The government has introduced new income tax slabs for the financial year 2025-26, significantly altering the tax rates and benefits. With the new tax structure, individuals earning up to ₹12 lakh annually will not be liable to pay any income tax, thanks to rebates and revised slab rates. Here’s a detailed breakdown of the changes and how they impact taxpayers.
Key Highlights of the New Tax Regime
- 0% tax on income up to ₹12 lakh (₹12.75 lakh for salaried employees)
- No tax for individuals earning ₹1 lakh per month
- Revised slab rates for incomes above ₹12 lakh
- New tax slabs with reduced tax rates compared to the previous structure
Revised Income Tax Slabs for FY 2025-26
Below are the revised tax slabs that will apply to individuals based on their annual income:
| Income Slab (₹) | Tax Rate (%) |
|---|---|
| 0 – 4 lakh | Nil |
| 4 – 8 lakh | 5% |
| 8 – 12 lakh | 10% |
| 12 – 16 lakh | 15% |
| 16 – 20 lakh | 20% |
| 20 – 24 lakh | 25% |
| Above 24 lakh | 30% |
Tax Benefits and Savings
With the new tax slabs, individuals earning up to ₹12 lakh will get full tax rebate benefits. The following table compares the previous and revised tax rates, showcasing the savings:
| Income (₹) | Previous Tax (₹) | Proposed Tax (₹) | Benefit Per Slab (₹) | Rebate Benefit (₹) | Total Benefit (₹) | Tax Payable After Benefit (₹) |
| Up to 8 lakh | 30,000 | 20,000 | 10,000 | 20,000 | 30,000 | 0 |
| 9 lakh | 40,000 | 30,000 | 10,000 | 30,000 | 40,000 | 0 |
| 10 lakh | 50,000 | 40,000 | 10,000 | 40,000 | 50,000 | 0 |
| 11 lakh | 65,000 | 50,000 | 15,000 | 50,000 | 65,000 | 0 |
| 12 lakh | 80,000 | 60,000 | 20,000 | 60,000 | 80,000 | 0 |
| 16 lakh | 1,70,000 | 1,20,000 | 50,000 | 0 | 50,000 | 1,20,000 |
| 20 lakh | 2,90,000 | 2,00,000 | 90,000 | 0 | 90,000 | 2,00,000 |
| 24 lakh | 4,10,000 | 3,00,000 | 1,10,000 | 0 | 1,10,000 | 3,00,000 |
| 50 lakh | 11,90,000 | 10,80,000 | 1,10,000 | 0 | 1,10,000 | 10,80,000 |
The revised tax regime for FY 2025-26 brings significant relief to middle-class taxpayers, eliminating tax liability for individuals earning up to ₹12 lakh. The new slab structure ensures progressive taxation, reducing the burden on lower-income groups while maintaining higher tax rates for higher earners. Taxpayers should review these changes carefully to optimize their tax planning.
Tags: new income tax slabs, revised tax slabs 2025, tax benefits 2025, new tax regime India, income tax savings
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