Budget 2025: Tax slabs decoded! Nil tax on income upto 12 lakh; How much tax to pay if amount exceeds this threshold
Income Tax Rates 2025 for Senior Citizens Under New Regime: Finance Minister Nirmala Sitharaman, in the Union Budget 2025, announced a major revision in income tax slabs under the new tax regime, providing significant relief to middle-class taxpayers. As per the updated structure, individuals earning up to Rs 12 lakh per annum will not have to pay any income tax, offering a substantial benefit compared to previous years.
However individuals whose earnings surpass Rs 12 lakh per annum will have to pay income tax as per the below mentioned slabs.
Revised Income Tax Slabs Under New Tax Regime (FY 2025-26)
- Income up to Rs 4 lakh – No tax
- Rs 4 lakh – Rs 8 lakh – 5%
- Rs 8 lakh – Rs 12 lakh – 10%
- Rs 12 lakh – Rs 16 lakh – 15%
- Rs 16 lakh – Rs 20 lakh – 20%
- Rs 20 lakh – Rs 24 lakh – 25%
- Above Rs 24 lakh – 30%
Let’s take an example of a person earning Rs 13 lakh per annum in the new tax regime FY25-26. An individual earning Rs 13 lakh under the new tax regime in FY 2024-25 will have to nearly Rs 78,090 Rs in taxes. The individual will be taxed at 5% between 4-8 lakh bracket on Rs 3,25,000 (after deducting the Rs 75,000 standard deduction), which amounted to Rs 16,250. Additionally, they paid 10% on the Rs 8-12 lakh income bracket, totaling Rs 40,000, and 15% on the Rs 12-3 lakh slab, adding another Rs 15,000. A 4% cess on the total tax amount further contributed Rs 2850. In total, the tax liability stood at Rs 74,100,
Nil tax slab will apply for annual income up to Rs 12 lakh (Rs 12.75 lakh for salaried tax payers with standard deduction of Rs 75,000) under new tax regime.
New Tax Regime FY 24-25
Annual Income Range | Tax Rate (FY 2024-25) |
Up to Rs 3 lakh | Nil |
Rs 3 lakh – Rs 7 lakh | 5% |
Rs 7 lakh – Rs 10 lakh | 10% |
Rs 10 lakh – Rs 12 lakh | 15% |
Rs 12 lakh – Rs 15 lakh | 20% |
Above Rs 15 lakh | 30% |
An individual earning Rs 12 lakh under the new tax regime in FY 2024-25 was paying Rs 80,000 in taxes. Previously, the individual was taxed at 5% between 3-7 lakh bracket on Rs 3,25,000 (after deducting the Rs 75,000 standard deduction), which amounted to Rs 16,500. Additionally, they paid 10% on the Rs 7-10 lakh income bracket, totaling Rs 30,000, and 15% on the Rs 10-12 lakh slab, adding another Rs 30,000. A 4% cess on the total tax amount further contributed Rs 3,050.