Income tax is a direct tax which follows a progressive slab rate, where the rate of tax increases as the taxpayer’s income rises. The Income-tax Act, 1961 provides for two tax regimes: the old regime, which allows various deductions and exemptions, and the new regime, which offers lower tax rates without exemptions.
Budget 2025 Update
The income gained up-to Rs.12 Lakhs will ultimately have Nil tax liability. The grounds are explained as follows. The modified slab rates for new tax regime applicable for FY 2025-2026 is as follows:
Income Tax Slabs Tax Rates Up-to Rs. 4,00,000 NIL Rs. 4,00,001 – Rs. 8,00,000 5% Rs. 8,00,001 – Rs. 12,00,000 10% Rs. 12,00,001 – Rs. 16,00,000 15% Rs. 16,00,001 – Rs. 20,00,000 20% Rs. 20,00,001 – Rs. 24,00,000 25% Above Rs. 24,00,000 30% So as per the above table, the Basic Exemption Limit is extended to Rs.4,00,000. The rebate allowed under section 87A has now been increased to Rs.60,000 for new regime. This was Rs.25,000 before the change. Since the rebate allowed has been increased, tax incidence for income up-to Rs.12,00,000 will be zero.
Marginal relief on rebate is still applicable.
Direct tax bill will be presented at the parliament next week.
Old vs new tax regime: The income tax slabs proposed in the Union Budget 2025 under the new tax regime include a ₹60,000 rebate for income up to ₹12 lakh ( ₹12.75 lakh for salaried individuals) under Section 87A.
This makes the old tax regime, which has 5 per cent, 20 per cent, and 30 per cent slabs and allows deductions for tax-saving investments, less attractive in comparison.
According to a report by The Times of India, the finance ministry has consistently supported the idea of separating investment and savings schemes from income tax liabilities, allowing taxpayers to make independent choices based on their own benefits.
The new tax regime offers more benefits than the old one for incomes up to ₹12 lakh ( ₹12.75 lakh for salaried individuals), even when utilising the full deductions and exemptions of ₹5,75,000 and 30 per cent of salary as house rent allowance.
However, it’s unlikely for someone earning ₹12.75 lakh to invest in tax-saving schemes, claim house rent allowance ( ₹3,82,500), and take the standard deduction, adding up to ₹9,57,000, The Economic Times reported.
Know details of differences between old and new tax regimes:
- The new tax regime results in higher taxes after ₹12 lakh income. Staying with the old tax regime is beneficial only if the taxpayer invests ₹5.25 lakh in tax-saving schemes.
- For people earning ₹13.75 lakh without HRA, the old tax system has a lower tax of ₹57,500 compared to ₹75,000 under the new system. This is also true for income up to ₹15.75 lakh, but it requires investing ₹5.25 lakh in savings schemes. Even with HRA, the old system is better.
- For people earning ₹20 lakh ( ₹20.75 lakh for salaried ones), the new tax regime is better than the old one. Even after investing ₹5.25 lakh in savings schemes, the old system would require ₹2.4 lakh in tax, while the new system would only require ₹2 lakh, with no deductions allowed.
- Quoting experts, The Financial Express reported that for people earning above ₹24.75 lakh, the new tax regime is beneficial only if their total deductions and exemptions excluding the standard deduction are under ₹8 lakh.
- Under the new tax regime, a taxpayer with an income of ₹24 lakh will save ₹60,000. In the old regime, after investing ₹5.25 lakh in savings schemes, the tax would be ₹3.60 lakh, compared to ₹3 lakh under the new regime.
What is an Income Tax Slab?
In India, the Income Tax applies to individuals based on a slab system, where different tax rates are assigned to different income ranges. As the person’s income increases, the tax rates also increase. This type of taxation allows for a fair and progressive tax system in the country. The income tax slabs are revised periodically, typically during each budget. With the upcoming Budget 2025, there are many expectations for changes in tax slabs to further adjust for current economic conditions.
Income Tax Slabs for FY 2024-25 (AY 2025-26) and FY 2023-23 (AY 2024-25) Under New Regime
The Budget 2024 introduced significant changes to the tax slabs under the New Tax Regime, which will be applicable for FY 2024-25 (AY 2025-26). Taxpayers can now benefit from revised tax slabs, along with an increased standard deduction and an enhanced family pension deduction.
New Tax Regime Slabs:
| Tax Slab for FY 2024-25 | Tax Rate |
| Up to Rs 3 lakh | NIL |
| Rs 3 lakh – Rs 7 lakh | 5% |
| Rs 7 lakh – Rs 10 lakh | 10% |
| Rs 10 lakh – Rs 12 lakh | 15% |
| Rs 12 lakh – Rs 15 lakh | 20% |
| Above Rs 15 lakh | 30% |
Note: Tax rebate up to Rs. 25,000 is applicable if the total income does not exceed Rs 7,00,000 (not applicable for NRIs).
Income Tax Slabs for FY 2024-25 (AY 2025-26) Under Old Regime
There were no changes made to the tax slabs under the old regime in the budget 2024. The tax slabs under the old regime are as follows:
Old Tax Regime Slabs:
| Income Slabs | Individuals Below 60 Years and HUF | Individuals Between 60 To 80 Years | Individuals Greater Than 80 Years |
| Up to Rs 2,50,000 | NIL | NIL | NIL |
| Rs.2,50,001 – Rs.3,00,000 | 5% | NIL | NIL |
| Rs 3,00,001 – Rs 5,00,000 | 5% | 5% | NIL |
| Rs 5,00,001 to Rs 10,00,000 | 20% | 20% | 20% |
| Rs 10,00,001 and above | 30% | 30% | 30% |
Note: For all the above cases, surcharge and cess is applicable. Also, the above concessional rates are available only for resident individuals.
New Income Tax Regime FY 2024-25 Key Features
The key features of the new tax regime for FY 2024-25 is as follows:
- Default tax regime: It is the default tax regime. If individuals want to choose the old regime then they have to file Form 10-IEA.
