New Income Tax Slabs FY 2025-26: Zero Tax Up to Rs 12 Lakh
Under the new tax regime for FY 2025-26, income up to Rs 12 lakh is tax-free. Check revised tax slabs, rates, and calculations for higher incomes.
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The revised income tax regime, effective from April 1, 2025, exempts individuals from paying tax on taxable income up to Rs 12 lakh. However, net taxable income may exceed this threshold after considering the standard deduction of Rs 75,000 and the employer's contribution of 14 per cent to the National Pension System (NPS).
Taxation applies once net taxable income surpasses Rs 12 lakh. The applicable tax rates are:
0 - 4,00,000: 0 per cent
4,00,001 - 8,00,000: 5 per cent
8,00,001 - 12,00,000: 10 per cent
12,00,001 - 16,00,000: 15 per cent
16,00,001 - 20,00,000: 20 per cent
20,00,001 - 24,00,000: 25 per cent
24,00,001 and above: 30 per cent
For an individual earning Rs 21 lakh annually, including salary, interest, and dividends (excluding capital gains), deductions apply as follows:
- Gross taxable income: Rs 21,00,000
- Standard deduction: Rs 75,000
- Employer’s NPS contribution: Rs 1,50,000
- Net taxable income: Rs 18,75,000
The tax liability is calculated across different income brackets:
- Rs 0 - 4,00,000: No tax applies.
- Rs 4,00,001 - 8,00,000: Tax at 5 per cent on Rs 4,00,000 → Rs 20,000.
- Rs 8,00,001 - 12,00,000: Tax at 10 per cent on Rs 4,00,000 → Rs 40,000.
- Rs 12,00,001 - 16,00,000: Tax at 15 per cent on Rs 4,00,000 → Rs 60,000.
- Rs 16,00,001 - 18,75,000: Tax at 20 per cent on Rs 2,75,000 → Rs 55,000.
The total tax liability sums up to Rs 1,75,000. With an additional 4 per cent cess (Rs 7,000), the total tax payable is Rs 1,82,000.
With the exemption limit raised to Rs 12 lakh, individuals falling below this income threshold benefit significantly. For higher income brackets, the revised slabs determine the tax liability progressively.
