The Union Budget for 2025 has brought significant reforms in the income tax structure, particularly under the new tax regime. Aimed at providing relief to the middle class, the budget introduces changes that reduce the tax burden, offering higher tax exemptions and revamped tax slabs.
Here’s a comprehensive breakdown of the key updates under the New Tax Regime for the Assessment Year (AY) 2025-26:
Tax Slabs Under the New Regime for AY 2025-26
The new tax regime offers simplified income tax slabs, with a focus on reducing the financial burden on middle-income earners. Here’s a detailed look at the new income tax slabs:
| Income Range (₹) | Tax Rate (%) |
|---|---|
| Up to ₹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% |
| Above ₹24,00,000 | 30% |
Key Highlights of the New Tax Regime 2025
No Tax on Income up to ₹12 Lakh: Income up to ₹12 lakh remains tax-free, making it beneficial for taxpayers with moderate incomes.
Income Tax Exemption Up to ₹4 Lakh: The basic exemption limit for income has been set at ₹4 lakh under the new regime.
Higher TDS Exemption on Rent: The TDS exemption limit on rent has been increased from ₹2.4 lakh to ₹6 lakh annually.
Tax Benefits for Salaried Employees: Salaried taxpayers with income up to ₹12.75 lakh will face no tax liability.
Senior Citizens’ Tax Deductions: The tax deduction limit for senior citizens has been doubled to ₹1 lakh, providing them with additional relief.
Budget 2025 Middle-Class Taxpayer Relief
The changes introduced under Budget 2025 are designed to ease the financial load on the middle class, offering them more disposable income. With reduced tax slabs and exemptions, it encourages savings and investments, while also stimulating the economy.
Additional Budget Reforms for 2025
Alongside the tax reforms, the Union Budget 2025 also includes measures that support growth in sectors like housing, agriculture, healthcare, and technology:
- Start-up Tax Benefits: Start-ups continue to benefit from tax exemptions for up to five years.
- Agriculture & Farmers: The government plans to increase the Kisan Credit Card loan limit to ₹5 lakh and launch initiatives to boost oilseed and cotton production.
- Healthcare: Daycare cancer centres will be set up in district hospitals across India, with plans for 200 centres by 2026.
- Infrastructure: The government will allocate ₹1.5 lakh crore in interest-free loans for infrastructure development across states.
Income Tax Slab for AY 2025-26
The income tax slabs for Assessment Year 2025-26 under both old and new regimes are designed to provide taxpayers with a structured and progressive way of paying taxes. Individuals earning below a specified threshold are exempt from tax, and the tax rate increases progressively with higher income.
Income Tax Slab for AY 2025-26 PDF
You can download the Income Tax Slab for AY 2025-26 PDF from the official website of the Income Tax Department. This PDF contains detailed information regarding the applicable tax rates for various income brackets, both under the new and old tax regimes.
New Tax Regime Slabs
The new tax regime for AY 2025-26 offers reduced tax rates with no exemptions or deductions. The tax slabs range from 0% to 30%, depending on the income level, and are structured to make tax payments simpler without claiming deductions.
New Tax Regime Calculator
A New Tax Regime Calculator helps taxpayers calculate their taxes under the new tax structure. By entering income details, this tool provides an estimate of the tax liability without considering exemptions or deductions. It simplifies tax calculation for individuals opting for the new regime.
New Tax Regime Exemption List
Under the new tax regime, most exemptions and deductions are not available. However, a few exemptions related to employer-provided housing or tax-saving bonds might still apply. It’s essential to check the official exemption list for clarity on any applicable exemptions.
Standard Deduction in New Tax Regime
The new tax regime does not provide the standard deduction of ₹50,000 typically available under the old regime. Taxpayers opting for the new regime forgo most deductions to benefit from reduced tax rates. It’s a straightforward option for those who do not wish to claim deductions.
Income Tax Calculator
An Income Tax Calculator is an online tool that helps individuals calculate their tax liability based on their income and applicable tax slabs. It is a useful tool for both the old and new tax regimes, providing taxpayers with an easy way to estimate their annual tax dues.
Old vs New Tax Regime Calculator
The Old vs New Tax Regime Calculator helps individuals compare their tax liabilities under both tax regimes. It calculates and compares the tax due under the traditional old regime (with deductions and exemptions) and the new regime (with lower rates but without deductions).
Conclusion
The new tax regime introduced under Budget 2025 aims to provide substantial relief to middle-class taxpayers by reducing their tax liabilities and offering a simpler, more straightforward taxation system.
With increased exemptions, revised tax slabs, and reforms in key sectors, the budget reflects the government’s focus on economic growth, financial empowerment, and a stronger middle class. Stay updated with all the latest details about the New Tax Regime 2025 and its benefits. very soon