- Basic exemption limit: The basic exemption limit is Rs. 3 lakhs for everyone irrespective of their age.
- Rebate u/s 87A: Rebate u/s 87A is available to the individual taxpayers if their income is upto Rs. 7 lakhs. Hence, they will have zero tax liability if their income is under Rs. 7 lakhs.
- Surcharge: The highest surcharge rate is 25% under the new regime as opposed to 37% in the old regime.
Revised New Tax Regime: Key Changes and Their Impact
The Union Budget 2024 has introduced significant updates to the income tax regime, aimed at simplifying the tax structure and providing relief to taxpayers. The revised income tax slabs bring expanded thresholds for certain categories, ensuring more taxpayers benefit from lower rates. These changes not only reflect the government’s commitment to boosting disposable income but also encourage individuals to adopt the new tax regime. The following table depicts the changes made in the new regime to benefit the taxpayers:
Income Tax Slab Rates FY 2023-24 (AY 2024-25) v/s FY 2024-25 (AY 2025-26)
| Income Tax Slabs for FY 2023-24 | Tax Rates (FY 2023-24) | Income Tax Slabs for FY 2024-25 | Tax Rates (FY 2024-25) | Changes |
| Up to Rs 3,00,000 | NIL | Up to Rs 3,00,000 | NIL | No Change |
| Rs 3,00,000 – Rs 6,00,000 | 5% | Rs 3,00,000 – Rs 7,00,000 | 5% | Slab expanded by Rs 1,00,000 |
| Rs 6,00,000 – Rs 9,00,000 | 10% | Rs 7,00,000 – Rs 10,00,000 | 10% | Slab expanded by Rs 1,00,000 |
| Rs 9,00,000 – Rs 12,00,000 | 15% | Rs 10,00,000 – Rs 12,00,000 | 15% | No Change in Rate; New Threshold |
| Rs 12,00,000 – Rs 15,00,000 | 20% | Rs 12,00,000 – Rs 15,00,000 | 20% | No Change |
| Above Rs 15,00,000 | 30% | Above Rs 15,00,000 | 30% | No Change |
Old vs New Tax Regime Slabs Comparison for FY 2024-25 (AY 2025-26)
| Tax Slabs | Old Tax Regime | New Tax Regime |
| Up to Rs 2,50,000 | NIL | NIL |
| Rs 2,50,001 – Rs 3,00,000 | 5% | NIL |
| Rs 3,00,001 – Rs 5,00,000 | 5% | 5% |
| Rs 5,00,001 – Rs 6,00,000 | 20% | 5% |
| Rs 6,00,001 – Rs 7,00,000 | 20% | 5% |
| Rs 7,00,001 – Rs 9,00,000 | 20% | 10% |
| Rs 9,00,001 – Rs 10,00,000 | 20% | 10% |
| Rs 10,00,001 – Rs 12,00,000 | 30% | 15% |
| Rs 12,00,001 – Rs 12,50,000 | 30% | 20% |
| Rs 12,50,001 – Rs 15,00,000 | 30% | 20% |
| Rs 15,00,000 and above | 30% | 30% |
Revised Income Tax Slab Rate Calculation for AY 2025-26 (FY 2024-25) – For New Regime
| Income Slabs | Income Tax Rates |
| Up to Rs 3,00,000 | Nil |
| Rs 3,00,000 to Rs 7,00,000 | 5% on income which exceeds Rs 3,00,000 |
| Rs 7,00,000 to Rs 10,00,000 | Rs. 20,000 + 10% on income more than Rs 7,00,000 |
| Rs 10,00,000 to Rs 12,00,000 | Rs. 50,000 + 15% on income more than Rs 10,00,000 |
| Rs 12,00,000 to Rs 1500,000 | Rs. 80,000 + 20% on income more than Rs 12,00,000 |
| Above Rs 15,00,000 | Rs. 1,40,000 + 30% on income more than Rs 15,00,000 |
Income Tax Slab Rate Calculation AY 2024-25 (FY 2023-24) – For New Regime
| Income Slabs | Income Tax Rates |
| Up to Rs 3,00,000 | Nil |
| Rs 3,00,000 to Rs 6,00,000 | 5% on income which exceeds Rs 3,00,000 |
| Rs 6,00,000 to Rs 900,000 | Rs. 15,000 + 10% on income more than Rs 6,00,000 |
| Rs 9,00,000 to Rs 12,00,000 | Rs. 45,000 + 15% on income more than Rs 9,00,000 |
| Rs 12,00,000 to Rs 1500,000 | Rs. 90,000 + 20% on income more than Rs 12,00,000 |
| Above Rs 15,00,000 | Rs. 150,000 + 30% on income more than Rs 15,00,000 |
Default Regime
From FY 2023-24 the new tax regime is the default regime. If you want to file your ITR under the old regime then you have to file Form 10-IEA.
How to Calculate Income Tax from Income Tax Slabs (Old Regime)?
Illustration 1: Rohit has a total taxable income of Rs 8,00,000. This income has been calculated by including income from all sources, such as salary, rental income, and interest income. Deductions under Section 80 have also been reduced. Rohit wants to know his tax dues as per the old regime for FY 2023-24 (AY 2024-2025).
| Income Tax Slabs | Tax Rate | Tax Amount |
| * up to Rs 2,50,000 | No tax | – |
| Rs 2,50,000 – Rs 5,00,000 | 5% (Rs 5,00,000 – Rs 2,50,000) | Rs 12,500 |
| Rs 5,00,000 – 10,00,000 | 20% (Rs 8,00,000 – Rs 5,00,000) | Rs 60,000 |
| more than Rs 10,00,000 | 30% | – |
| Tax | Rs 72,500 | |
| Cess | 4% of Rs 72,500 | Rs 2,900 |
| Total tax in FY 2023-24 (AY 2024-25) | Rs 75,400 | |
Note:
Please note that Rohit is an individual taxpayer assessee having an income tax exemption of Rs 2,50,000. For other taxpayer assessees, i.e. senior citizens and super senior citizens, the Income-tax limit for availing the exemption would be Rs 3,00,000 & Rs 5,00,000, respectively.
