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Union Budget 2025: Income Tax Slabs and Calculator for FY 2025-26
The Union Budget 2025 has brought significant updates to income tax slabs under the new tax regime. Understanding these changes is crucial for taxpayers to plan their finances efficiently. In this blog, we will break down the latest income tax slabs, discuss the new tax regime, and provide a simple tax calculator for a ₹12 lakh income.
Income Tax Slabs for FY 2025-26 (New Tax Regime)
The new tax regime was introduced to simplify taxation with lower tax rates but without exemptions and deductions. Here are the updated slabs under the new tax regime:
| Annual Income (₹) | Tax Rate (%) |
|---|---|
| Up to ₹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% |
👉 Note: No tax up to ₹12 lakh under the new regime due to exemptions and standard deductions.
Income Tax Calculator for ₹12 Lakh Income
For individuals earning ₹12 lakh per year under the new tax regime, the tax calculation will be as follows:
- Up to ₹4,00,000 – No tax
- ₹4,00,001 – ₹8,00,000 (₹4,00,000 @ 5%) = ₹20,000
- ₹8,00,001 – ₹12,00,000 (₹4,00,000 @ 10%) = ₹40,000
Total Tax Before Cess: ₹60,000 Cess (4%): ₹2,400 Total Tax Payable: ₹62,400
However, under the new exemptions, incomes up to ₹12 lakh are tax-free, meaning there is no tax liability.
Comparison with Old Tax Regime
The old tax regime allows various deductions, such as 80C (₹1.5 lakh), HRA, Standard Deduction (₹50,000), and NPS deductions. If you claim deductions, the old regime might still be beneficial.
However, the new tax regime provides lower rates and is suitable for individuals who do not claim multiple deductions. Salaried individuals can benefit from a standard deduction of ₹75,000, effectively making incomes up to ₹12.75 lakh tax-free.
Key Takeaways from Union Budget 2025
- The new tax regime remains the default, but taxpayers can opt for the old regime.
- No tax on annual income up to ₹12 lakh due to new exemptions.
- Standard deduction of ₹75,000 available for salaried individuals.
- Revised tax slabs aim to provide relief to middle-income taxpayers and boost economic growth.
For more updates on ETV, Zee Business, and other financial news platforms, stay tuned!
Conclusion
Understanding the new income tax slabs is essential for financial planning. Use the income tax calculator to check your tax liability and decide which regime suits you best. If you need expert advice, consult a financial advisor to make an informed choice.
👉 What do you think about the new tax slabs? Share your thoughts in the comments!
