plans: Consider your long-term financial goals and plans, such as investing in tax-saving instruments or claiming deductions for medical expenses. The old regime may be more beneficial if you anticipate needing these deductions in the future.
Consult with a tax professional: Seek guidance from a tax professional who can help you analyze your specific situation, consider future plans, and provide personalized advice on which regime is more suitable for you.

By carefully considering these factors and seeking professional advice, taxpayers can make an informed decision between the old and new income tax regimes and optimize their tax savings.

Different types of Taxable Income in India

In India, various sources of income are subject to taxation. Understanding the different types of taxable income is crucial for accurate tax filing and compliance.

Taxable income sources in India include:

Business Income
Business income refers to profits earned from business activities, including self-employment, consultancy, or any commercial venture. This income is taxable under the Income Tax Act and is subject to applicable tax rates based on the nature of the business.
Salary or Pension
Income earned as salary or pension from employment is a common taxable income source. This includes basic salary, allowances, bonuses, and other perks received by individuals working in various sectors. Pension income received after retirement is also taxable.
Property Income
Income generated from property ownership, such as rental income from letting out residential or commercial properties, is taxable. Additionally, income from house property, including deemed rental income from self-occupied property, falls under this category.
Capital Gains Income
Capital gains arise from the sale of capital assets like stocks, real estate, or mutual funds. These gains can be categorised as short-term or long-term based on the holding period of the asset. Capital gains tax is applicable as per the prevailing tax laws.
Lottery, Races, and More Income
Income from sources like lotteries, horse races, card games, gambling, or any other speculative activities is considered taxable. Such income falls under the category of 'Income from Other Sources' and is subject to taxation at applicable rates.

Understanding the various taxable income sources is essential for taxpayers to accurately report their income, claim deductions, and comply with tax regulations. Proper documentation and adherence to tax laws can help individuals manage their tax liabilities effectively and avoid any penalties or legal issues related to tax evasion.

Tax Benefits of ELSS Funds in Budget 2024

Equity Linked Savings Scheme (ELSS) funds are a top investment choice for both salaried individuals and the self-employed, offering significant tax savings under Section 80C of the Income Tax Act. These funds are the only mutual funds eligible for tax deductions under this section, allowing investors to claim deductions up to Rs 1.5 lakh by investing in various tax-saving options. If Finance Minister Nirmala Sitharaman raises the Section 80C limit in her Budget 2024 presentation on July 23, investors in ELSS mutual funds stand to gain significantly. ELSS funds have a low lock-in period of just three years, shorter than other Section 80C investments, and provide high earning potential by investing in equity markets.

How to know which income tax slab you fall in?

To determine which income tax slab you fall into in India as of 2024, you need to assess your annual income and choose between the old and new tax regimes. Each regime has different rates and benefit.

Old Tax Regime

Deductions and Exemptions: This regime allows for various deductions and exemptions, such as those under Section 80C (investments in PPF, life insurance, etc.), 80D (medical insurance), and otheRs.
Tax Slabs:
- Income up to Rs. 2.5 lakh: Nil
- Income between Rs. 2.5 lakh and Rs. 5 lakh: 5%
- Income between Rs. 5 lakh and Rs. 10 lakh: 20%
- Income above Rs. 10 lakh: 30%
Additional Considerations: Standard deductions, House Rent Allowance (HRA), and Leave Travel Allowance (LTA) can further reduce taxable income.

New Tax Regime

Limited Deductions: This regime offers lower tax rates but with limited deductions and exemptions.
Tax Slabs:·
- Rs. 0- Rs. 3 lakh - Nil: If your annual income is between Rs. zero and Rs. 300,000, you don't pay any income tax.
- Rs. 3-7 lakh - 5%: If your income is between Rs. 300,001 and Rs. 700,000, you pay 5% tax on the amount exceeding Rs. 300,000.
- Rs. 7-10 lakh - 10%: If your income is between Rs. 700,001 and Rs. 1,000,000, you pay 10% tax on the amount exceeding Rs. 700,000.
- Rs. 10-12 lakh - 15%: If your income is between Rs. 1,000,001 and Rs. 1,200,000, you pay 15% tax on the amount exceeding Rs. 1,000,000.
- 12-15 lakh - 20%: If your income is between Rs. 1,200,001 and Rs. 1,500,000, you pay 20% tax on the amount exceeding Rs. 1,200,000.
- Above Rs. 15 lakh - 30%: If your income is above Rs. 1,500,000, you pay 30% tax on the amount exceeding Rs. 1,500,000.

TaxRebate: A rebate under Section 87A is available for individuals earning up to Rs. 7 lakh, resulting in no tax liability.

Key Differences:

Deductions: The primary difference lies in the availability of deductions and exemptions. The old regime allows for a wider range, while the new regime has limited options.
Tax Rates: The new regime generally offers lower tax rates compared to the old regime.
Simplicity: The new regime is simpler to calculate as it doesn't involve multiple deductions and exemptions.

Choosing the Right Regime:

Individuals need to carefully assess their financial situation and tax liabilities to determine which regime is more beneficial for them. Factors to consider include income level, available deductions, and investment patterns. It's advisable to consult with a tax professional or financial advisor for personalized guidance.

Also read: What is the direct tax code 2025

Conclusion

In conclusion, understanding the income tax slabs for the financial year 2024-25 in both the new and old tax regimes provides individuals with valuable insights into their tax obligations. The choice between the new and old regimes hinges on various factors such as income levels, available deductions, and personal financial goals. While the new regime offers lower tax rates with fewer deductions, the old regime provides a more traditional approach with higher tax rates but allows for a broader range of deductions. Ultimately, taxpayers must evaluate their unique circumstances and preferences to make informed decisions regarding which tax regime aligns best with their financial objectives. Regardless of the chosen regime, staying informed about the prevailing tax regulations remains essential for effective tax planning and compliance.

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