Individuals with net taxable income less than or equal to Rs 5 lakh will be eligible for tax rebate u/s 87A under the old tax regime, i.e. tax liability will be NIL.
Important points to note if you select the new tax regime:
- Please note that the tax rates in the New tax regime are the same for all categories of Individuals, i.e. Individuals, senior citizens, and Super senior citizens.
- Individuals with net taxable income less than or equal to Rs 7 lakh will be eligible for tax rebate u/s 87A, i.e. tax liability will be NIL under the new regime.
What is Surcharge?
In case the income exceeds a certain threshold, the additional taxes are to be paid over and above existing tax rates. This is an additional tax on the High Income Earners.
Surcharge rates are as below:
| Total Income | Surcharge on Income Tax |
| > Rs. 50 lakh and < Rs. 1 crore | 10% |
| > Rs. 1 crore and < Rs. 2 crore | 15% |
| > Rs. 2 crore and < Rs. 5 crore | 25% |
| > Rs. 5 crore | 37% |
*In Budget 2023, the highest surcharge rate of 37% has been reduced to 25% under the new tax regime. (applicable from 1st April 2023)
Surcharge rates of 25% or 37% will not apply to the income from dividends and capital gains taxable under sections 111A (Short Term Capital Gain on Shares), 112A (Long Term Capital Gain on Shares), and 115AD (Tax on the income of Foreign Institutional Investors). Therefore, the highest surcharge rate on the tax payable for such incomes will be 15%.
The surcharge rate for an Association of Persons (AOP) consisting entirely of companies will also be limited to 15%.
Additional Health and Education cess at the rate of 4% will be added to the income tax liability.
What are the Exemptions and Deductions Not Claimable under the New Tax Regime?
The following are some of the major deductions and exemptions you cannot claim under the new tax regime:
Salary:
- Professional tax and entertainment allowance on salaries
- Leave Travel Allowance (LTA)
- House Rent Allowance (HRA)
- Allowances to MPs/MLAs
- Helper allowance
- Children education allowance
- Other special allowances [Section 10(14)]
House property:
- Interest on housing loan on the self-occupied property or vacant property (Section 24)
Other sources:
- Minor child income allowance
Business or profession:
- Additional depreciation under section 32(1)(iia)
- Deductions under section 32AD, 33AB, 33ABA
- Various deductions for donation for or expenditure on scientific research contained in section 35(2AA) or 35(1)(ii) or (iia) or (iii)
- Deduction under section 35AD or section 35CCC
- Exemption under section 10AA for SEZ units
Chapter VI-A deductions:
- The deduction under Section 80TTA/80TTB (Savings and Deposit interest)
- Section 80C, 80D, 80E and so on, except Section 80CCD(2) and Section 80JJAA
- Exemption or deduction for any other perquisites or allowances including food allowance of Rs 50/meal subject to 2 meals a day
- Employee’s (own) contribution to NPS
- Donation to Political party/trust, etc.,
What are the Exemptions and Deductions Available Under the New Regime?
Under the New tax regime, you can claim tax exemption for the following:
Salary:
- Transport allowances in case of a specially-abled person.
- Conveyance allowance received to meet the conveyance expenditure incurred as part of the employment.
- Any compensation received to meet the cost of travel on tour or transfer.
- Daily allowance received to meet the ordinary regular charges or expenditure you incur on account of absence from his regular place of duty.
- Perquisites for official purposes
- Exemption on voluntary retirement 10(10C), gratuity u/s 10(10) and Leave encashment u/s 10(10AA)
- Budget 2023 introduced a standard deduction of Rs 50,000 under New Tax Regime applicable from FY 2023-24. This has been increased to Rs.75,000 in Budget 2024 applicable from FY 2024-25
House property:
- Interest on Home Loan on let-out property (Section 24)
Other sources:
- Gifts up to Rs 50,000
- Budget 2023 also introduced deduction under Section 57(iia) of family pension income. In Budget 2024 Limit of maximum Deduction under Family Pension has been increased from Rs. 15,000 to Rs. 25,000.
Chapter VI-A deductions:
- Deduction for employer’s contribution to NPS account [Section 80CCD(2)]
- Deduction for additional employee cost (Section 80JJA)
- Budget 2023 further introduced deduction of amount paid or deposited in the Agniveer Corpus Fund under Section 80CCH(2)
- The deduction on employers contribution to pension Scheme as per Section 80CCD (2) has been increased from 10% of salary to the 14% of salary in Budget 2024.
Here’s a detailed list of exemptions and deductions available under the Old vs New Regime.
Old Tax Regime Vs New Tax Regime – Which is Better?
The new tax regime can largely benefit middle-class taxpayers who have a taxable income of up to Rs 15 lakh. Generally, the old regime is a better option for resident individuals who have crossed 60 years since they have relaxed basic exemption limits. (Rs. 3 lakhs and Rs. 5 lakhs respectively)
The new income tax regime is beneficial for people who make low investments. As the new regime offers six lower-income tax slabs, anyone paying taxes without claiming tax deductions can benefit from paying a lower rate of tax under the new tax regime. For instance, the assessee having total income before deduction up to Rs 12 lakh will have higher tax liability under the old system if they have investments less than Rs. 3,12,500. Therefore, if you invest less in tax-saving schemes, go for the new regime.
That being said, if you already have in place a financial plan for wealth creation by making investments in tax-saving instruments; medical claims and life insurance; making payments of children’s tuition fees; payment of EMIs on education loan; buying a house with a home loan; and so on, the old regime helps you with higher tax deductions and lower tax outgo.
In light of the above and considering the new income tax regime, if taxpayers want to opt for the concessional tax rates, they may evaluate both regimes. Hence, it is advisable to do a comparative evaluation and analysis under both regimes and then choose the most beneficial one, as it may vary from person to person. t is recommended to use tax calculator for finding out the tax payable under different regimes and compare to find out the most beneficial for the case. Read a detailed breakdown on this topic here.
