Not sure which income tax slab you fall under for FY 2024–25 or FY 2025–26? You’re not alone. While many rely on chartered accountants or online platforms to file their taxes, it’s still important to understand your income tax bracket. Why? Because knowing where you stand can help you plan your finances better—whether it’s budgeting, saving, or investing.
Your tax slab directly affects how much money you take home after taxes. Understanding your slab can also help you take advantage of deductions and exemptions, ultimately reducing your tax burden. Plus, it helps avoid last-minute surprises when filing your ITR.
What Are Income Tax Slabs?
Income tax in India is calculated based on slabs—categories that apply different tax rates depending on how much you earn. The more you earn, the higher the percentage you may have to pay. These slabs vary based on the tax regime you choose and your age.
What Counts as Income?
According to tax laws, your income includes:
- Salary, wages, pension, or gratuity
- Rental income from property
- Business or professional income
- Capital gains from stocks, mutual funds, property, crypto, etc.
- Bank interest, lottery winnings, etc.
- Employer contributions to your EPF
- Voluntary retirement payouts
New Tax Regime vs Old Tax Regime: What’s the Difference?
India offers two tax regimes:
New Tax Regime (FY 2025–26 Updates)
- Revised in Budget 2025
- Fewer exemptions but lower tax rates
- Increased basic exemption to ₹4 lakh
- Tax rebate of up to ₹60,000 for income up to ₹12 lakh
- 30% rate now applies only to income above ₹24 lakh
New Tax Slabs (FY 2025–26):
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% |
Above 24,00,000 | 30% |
Old Tax Regime (FY 2025–26)
Offers many deductions (Section 80C, HRA, LTA, etc.)
Tax-free limits depend on age:
- Below 60 years: ₹2.5 lakh
- 60–79 years: ₹3 lakh
- 80+ years: ₹5 lakh
Old Tax Slabs (for <60 years):
Income (₹) | Tax Rate |
0 – 2,50,000 | 0% |
2,50,001 – 5,00,000 | 5% |
5,00,001 – 10,00,000 | 20% |
Above 10,00,000 | 30% |
(Note: These remain unchanged from Budget 2025)
FY 2024–25 (Current Year) Tax Rates
New Tax Regime (FY 2024–25):
Income (₹) | Tax Rate |
0 – 3,00,000 | 0% |
3,00,001 – 7,00,000 | 5% |
7,00,001 – 10,00,000 | 10% |
10,00,001 – 12,00,000 | 15% |
12,00,001 – 15,00,000 | 20% |
Above 15,00,000 | 30% |
Key Highlights:
- Standard deduction: ₹75,000 for salaried individuals
- Tax rebate up to ₹20,000 for income up to ₹7 lakh
- Employer NPS contribution up to 14% deductible
- New regime is default (must opt out for old regime)
Old Tax Regime (FY 2024–25):
Same slab as FY 2025–26 (as above)
Tax Calculation Example: New Regime FY 2024–25
Salaried Income: ₹16 lakh
Deductions:
- Standard: ₹75,000
- NPS (80CCD[2]): ₹1.12 lakh
Taxable Income: ₹14.13 lakh
Tax Payable: ₹1,22,600
Cess (4%): ₹4,904
Total Tax: ₹1,27,504
Tax Calculation Example: Old Regime FY 2024–25
Salaried Income: ₹18 lakh
Deductions:
- 80C: ₹1.5 lakh
- NPS (80CCD[1B]): ₹50,000
- Health insurance (80D): ₹25,000
- Standard: ₹50,000
Taxable Income: ₹15.25 lakh
Tax Payable: ₹2,70,000
Cess (4%): ₹10,800
Total Tax: ₹2,80,800
Surcharge Details
Surcharge is an extra tax on high incomes, applied before cess:
New Tax Regime:
Income | Surcharge |
Up to ₹50 lakh | NIL |
₹50 lakh – ₹1 crore | 10% |
₹1 crore – ₹2 crore | 15% |
Above ₹2 crore | 25% |
Old Tax Regime:
Income | Surcharge |
Up to ₹50 lakh | NIL |
₹50 lakh – ₹1 crore | 10% |
₹1 crore – ₹2 crore | 15% |
₹2 crore – ₹5 crore | 25% |
Above ₹5 crore | 37% |
Note: For capital gains and dividends, surcharge is capped at 15%.
Which Tax Regime Should You Choose?
There’s no universal answer—it depends on your income and investments.
- Choose old regime if you claim multiple deductions.
- Choose new regime if you prefer lower rates and simpler filing.
Use a tax calculator to compare both options and decide what’s best for you in FY 2024–25.
