Introduction

The Income Tax Department experiences everyday modifications, and the Income Tax Slabs for FY 2025-26 (Evaluation Year 2026-27) are no exemption. Whether you are a salaried person, a self-employed proficient, or a trade proprietor, understanding the most recent charge rates is pivotal to compelling assessing, arranging, and maximizing investment funds. 

This guide will break down the Income Tax Slabs, exemptions, deductions, and key changes to help you stay ahead of the curve.

Link to Official Government Tax Websites

• Income Tax Department: This is a link to India’s official Income Tax Department for information on tax filing and tax slabs.
• Income Tax Return Portal: Link to the official e-Filing Portal for online filing and related services.

What Are Income Tax Slabs?

Income tax slabs are the categories that determine how much tax a taxpayer needs to pay based on their income. In India, income is taxed at different rates depending on its slab. The slab rates for FY 2025-26 include both the old and new tax regimes.

Also Read, 10 Hidden Tax Deductions: Can Save You Big!

Table: Income Tax Slabs – FY 2025-26

Income Range (INR)Tax Rate (Old Regime)Tax Rate (New Regime)

The old regime provides exemptions and deductions, while the new regime simplifies the tax structure but eliminates many of these exemptions.

Key Changes in Income Tax Slabs for FY 2025-26

The Income Tax Slabs for FY 2025-26 include several updates, especially for those opting for the new tax regime. Key changes include:

• Higher tax-free threshold: No tax for incomes up to INR 2.5 lakh.
• Simplified rates under the new tax regime.
• The old regime continues to offer deductions like 80C and 80D, while the new regime does not.
• With the new tax structure, people who gain up to Rs. 12,00,000 will have no tax liability due to the expanded discount of Rs. 60,000. For salaried people, the tax liabilities will be zero for livelihoods up to Rs. 12,75,000 due to the Rs. 75,000 standard conclusion.

These changes significantly impact tax liability for individuals at various income levels. Here is a breakdown of what you can expect.

Link to Tax News and Updates Sites

• Tax India Online: Link to Tax India Online for the latest updates on tax policies and slabs.
• ET Tax (Economic Times): Link to ET Tax for expert analysis on tax changes and strategies.

The New Tax Regime Explained

Introduced in 2020, the new tax regime aims to simplify tax filing by offering lower tax rates in exchange for eliminating most exemptions and deductions. The tax rates in the new regime are the same as in the old regime but without the complexity of claiming deductions.

For example, a salaried individual earning INR 7 lakh may benefit from a lower tax rate under the new regime than the old one, where they would have to claim various exemptions to reduce their taxable income.

Tax Exemptions and Deductions for FY 2025-26

In the old tax regime, there are various exemptions and deductions available:

• Section 80C Investments in PPF, EPF, life insurance premiums, etc.
• Section 80D: Deductions for health insurance premiums.
• House Rent Allowance (HRA): Deduction for rent paid.

Read For Tax Exemptions: NSC vs FD – Guaranteed Returns Showdown: Which One Wins for You?

These deductions can significantly reduce taxable income but do not apply under the new tax regime.

Link to Articles on Tax Deductions (80C, 80D, etc.)

• Section 80C Tax Deductions: Link to an article explaining Section 80C deductions for better understanding.
• Health Insurance Deductions 80D: Add a link to this guide on 80D deductions for taxpayers seeking advice on health insurance savings.

Understanding the Impact of the New Tax Regime on Different Income Groups

Different income groups will experience varying impacts from the new tax regime. For example:

• Low-income earners (below INR 5 lakh) benefit from rebates under the new regime.
• Middle-income earners (INR 5-10 lakh) might face minimal differences between the regimes, but they could save on tax filing complexity with the new system.
• High-income earners (above INR 10 lakh) might benefit more from the old regime’s exemptions.

It is essential to calculate whether claiming exemptions under the old regime results in a lower tax liability than opting for the new, simplified structure.

Link to Tax Rebate Information

• Section 87A Tax Rebate: Link to the section on Section 87A Tax Rebate for taxpayers earning less than 5 lakh.

FAQ Section (Based on “People Also Ask” Data)

1. What is the income tax rate for FY 2025-26 in India? 

The rates depend on the income range and whether you choose the old or new tax regime. For example, income above INR 10 lakh is taxed at 30% under both regimes.

2. How do I choose between the new and old tax regime? 

The old regime might be better if you have significant deductions like 80C or HRA. Otherwise, the new regime offers simplified tax filing with lower rates.

3. Can I claim exemptions under the new tax regime?

No, exemptions are only available under the old tax regime.

4. What are the new tax slabs for salaried individuals in FY 2025-26? 

The tax slabs for salaried individuals are the same as for general taxpayers, with rates starting at 5% for income above INR 2.5 lakh.

5. Is a tax rebate below 5 lakh in FY 2025-26? 

Yes, there is a tax rebate under Section 87A for incomes up to INR 5 lakh, reducing the tax liability to zero.

• Section 87A Tax Rebate: Link to the section on Section 87A Tax Rebate for taxpayers earning less than 5 lakh.

6. How does the new tax regime impact my tax liability for 2025-26? 

It simplifies tax filing but may result in higher taxes if you claim significant deductions.

7. What exemptions can I claim under the old tax regime for FY 2025-26? 

You can claim exemptions like HRA, deductions under 80C, 80D, and other allowances.

8. How will the AY 2026-27 income tax slabs affect my savings? 

The updated slabs can lower your tax liability, depending on whether you opt for the new or old regime.

9. What deductions can be availed under the old tax regime in FY 2025-26? 

Deductions include investments under Section 80C, health insurance under 80D, and home loan interest.

Conclusion with Actionable Takeaways

In conclusion, understanding the most recent FY 2025-26 tax block is essential for making educated budgetary choices. Whether you pick the unused assessment administration or proceed with the ancient one, persistently evaluate your pay, conclusions, and exceptions sometime recently, making a last choice. Here is a fast recap:

• If you have significant exemptions, the old tax regime may be better.
• If you prefer simplicity, the new tax regime could save you time and hassle.
• Plan your tax deductions wisely to minimize your tax liability and maximize savings.

Always stay updated with the latest changes and consider consulting a tax professional for tailored advice.