When Can I Opt for Old vs New Regime?
| Nature of Income | Time of Selection of option of old vs new regime |
| Income from Salary or any other head of income attracting TDS | At the start of the financial year, an employee has the choice to select the tax regime and inform their employer, whereas the default regime shall be a new tax regime. It cannot be modified during the year. However, the option can be modified when filing the Income Tax Return.At the start of the financial year, an employee has the choice to select the tax regime and inform their employer, whereas the default regime shall be a new tax regime.It cannot be modified during the year. However, the option can be modified when filing the Income Tax Return. |
| Income from Business & Profession | In case you have Business or professional income, the choice between tax regimes can only be made once in a lifetime.In case you have Business or professional income, you can opt out of new tax regime at the time of filing return. In the subsequent assessment years, you can shift from old to new again. But this option is available only once in a lifetime |
Income Tax Rate for Domestic Companies
| Particulars | Old regime Tax rates | New Regime Tax rates |
| Company opts for section 115BAB (not covered in sections 115BA and 115BAA) & is registered on or after October 1, 2019, and has commenced manufacturing on or before 31st March 2024 and subject to the conditions specified in the section. | – | 15% |
| Company opts for Section 115BAA, wherein the total income of a company has been calculated without claiming specified deductions, incentives, or exemptions and additional depreciation as specified in the section. | – | 22% |
| The company opts for section 115BA registered on or after March 1, 2016 and engaged in the manufacture of any article or thing and does not claim the deduction as specified in the section. | – | 25% |
| Turnover or gross receipt of the company is less than Rs. 400 crore in the previous year 2020-21 | 25% | 25% |
| Any other domestic company | 30% | 30% |
*Please refer to the new sections for checking the applicability for the above concessional income tax rates.
NOTE:
- Additional Health and Education cess at the rate of 4 % will be added to the income tax liability in all cases.
- Surcharge applicable for companies is as below:
- 7% of Income tax where total income > Rs 1 crore,
- 12% of Income tax where total income > Rs.10 crore,
- 10% of income tax where domestic company opted for section 115BAA and 115BAB.
Income Tax Rate for Partnership Firm or LLP as per Old/New Regime
A partnership firm/ LLP is taxable at 30%.
NOTE:
- 12% Surcharge is levied on income is more than Rs 1 crore
- Health and Education Cess at the rate of 4% will be applicable
- No concessional rates are introduced for firms LLPs in the new tax regime
Income Tax Slab for FY 2024-25 for Domestic Companies
| Turnover Particulars | Tax Rate |
| Gross turnover up to 400 Cr. in the previous year | 25% |
| Gross turnover exceeding 400 Cr. in the previous year | 30% |
NOTE:
- In addition cess and surcharge are levied as follows:
- Cess: 4% of corporate tax
- Surcharge applicability:
- Taxable income is more than 1 Crore but less than 10 Crores: 7%
- Taxable income is more than 10 Crores: 12%
Income Tax Slab Rates for FY 2019-20, FY 2020-21, FY 2021-22 and FY 2022-23
Income tax slab for Individual aged below 60 years & HUF
| Income Tax Slab | Tax Rates for Individual & HUF Below the Age Of 60 Years & NRIs |
| Up to ₹2,50,000* | Nil |
| ₹2,50,001 to ₹5,00,000 | 5% |
| ₹5,00,001 to ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
NOTE:
- Income tax exemption limit is up to Rs 2,50,000 for Individuals, HUF below 60 years aged and NRIs
- Surcharge and cess will be applicable as discussed above
- An additional 4% Health & education cess will be applicable on the tax and surcharge amount
Income tax slab for Individual aged above 60 years to 80 years
| Income Tax Slab | Tax Rates for Senior citizens aged above 60 Years & Less than 80 Years |
| Up to ₹ 3,00,000* | No tax |
| ₹3,00,000 – ₹5,00,000 | 5% |
| ₹5,00,000 – ₹10,00,000 | 20% |
| More than ₹10,00,000 | 30% |
NOTE:
- Income tax exemption limit is up to Rs.3 lakh for senior citizens aged above 60 years but less than 80 years.
- Surcharge and cess will be applicable as discussed above
Income tax slab for Individual aged more than 80 years
| Income Tax Slab | Tax Rates for Super Senior Citizens (Aged 80 Years And Above) |
| Up to ₹5,00,000* | No tax |
| ₹5,00,000 – ₹10,00,000 | 20% |
| More than ₹10,00,000 | 30% |
NOTE:
- Income tax exemption limit is up to Rs 5 lakh for super senior citizen aged above 80 years.
- Surcharge and cess will be applicable as discussed above.
Income Tax Slab FY 2019-20, FY 2020-21, FY 2021-22 and FY 2022-23 for Domestic Companies
| Turnover Particulars | Tax Rate |
| Gross turnover up to 250 Cr. in the previous year | 25% |
| Gross turnover exceeding 250 Cr. in the previous year | 30% |
NOTE:
- In addition cess and surcharge are levied as follows:
- Cess: 4% of corporate tax
- Surcharge applicability:
- Taxable income is more than 1 Crore but less than 10 Crores: 7%
- Taxable income is more than 10 Crores: 12%
FY 2018-19: Income Tax Slab Rates
Income tax slab for Individual aged below 60 years & HUF
| Income Tax Slab | Tax Rates for Individual & HUF Below the Age Of 60 Years |
| Income up to Rs 2,50,000* | No tax |
| Income from Rs 2,50,000 – Rs 5,00,000 | 5% |
| Income from Rs 5,00,000 – 10,00,000 | 20% |
| Income more than Rs 10,00,000 | 30% |
NOTE:
- An additional 4% Health & education cess will be applicable on the tax amount calculated as above.
- Surcharge applicability:
- 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.
- 15% of income tax, where the total income exceeds Rs.1 crore.
