Test Income Tax Slabs FY 2021-22 (AY 2022-23) – New & Tax Rates for FY 2021-22/ FY 2020-21/ FY 2019-20

The income tax is a direct tax which follows a progressive slab rate, where the rate of tax increases as the taxpayer's income rises. The Income-tax Act, 1961 provides for two tax regimes: the old regime, which allows various deductions and exemptions, and the new regime, which offers lower tax rates without exemptions. Taxpayers have the option to choose the regime that best aligns with their financial profile and tax-saving strategies. In this article, we will explore the key differences between the old and new tax regimes to help you make an informed decision.

Budget 2025 Updates

The new Income Tax Bill has been tabled by the Honorable Finance Minister in the Lok Sabha. It aims to simplification and better presentation of the provisions.

As per the budget 2025, the income up to ₹ 12,00,000 will have zero tax liability for the FY 2025-26 (AY 2026-27) under the new tax regime. Here's how:

The revised tax slabs under the new regime for FY 2025-26 (AY 2026-27) are as follows:

Annual Income Tax Slabs	Income Tax Rates
Upto ₹ 4,00,000	NIL
₹ 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%
Above ₹ 24,00,000	30%

With the revised tax structure, individuals earning up to ₹ 12,00,000 will have no tax liability due to the increased rebate of ₹ 60,000. For salaried individuals, the tax liability will be zero for incomes up to ₹ 12,75,000, due to the ₹ 75,000 standard deduction.

Note:

• The marginal relief on rebate is still applicable. 
• The rebate is not available for income that is taxed at special rates (e.g., capital gains under section 112A).

An illustrative image on changes made in Budget 2025 is given below.

 

What is an Income Tax Slab?

In India, the Income Tax applies to individuals based on a slab system, where different tax rates are assigned to different income ranges. As the person's income increases, the tax rates also increase. This type of taxation allows for a fair and progressive tax system in the country. The income tax slabs are revised periodically, typically during each budget. These slab rates vary for different groups of taxpaye₹

Income Tax Slabs for FY 2024-25 (AY 2025-26) Under New Regime

The Budget 2024 introduced significant changes to the tax slabs under the New Tax Regime, which will be applicable for FY 2024-25 (AY 2025-26). Taxpayers can now benefit from revised tax slabs, along with an increased standard deduction and an enhanced family pension deduction.

Here’s a breakdown of the revised income tax slabs for FY 2024-25 under the new regime:

Note:

• Rebate: Tax rebate up to ₹25,000 is applicable if the total income does not exceed ₹ 7,00,000 (not applicable for NRIs). Therefore, no tax for an income up-to ₹7,00,000.
• Standard Deduction: The standard deduction for salaried employees is ₹ 75,000 under the new regime.
• Deduction under Family Pension: The deduction on family pension received has been increased from ₹ 15,000 to ₹ 25,000.
• NPS Contribution: The deduction limit on employer's contribution to NPS is 14% for FY 2024-25.

As a result of the above changes, a salaried employee in the new tax regime can save up to ₹ 17,500 in taxes. 

The new  regime is the default tax regime.  If individuals want to choose the old regime then they have to file Form 10-IEA. The highest surcharge rate is 25% under the new regime as opposed to 37% in the old regime.

Revised Income Tax Slabs Under the New Regime: Key Changes and Their Impact

The slab rates is modified by the government for FY 2024-25. This has resulted in certain relaxations. The gist of changes made in the slab rates is given below:

Income Tax Slabs for FY 2024-25 (AY 2025-26) Under Old Regime

There were no changes made to the tax slabs under the old regime in the budget 2024. The tax slabs under the old regime are as follows:

Income tax slabs for individuals aged below 60 years & HUF

NOTE: Surcharge and cess will be applicable.

Old vs New Tax Regime Slabs Comparison for FY 2024-25 (AY 2025-26)

Tax Slabs	Old Tax Regime Rates	New Tax Regime Rates
Up to ₹ 2,50,000	NIL	NIL
₹ 2,50,001 - ₹ 3,00,000	5%	NIL
₹ 3,00,001 - ₹ 5,00,000	5%	5%
₹ 5,00,001 - ₹ 6,00,000	20%	5%
₹ 6,00,001 - ₹ 7,00,000	20%	5%
₹ 7,00,001 - ₹ 9,00,000	20%	Browse by topics Income Tax e-Filing Income Tax Calculator Income Tax Slabs FY 2025-26 Old vs New Tax Regime How To File ITR New Tax Regime Which ITR Should I File Last Date To File ITR For 2025-26 Income Tax Sections & Deductions Income Tax Refund Capital Gains Income TDS PF Balance Check Form 26AS Advance Tax Budget 2026 Highlights Related articles Difference Between E-Commerce and E-Businesses Most Profitable Business in India 2022 secondd tit2dle Copyright Infringement: Meaning, Examples, Cases in India Popular articles What is a Title Deed of Property? Meaning and Difference between Title and Deeds Copyright Infringement: Meaning, Examples, Cases in India Difference Between Businessman and Entrepreneur: Example, Meaning Difference Between E-Commerce and E-Businesses You might be interested in Should We Invest in PMS & Mutual Funds or Both? 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