New Tax Regime vs Old Tax Regime: Income Tax Slab
The Government of India has revised the New Tax Slab under budget 2025, introducing updated income tax slabs. Under the latest changes, individuals earning up to ₹12,00,000 will have zero tax liability.
Meanwhile, there are no changes in the Old Tax Regime. Taxpayers must choose between the Old Tax Regime and the New Tax Regime when filing their income tax return (ITR).
Old Tax Regime
Under Old Tax regime, there are over 70 exemptions and deductions available
Major Deductions
- Standard Deduction: Rs 50,000
- Rebate u/s 87A: Rs 12,500
- HRA Exemption
- Leave Travel Allowance
- Interest on Home Loan
- Deduction u/s 80C
- Employer’s contribution to NPS
- Employee’s contribution to NPS
Old Tax slabs
| Income tax slabs (Rs) | Income tax rates (%) |
|---|---|
| 0 to 2,50,000 | 0 |
| 2,50,001 to 5,00,000 | 5% |
| 5,00,001 to 10,00,000 | 20% |
| 10,00,001 and above | 30% |
Read also: Top Banks in India by Market Capitalization in 2025: Private & Govt.
New Tax Regime(FY 2025-26)
Under new tax regime there will be no effective tax up to Rs. 12 Lacs. it will be default tax slab unless individual select old tax.
Major Deductions
- Standard Deduction: Rs. 75,000
- Rebate u/s 87A: Rs. 25,000
- Employer’s contribution to NPS
New Tax slabs(FY 2025-26)
| Income tax slabs (Rs) | Income tax rates (%) |
|---|---|
| 0 to 4,00,000 | 0 |
| 4,00,001 to 8,00,000 | 5% |
| 8,00,001 to 12,00,000 | 10% |
| 12,00,001 to 16,00,000 | 15% |
| 16,00,001 to 20,00,000 | 20% |
| 20,00,001 to 24,00,000 | 25% |
| 24,00,001 and above | 30% |
New Tax slabs(FY 2024-26)
| Income tax slabs (Rs) | Income tax rates (%) |
|---|---|
| 0 to 3,00,000 | 0 |
| 3,00,001 to 7,00,000 | 5% |
| 7,00,001 to 10,00,000 | 10% |
| 10,00,001 to 12,00,000 | 15% |
| 12,00,001 to 15,00,000 | 20% |
| 15,00,001 and above | 30% |
Source: Income Tax