Income tax slab for Individuals aged above 60 years to 80 years
| Income Tax Slab | Tax Rate for Senior citizens aged 60 Years But Less than 80 Years |
| Income up to Rs 3,00,000* | No tax |
| Income from Rs 3,00,000 – Rs 5,00,000 | 5% |
| Income from Rs 5,00,000 – 10,00,000 | 20% |
| Income more than Rs 10,00,000 | 30% |
NOTE:
- An additional 4% Health & education cess will be applicable on the tax amount calculated as above.
- Surcharge applicability:
- 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.
- 15% of income tax, where the total income exceeds Rs.1 crore.
Income tax slab for Individuals aged more than 80 years
| Income Tax Slab | Tax Rates for Super Senior Citizens (Aged 80 Years And Above) |
| Income up to Rs 5,00,000* | No tax |
| Income from Rs 5,00,000 – Rs 10,00,000 | 20% |
| Income more than Rs 10,00,000 | 30% |
NOTE:
- An additional 4% Health & education cess will be applicable on the tax amount calculated as above.
- Surcharge applicability:
- 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.
- 5% of income tax, where the total income exceeds Rs.1 crore
Can I claim 80C deductions and opt for a new income tax slab regime?
No, the new tax regime does not allow many deductions and exemptions which are otherwise available in the old tax regime. Deductions u/s 80C cannot be claimed if the taxpayer is opting for a New tax regime
On the Challan, what does income tax on companies and income tax other than companies mean?
The tax that is to be paid by the companies on their income is called corporate tax, and for payment of the same, it is mentioned in the challan as Income on Companies (Corporation tax)-0020. For payment of the tax by non-corporate assessees, the people like you and me, it is to be mentioned in the challan as Income-tax (other than Companies)-0021.
How does the government collect the taxes?
Taxes are collected by the Government through three means:
- Voluntary payment by taxpayers through various designated Banks. For example, Advance Tax and Self Assessment Tax payments,
- Taxes deducted at source [TDS] and
- Taxes collected at source [TCS].
Are there separate slab rates for different categories?
Yes, there are separate slab rates under the old tax regimes. However under the new tax regimes, there is no categories as such.
Do I need to file an Income Tax Return (ITR) if my annual income is below ₹3 lakh of the basic exemption limit?
Even if your income is below the exemption limit, you must file your ITR if any of these conditions apply to you.
Is the due date for filing an income tax return the same for all taxpayers?
No, the due date for all the taxpayers is not the same. For individual taxpayers for whom tax audit is not applicable, the due date is 31st July of the assessment year unless extended by the government.
Income Tax applies to individuals based on a slab system, where different tax rates are assigned to different income ranges. As the person’s income increases, the tax rates also increase. This type of taxation allows for a fair and progressive tax system in the country. The income tax slabs are revised periodically, typically during each budget. These slab rates vary for different groups of taxpayers.
New Tax Regime – Changes Made in Budget 2024:
- Revised Slabs: The slabs have been revised in the new regime
- Enhanced Standard Deduction: The standard deduction for salaried employees has been increased to Rs. 75,000 under the new regime
- Family Pension: The deduction on family pension received has been increased from Rs. 15,000 to Rs. 25,000
- NPS Contribution: The deduction limit on employer’s contribution to NPS has been increased to 14% from 10%.
As a result of the above changes, a salaried employee in the new tax regime can save up to Rs. 17,500 in taxes.
Income Tax Slabs for FY 2024-25 (AY 2025-26) Under New Regime
The Budget 2024 introduced significant changes to the tax slabs under the New Tax Regime, which will be applicable for FY 2024-25 (AY 2025-26). Taxpayers can now benefit from revised tax slabs, along with an increased standard deduction and an enhanced family pension deduction.
New Tax Regime Slabs:
| Tax Slab for FY 2024-25 | Tax Rate |
| Up to Rs 3 lakh | NIL |
| Rs 3h lakh – Rs 7 lak | 5% |
| Rs 7 lakh – Rs 10 lakh | 10% |
| Rs10 lakh – Rs 12 lakh | 15% |
| Rs 12 lakh – Rs 15 lakh | 20% |
| Above Rs 15 lakh | 30% |
Note: Tax rebate up to Rs.25,000 is applicable if the total income does not exceed Rs 7,00,000 (not applicable for NRIs).
Income Tax Slabs for FY 2024-25 (AY 2025-26) Under Old Regime
There were no changes made to the tax slabs under the old regime in the budget 2024. The tax slabs under the old regime are as follows:
Old Tax Regime Slabs:
Individuals aged below 60 years & HUF
| Income Slabs | Tax rate |
| Up to Rs 2,50,000 | NIL |
| Rs 2,50,001 – Rs 5,00,000 | 5% |
| Rs 5,00,001 to Rs 10,00,000 | 20% |
| Rs 10,00,001 and above | 30% |
NOTE:
- The income tax exemption limit is up to Rs 2,50,000 for Individuals, HUF below 60 years aged, and NRIs.
- Surcharge and cess will be applicable.
Individuals aged below 60 years to 80 years
| Income Slabs | Tax Rate |
| Up to Rs 3,00,000 | NIL |
| Rs 3,00,001 – Rs 5,00,000 | 5% |
| Rs 5,00,001 to Rs 10,00,000 | 20% |
| Rs 10,00,001 and above | 30% |
NOTE:
- The income tax exemption limit is up to Rs.3 lakh for senior citizens aged above 60 years but less than 80 years.
- Surcharge and cess will be applicable.
Individuals aged above 80 years
| Income Slabs | Tax Rate |
| Up to Rs 5,00,000 | NIL |
| Rs 5,00,001 to Rs 10,00,000 | 20% |
| Rs 10,00,001 and above | 30% |
NOTE:
- Income tax exemption limit is up to Rs 5 lakh for super senior citizen aged above 80 years.
- Surcharge and cess will be applicable.
New Income Tax Regime FY 2024-25 Key Features
The key features of the new tax regime for FY 2024-25 is as follows:
- Default tax regime: It is the default tax regime. If individuals want to choose the old regime then they have to file Form 10-IEA.
- Basic exemption limit: The basic exemption limit is Rs. 3 lakhs for everyone irrespective of their age.
