Income Tax Slabs & Rules (FY 2024-25)
The standard slab structures and standard deductions for FY 2024-25 (AY 2025-26) are as follows:
1. New Tax Regime Slabs
Standard Deduction: ₹75,000
| Income Slab | Tax Rate |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 to ₹7,00,000 | 5% (tax rebate under 87A up to 7L) |
| ₹7,00,001 to ₹10,00,000 | 10% |
| ₹10,00,001 to ₹12,00,000 | 15% |
| ₹12,00,001 to ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
2. Old Tax Regime Slabs (Below 60 Years)
Standard Deduction: ₹50,000
| Income Slab | Tax Rate |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 to ₹5,00,000 | 5% (tax rebate under 87A up to 5L) |
| ₹5,00,001 to ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Step-by-Step Regime Comparison Example
Suppose you have an annual gross salary of ₹12,00,000 with standard deductions:
- New Tax Regime Case:
- Net Income = ₹12,00,000 - ₹75,000 (Std Ded) = ₹11,25,000
- Tax calculation:
- Up to 3L: Nil
- 3L to 7L (4L): 5% = ₹20,000
- 7L to 10L (3L): 10% = ₹30,000
- 10L to 11.25L (1.25L): 15% = ₹18,750
- Total base tax = ₹68,750
- Health & Education Cess (4%) = ₹2,750
- Grand Total = ₹71,500
- Old Tax Regime Case (with ₹1.5L 80C, ₹25k 80D, ₹50k HRA):
- Exemptions & deductions = ₹50,000 (Std Ded) + ₹1,50,000 (80C) + ₹25,000 (80D) + ₹50,000 (HRA) = ₹2,75,000
- Net Taxable Income = ₹12,00,000 - ₹2,75,000 = ₹9,25,000
- Tax calculation:
- Up to 2.5L: Nil
- 2.5L to 5L (2.5L): 5% = ₹12,500
- 5L to 9.25L (4.25L): 20% = ₹85,000
- Total base tax = ₹97,500
- Health & Education Cess (4%) = ₹3,900
- Grand Total = ₹1,01,400
Frequently Asked Questions
For most taxpayers who do not make heavy tax-saving investments (under Section 80C, 80D, HRA, etc.), the New Tax Regime is typically more beneficial due to lower tax rate slabs and an increased standard deduction of ₹75,000. However, if your tax-saving deductions exceed ₹3,75,000, the Old Tax Regime may save you more money. Use our side-by-side comparison to find out instantly.
Common deductions include: Section 80C (up to ₹1.5 Lakhs for PPF, EPF, ELSS, Life Insurance), Section 80D (up to ₹25,000 for self/family and ₹50,000 for parents' health insurance premiums), Section 24b (up to ₹2 Lakhs interest on home loans), HRA (House Rent Allowance), and standard deduction (₹50,000).
Under the New Regime, you get a full rebate up to ₹7 Lakhs of taxable income, meaning you pay zero tax if your taxable income is ₹7 Lakhs or less. Under the Old Regime, the rebate applies only up to ₹5 Lakhs of taxable income.