The Union Budget 2025, applicable for FY 2025-26, introduces updated tax slabs and deductions under the new tax regime (Section 115BAC). With simplified structures and targeted benefits, many taxpayers are expected to shift from the old regime to the new one.
Tax Slabs for New Tax Regime (FY 2025-26):
| Income Range | Tax Rate |
|---|---|
| ₹0 to ₹4 lakh | Nil |
| ₹4 lakh to ₹8 lakh | 5% |
| ₹8 lakh to ₹12 lakh | 10% |
| ₹12 lakh to ₹16 lakh | 15% |
| ₹16 lakh to ₹20 lakh | 20% |
| ₹20 lakh to ₹24 lakh | 25% |
| Above ₹24 lakh | 30% |
Rebate Under Section 87A (FY 2025-26):
- Eligibility: Individuals with taxable income up to ₹12 lakh.
- Rebate Amount: Up to ₹60,000.
Key Deductions Available in the New Tax Regime:
- Standard Deduction: ₹75,000 for salaried individuals and pensioners.
- Employer’s NPS Contribution (Section 80CCD(2)): Up to 14% of salary for both government and private sector employees.
- Family Pension Deduction (Section 57(iia)): Up to ₹25,000.
- Interest on Home Loan (Section 24): Deduction for let-out properties.
- Specific Allowances: Transport allowance for specially-abled persons, conveyance, and daily allowances.
- Retirement Benefits Exemptions: Includes VRS, leave encashment, and gratuity.
Why More Taxpayers May Shift to the New Regime:
- Higher Standard Deduction: Simplifies tax calculations and offers consistent savings.
- Increased NPS Deduction: Makes retirement savings more rewarding.
- Simplified Structure: Eliminates the need for extensive tax planning and documentation.
- Favorable Slabs for Middle-Income Earners: Reduces tax liability for those earning between ₹4 lakh to ₹16 lakh.
Deductions Not Allowed in New Tax Regime:
- House Rent Allowance (HRA)
- Leave Travel Allowance (LTA)
- Section 80C (e.g., LIC, PPF, ELSS)
- Section 80D (Medical Insurance Premiums)
- Professional tax and entertainment allowance deductions.
Final Thoughts: With simplified slabs and higher rebates, the new tax regime is likely to attract a large number of taxpayers, especially salaried professionals. Taxpayers should evaluate their financial situation and consider consulting a tax advisor to determine the most beneficial option.
Note: This information reflects Union Budget 2025 updates and may be subject to future amendments.
thanks for info sir. please send me calculation of tax for next year. i have send my my salary slip