- Rebate u/s 87A: Rebate u/s 87A is available to the individual taxpayers if their income is upto Rs. 7 lakhs. Hence, they will have zero tax liability if their income is under Rs. 7 lakhs.
- Surcharge: The highest surcharge rate is 25% under the new regime as opposed to 37% in the old regime.
Revised New Tax Regime: Key Changes and Their Impact
The Union Budget 2024 has introduced significant updates to the income tax regime, aimed at simplifying the tax structure and providing relief to taxpayers. The revised income tax slabs bring expanded thresholds for certain categories, ensuring more taxpayers benefit from lower rates. These changes not only reflect the government’s commitment to boosting disposable income but also encourage individuals to adopt the new tax regime. The following table depicts the changes made in the new regime to benefit the taxpayers:
| Income Tax Slabs for FY 2023-24 | Tax Rates (FY 2023-24) | Income Tax Slabs for FY 2024-25 | Tax Rates (FY 2024-25) | Changes |
| Up to Rs 3,00,000 | NIL | Up to Rs 3,00,000 | NIL | No Change |
| Rs 3,00,000 – Rs 6,00,000 | 5% | Rs 3,00,000 – Rs 7,00,000 | 5% | Slab expanded by Rs 1,00,000 |
| Rs 6,00,000 – Rs 9,00,000 | 10% | Rs 7,00,000 – Rs 10,00,000 | 10% | Slab expanded by Rs 1,00,000 |
| Rs 9,00,000 – Rs 12,00,000 | 15% | Rs 10,00,000 – Rs 12,00,000 | 15% | No Change in Rate; New Threshold |
| Rs 12,00,000 – Rs 15,00,000 | 20% | Rs 12,00,000 – Rs 15,00,000 | 20% | No Change |
| Above Rs 15,00,000 | 30% | Above Rs 15,00,000 | 30% | No Change |
Old vs New Tax Regime Slabs Comparison for FY 2024-25 (AY 2025-26)
| Tax Slabs | Old Tax Regime | New Tax Regime |
| Up to Rs 2,50,000 | NIL | NIL |
| Rs 2,50,001 – Rs 3,00,000 | 5% | NIL |
| Rs 3,00,001 – Rs 5,00,000 | 5% | 5% |
| Rs 5,00,001 – Rs 6,00,000 | 20% | 5% |
| Rs 6,00,001 – Rs 7,00,000 | 20% | 5% |
| Rs 7,00,001 – Rs 9,00,000 | 20% | 10% |
| Rs 9,00,001 – Rs 10,00,000 | 20% | 10% |
| Rs 10,00,001 – Rs 12,00,000 | 30% | 15% |
| Rs 12,00,001 – Rs 12,50,000 | 30% | 20% |
| Rs 12,50,001 – Rs 15,00,000 | 30% | 20% |
| Rs 15,00,000 and above | 30% | 30% |
Revised Income Tax Slab Rate Calculation for AY 2025-26 (FY 2024-25) – For New Regime
| Income Slabs | Income Tax Rates |
| Up to Rs 3,00,000 | Nil |
| Rs 3,00,000 to Rs 7,00,000 | 5% on income which exceeds Rs 3,00,000 |
| Rs 7,00,000 to Rs 10,00,000 | Rs. 20,000 + 10% on income more than Rs 7,00,000 |
| Rs 10,00,000 to Rs 12,00,000 | Rs. 50,000 + 15% on income more than Rs 10,00,000 |
| Rs 12,00,000 to Rs 1500,000 | Rs. 80,000 + 20% on income more than Rs 12,00,000 |
| Above Rs 15,00,000 | Rs. 1,40,000 + 30% on income more than Rs 15,00,000 |
Income Tax Slab Rate Calculation AY 2024-25 (FY 2023-24) – For New Regime
| Income Slabs | Income Tax Rates |
| Up to Rs 3,00,000 | Nil |
| Rs 3,00,000 to Rs 6,00,000 | 5% on income which exceeds Rs 3,00,000 |
| Rs 6,00,000 to Rs 900,000 | Rs. 15,000 + 10% on income more than Rs 6,00,000 |
| Rs 9,00,000 to Rs 12,00,000 | Rs. 45,000 + 15% on income more than Rs 9,00,000 |
| Rs 12,00,000 to Rs 1500,000 | Rs. 90,000 + 20% on income more than Rs 12,00,000 |
| Above Rs 15,00,000 | Rs. 150,000 + 30% on income more than Rs 15,00,000 |
Default Regime
From FY 2023-24 the new tax regime is the default regime. If you want to file your ITR under the old regime then you have to file Form 10-IEA.
How to Calculate Income Tax from Income Tax Slabs?
Illustration 1: Rohit has a total taxable income of Rs 8,00,000. This income has been calculated by including income from all sources, such as salary, rental income, and interest income. Deductions under Section 80 have also been reduced. Rohit wants to know his tax dues as per the old regime for FY 2023-24 (AY 2024-2025).
| Income Tax Slabs | Tax Rate | Tax Amount |
| * up to Rs 2,50,000 | No tax | – |
| Rs 2,50,000 – Rs 5,00,000 | 5% (Rs 5,00,000 – Rs 2,50,000) | Rs 12,500 |
| Rs 5,00,000 – 10,00,000 | 20% (Rs 8,00,000 – Rs 5,00,000) | Rs 60,000 |
| more than Rs 10,00,000 | 30% | – |
| Tax | Rs 72,500 | |
| Cess | 4% of Rs 72,500 | Rs 2,900 |
| Total tax in FY 2023-24 (AY 2024-25) | Rs 75,400 | |
Note:
Please note that Rohit is an individual taxpayer assessee having an income tax exemption of Rs 2,50,000. For other taxpayer assessees, i.e. senior citizens and super senior citizens, the Income-tax limit for availing the exemption would be Rs 3,00,000 & Rs 5,00,000, respectively.
Individuals with net taxable income less than or equal to Rs 5 lakh will be eligible for tax rebate u/s 87A under the old tax regime, i.e. tax liability will be NIL.
