FY2025-26 New Income Tax Slabs Under Revised Tax Regime – A Detailed Breakdown

To the relief of middle-class tax payers, Finance Minister Nirmal Sitharaman announced a new tax slab during the Union Budget 2025-26 presentation, increasing the income tax exemption limit to Rs 12 lakhs. This move aims to reduce the tax burden on salaried individuals, encouraging them to save more and invest in their financial goals.

Let us take a closer look at how the new tax slabs compare with the previous ones.

Income	New Tax Slab FY 2025-26
0-4 lakh	No Tax
Rs 4- Rs 8 lakhs	5 per cent tax
Rs 8- Rs 12 lakhs	10 per cent tax
Rs 12- Rs 16 lakhs	15 per cent tax
Rs 16- Rs 20 lakhs	20 per cent tax
Rs 20- Rs 24 lakhs	25 per cent tax
Above 24 lakhs	30 per cent tax

Income	Old Tax Slab FY 2024-25
Up to Rs 3 lakhs	No tax
Rs 3- Rs 7 lakhs	5 per cent tax
Rs 7- Rs 10 lakhs	10 per cent tax
Rs 10- Rs 12 lakhs	15 per cent tax
Rs 12- Rs 15 lakhs	20 per cent tax
Above Rs 15 lakhs	30 per cent tax

How Will Income Up To Rs 12 Lakhs Be Tax-Free ?

Let us take an example of an individual who earns Rs 12 lakhs annually.

For the income up to Rs 4 lakh - Zero tax

For income between Rs 4 lakhs and Rs 8 lakhs - Rs 20,000

For income between Rs 8 lakhs and Rs 12 lakhs - Rs 40,000

Total tax - Rs 60,000

However, under the new tax regime, the tax rebate eliminates the whole Rs 60,000, resulting in a zero-tax payable situation for those earning up to Rs 12 lakhs.

Meanwhile, under the old tax slab individual earning Rs 12 lakhs was required to pay a tax of Rs 1,72,500.
More examples :

For individuals earning 15 lakhs per year - They will have a tax liability of Rs 1,40,000 under the new slab, which will be significantly lower compared to Rs 2,62,500 under the previous one. This results in savings of Rs 1,22,500, providing substantial relief to middle-income earners.

Meanwhile, individuals earnings Rs 25 lakhs annually will now be required to pay a tax of Rs 4,40,000 under the revised tax regime, compared to a tax payment of Rs 5,62,500 under the old slab. This translates to a reduction of Rs 1,22,500, boosting disposable income and encouraging investments.

Does The New Tax Slab Apply To All Individuals ?

The Budget document specifies that the new tax slabs apply to those who opt for the New Tax Regime, which simplifies tax calculation by eliminating the complications of various exemptions and deductions. The new regime aims to streamline the tax-paying process, making it more transparent and hassle-free for taxpayers.

Notably, the Finance Minister further added that a new income-tax bill will be released in the coming week, providing detailed insights about the revised tax structure and its implications for different categories of taxpayers.