In the new tax regime, the government is not levying any tax on income up to Rs 12 lakh. Also, salary based people also get a standard deduction of Rs 75 thousand in the new tax regime, so those who choose the new tax regime in FY 2025-26, they will not have to pay any tax on income up to Rs 12.75 lakh.
The new financial year has started from 1 April. From this day onwards, the changes made in the budget in the new tax regime and the old tax regime have come into effect. Let us tell you that in the general budget presented on 1 February, Finance Minister Nirmala Sitharaman had made the tax zero for those earning up to Rs 12 lakh in the new tax regime.
In this budget, the old tax regime was kept as it is. In such a situation, the question arises whether the old tax regime is better or the new tax regime. Along with this, how can tax be saved in the new tax regime and how much benefit the taxpayer is going to get in this. If you also want to know all this, then we are telling about it in detail here.
Income Tax Slabs in New Tax Regime
| Income Tax Slab (in Rs) | Income Tax Rate (%) |
| 0-4,00,000 | 0 |
| 4,00,001-8,00,000 | 5 |
| 8,00,001-12,00,000 | 10 |
| 12,00,001-16,00,000 | 15 |
| 16,00,001-20,00,000 | 20 |
| 20,00,001-24,00,000 | 25 |
| 24,00,001 and above | 30 |
Standard Deduction in New Tax Regime
In the new tax regime, the government is not levying any tax on income up to Rs 12 lakh. Also, salary based people also get a standard deduction of Rs 75 thousand in the new tax regime, so those who choose the new tax regime in FY 2025-26. They will not have to pay any tax on income up to Rs 12.75 lakh. On the other hand, for those whose annual salary is between Rs 20 to 24 lakh, a new slab has come in the new tax regime, in which 25 percent tax has to be paid. Tax slab in old tax regime
TDS limit increased
- What has changed: The limit of TDS (tax deduction at source) has been increased on certain payments.
- TDS exemption on rental income doubled: The TDS limit on rental income has been increased from Rs 2.4 lakh to Rs 6 lakh.
- Exemption on interest income for senior citizens doubled: TDS limit for senior citizens earning interest income from bank FDs has been increased from Rs 50,000 to Rs 1 lakh.
- Increase in TDS limit on professional services: The TDS limit on professional services has now increased from Rs 30,000 to Rs 50,000.
- What will be the impact: This will reduce the TDS burden on low-income individuals and improve cash flow.
| Income Limit (₹) | Tax Rate (%) |
|---|---|
| Upto Rs 2,50,000 | Nil (no taxes) |
| 2,50,001 – 5,00,000 | 5% |
| 5,00,001 – 10,00,000 | 20% |
| More than 10,00,000 | 30% |
For whom is the old tax regime beneficial now?
There were no major changes to the slabs or exemptions of the Old Regime in Budget 2025. Income up to Rs 2.5 lakh will be tax-free, and slabs of 5%, 20%, and 30% will apply thereafter, while deductions such as 80C (1.5 lakh), 80D (25,000-50,000), and home loan interest (up to 2 lakh) will remain available. The Old Regime can still be beneficial if you avail HRA, home loans, or make large investments. If you live on rent, pay a home loan, or have large medical expenses, you may want to consider the Old Tax Regime.
If your income is more than 15 lakhs and you avail deductions, then the tax can be reduced in the old regime. The tax slabs may be less in the new regime, but the total tax may increase due to lack of exemptions. The investor should compare both on the basis of his income, expenses, and investments and choose the right option.