Important points to note if you select the new tax regime:
- Please note that the tax rates in the New tax regime are the same for all categories of Individuals, i.e. Individuals, Senior citizens, and Super senior citizens.
- Individuals with net taxable income less than or equal to Rs 7 lakh will be eligible for tax rebate u/s 87A, i.e. tax liability will be NIL under the new regime.
What is Surcharge?
In case the income exceeds a certain threshold, the additional taxes are to be paid over and above existing tax rates. This is an additional tax on the High Income Earners.
Surcharge rates are as below:
10% of Income tax if total income > Rs.50 lakh and < Rs.1 crore,
15% of Income tax if total income > Rs.1 crore and < Rs.2 crore,
25% of Income tax if total income > Rs.2 crore and < Rs.5 crore,
37% of Income tax if total income > Rs.5 crore
*In Budget 2023, the highest surcharge rate of 37% has been reduced to 25% under the new tax regime. (applicable from 1st April 2023)
Surcharge rates of 25% or 37% will not apply to the income from dividends and capital gains taxable under sections 111A (Short Term Capital Gain on Shares), 112A (Long Term Capital Gain on Shares), and 115AD (Tax on the income of Foreign Institutional Investors). Therefore, the highest surcharge rate on the tax payable for such incomes will be 15%.
The surcharge rate for an Association of Persons (AOP) consisting entirely of companies will also be limited to 15%.
Additional Health and Education cess at the rate of 4% will be added to the income tax liability.
Exemptions and Deductions Not Claimable under the New Tax Regime
The following are some of the major deductions and exemptions you cannot claim under the new tax regime:
- The deduction under Section 80TTA/80TTB
- Professional tax and entertainment allowance on salaries
- Leave Travel Allowance (LTA)
- House Rent Allowance (HRA)
- Allowances to MPs/MLAs
- Minor child income allowance
- Helper allowance
- Children education allowance
- Other special allowances [Section 10(14)]
- Additional depreciation under section 32(1)(iia)
- Deductions under section 32AD, 33AB, 33ABA
- Various deductions for donation for or expenditure on scientific research contained in section 35(2AA) or 35(1)(ii) or (iia) or (iii)
- Deduction under section 35AD or section 35CCC
- Interest on housing loan on the self-occupied property or vacant property (Section 24)
- Chapter VI-A deduction (Section 80C, 80D, 80E and so on, except Section 80CCD(2) and Section 80JJAA)
- Exemption or deduction for any other perquisites or allowances including food allowance of Rs 50/meal subject to 2 meals a day
- Employee’s (own) contribution to NPS
- Donation to Political party/trust etc
What are the Exemptions and Deductions Available Under the New Regime?
Under the New tax regime, you can claim tax exemption for the following:
- Transport allowances in case of a specially-abled person.
- Conveyance allowance received to meet the conveyance expenditure incurred as part of the employment.
- Any compensation received to meet the cost of travel on tour or transfer.
- Daily allowance received to meet the ordinary regular charges or expenditure you incur on account of absence from his regular place of duty.
- Perquisites for official purposes
- Exemption on voluntary retirement 10(10C), gratuity u/s 10(10) and Leave encashment u/s 10(10AA)
- Interest on Home Loan on let-out property (Section 24)
- Gifts up to Rs 50,000
- Deduction for employer’s contribution to NPS account [Section 80CCD(2)]
- Deduction for additional employee cost (Section 80JJA)
- Budget 2023 introduced a standard deduction of Rs 50,000 under New Tax Regime applicable from FY 2023-24. This has been increased to Rs.75,000 in Budget 2024 applicable from FY 2024-25
- Budget 2023 also introduced deduction under Section 57(iia) of family pension income
- Budget 2023 further introduced deduction of amount paid or deposited in the Agniveer Corpus Fund under Section 80CCH(2)
- In Budget 2024 Limit of maximum Deduction under Family Pension has been increased from Rs. 15,000 to Rs. 25,000.
- The deduction on employers contribution to pension Scheme as per Section 80CCD (2) has been increased from 10% of salary to the 14% of salary in Budget 2024.
Here’s a detailed list of exemptions and deductions available under the Old vs New Regime.
Old Tax Regime Vs New Tax Regime – Which is Better?
The new tax regime can largely benefit middle-class taxpayers who have a taxable income of up to Rs 15 lakh. The old regime is a better option for high-income earners.
The new income tax regime is beneficial for people who make low investments. As the new regime offers six lower-income tax slabs, anyone paying taxes without claiming tax deductions can benefit from paying a lower rate of tax under the new tax regime. For instance, the assessee having total income before deduction up to Rs 12 lakh will have higher tax liability under the old system if they have investments less than Rs. 3,12,500. Therefore, if you invest less in tax-saving schemes, go for the new regime.
That being said, if you already have in place a financial plan for wealth creation by making investments in tax-saving instruments; medical claims and life insurance; making payments of children’s tuition fees; payment of EMIs on education loan; buying a house with a home loan; and so on, the old regime helps you with higher tax deductions and lower tax outgo.
In light of the above and considering the new income tax regime, if taxpayers want to opt for the concessional tax rates, they may evaluate both regimes. Hence, it is advisable to do a comparative evaluation and analysis under both regimes and then choose the most beneficial one, as it may vary from person to person. Read a detailed breakdown on this topic here.
When Can I Opt for Old vs New Regime?
| Nature of Income | Time of Selection of option of old vs new regime |
| Income from Salary or any other head of income attracting TDS | At the start of the financial year, an employee has the choice to select the tax regime and inform their employer, whereas the default regime shall be a new tax regime. It cannot be modified during the year. However, the option can be modified when filing the Income Tax Return. |
| Income from Business & Profession | In case you have Business or professional income, the choice between tax regimes can only be made once in a lifetime. |
Income Tax Rate for Domestic Companies
| Particulars | Old regime Tax rates | New Regime Tax rates |
| Company opts for section 115BAB (not covered in sections 115BA and 115BAA) & is registered on or after October 1, 2019, and has commenced manufacturing on or before 31st March 2024 and subject to the conditions specified in the section. | – | 15% |
| Company opts for Section 115BAA, wherein the total income of a company has been calculated without claiming specified deductions, incentives, or exemptions and additional depreciation as specified in the section. | – | 22% |
| The company opts for section 115BA registered on or after March 1, 2016 and engaged in the manufacture of any article or thing and does not claim the deduction as specified in the section. | – | 25% |
| Turnover or gross receipt of the company is less than Rs. 400 crore in the previous year 2020-21 | 25% | 25% |
| Any other domestic company | 30% | 30% |
*Please refer to the new sections for checking the applicability for the above concessional income tax rates.
NOTE:
- Additional Health and Education cess at the rate of 4 % will be added to the income tax liability in all cases.
- Surcharge applicable for companies is as below:
- 7% of Income tax where total income > Rs 1 crore,
- 12% of Income tax where total income > Rs.10 crore,
- 10% of income tax where domestic company opted for section 115BAA and 115BAB.
Income Tax Rate for Partnership Firm or LLP as per Old/New Regime
A partnership firm/ LLP is taxable at 30%.
NOTE:
- 12% Surcharge is levied on income is more than Rs 1 crore
- Health and Education Cess at the rate of 4% will be applicable
- No concessional rates are introduced for firms LLPs in the next tax regime
Income Tax Slab for FY 2024-25 for Domestic Companies
| Turnover Particulars | Tax Rate |
| Gross turnover up to 400 Cr. in the previous year | 25% |
| Gross turnover exceeding 400 Cr. in the previous year | 30% |
NOTE:
- In addition cess and surcharge are levied as follows:
- Cess: 4% of corporate tax
- Surcharge applicability:
- Taxable income is more than 1 Crore but less than 10 Crores: 7%
- Taxable income is more than 10 Crores: 12%
Income Tax Slab Rates for FY 2019-20, FY 2020-21, FY 2021-22 and FY 2022-23
Income tax slab for Individual aged below 60 years & HUF
| Income Tax Slab | Tax Rates for Individual & HUF Below the Age Of 60 Years & NRIs |
| Up to ₹2,50,000* | Nil |
| ₹2,50,001 to ₹5,00,000 | 5% |
| ₹5,00,001 to ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
NOTE:
- Income tax exemption limit is up to Rs 2,50,000 for Individuals, HUF below 60 years aged and NRIs
- Surcharge and cess will be applicable as discussed above
- An additional 4% Health & education cess will be applicable on the tax and surcharge amount
Income tax slab for Individual aged above 60 years to 80 years
| Income Tax Slab | Tax Rates for Senior citizens aged above 60 Years & Less than 80 Years |
| Up to ₹ 3,00,000* | No tax |
| ₹3,00,000 – ₹5,00,000 | 5% |
| ₹5,00,000 – ₹10,00,000 | 20% |
| More than ₹10,00,000 | 30% |
NOTE:
- Income tax exemption limit is up to Rs.3 lakh for senior citizens aged above 60 years but less than 80 years.
- Surcharge and cess will be applicable as discussed above
Income tax slab for Individual aged more than 80 years
| Income Tax Slab | Tax Rates for Super Senior Citizens (Aged 80 Years And Above) |
| Up to ₹5,00,000* | No tax |
| ₹5,00,000 – ₹10,00,000 | 20% |
| More than ₹10,00,000 | 30% |
NOTE:
- Income tax exemption limit is up to Rs 5 lakh for super senior citizen aged above 80 years.
- Surcharge and cess will be applicable as discussed above.
Income Tax Slab FY 2019-20, FY 2020-21, FY 2021-22 and FY 2022-23 for Domestic Companies
| Turnover Particulars | Tax Rate |
| Gross turnover up to 250 Cr. in the previous year | 25% |
| Gross turnover exceeding 250 Cr. in the previous year | 30% |
NOTE:
- In addition cess and surcharge are levied as follows:
- Cess: 4% of corporate tax
- Surcharge applicability:
- Taxable income is more than 1 Crore but less than 10 Crores: 7%
- Taxable income is more than 10 Crores: 12%
FY 2018-19: Income Tax Slab Rates
Income tax slab for Individual aged below 60 years & HUF
| Income Tax Slab | Tax Rates for Individual & HUF Below the Age Of 60 Years |
| Income up to Rs 2,50,000* | No tax |
| Income from Rs 2,50,000 – Rs 5,00,000 | 5% |
| Income from Rs 5,00,000 – 10,00,000 | 20% |
| Income more than Rs 10,00,000 | 30% |
NOTE:
- An additional 4% Health & education cess will be applicable on the tax amount calculated as above.
- Surcharge applicability:
- 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.
- 15% of income tax, where the total income exceeds Rs.1 crore.
Income tax slab for Individuals aged above 60 years to 80 years
| Income Tax Slab | Tax Rate for Senior citizens aged 60 Years But Less than 80 Years |
| Income up to Rs 3,00,000* | No tax |
| Income from Rs 3,00,000 – Rs 5,00,000 | 5% |
| Income from Rs 5,00,000 – 10,00,000 | 20% |
| Income more than Rs 10,00,000 | 30% |
NOTE:
- An additional 4% Health & education cess will be applicable on the tax amount calculated as above.
- Surcharge applicability:
- 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.
- 15% of income tax, where the total income exceeds Rs.1 crore.
Income tax slab for Individuals aged more than 80 years
| Income Tax Slab | Tax Rates for Super Senior Citizens (Aged 80 Years And Above) |
| Income up to Rs 5,00,000* | No tax |
| Income from Rs 5,00,000 – Rs 10,00,000 | 20% |
| Income more than Rs 10,00,000 | 30% |
NOTE:
- An additional 4% Health & education cess will be applicable on the tax amount calculated as above.
- Surcharge applicability:
- 10% of income tax, where total income exceeds Rs.50 lakh up to Rs.1 crore.
- 5% of income tax, where the total income exceeds Rs.1 crore