Income tax is an important part of any country’s economy, as it is the primary source of government revenue. In India, the income tax system is progressive, which means that the tax rate increases as a person’s income increases. Tax slabs for a particular financial year help determine how much a person should pay based on their income.Here you will know about the income tax rate slabs
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What Are Income Tax Slabs?
Income tax slabs are defined ranges of income, each of which is linked to a specific tax rate. These slabs help determine the percentage of income that will be taxed. The more you earn, the more tax you will have to pay
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Income Tax Slab for 2025
For the financial year 2025-26, the Government of India has made two major income tax changes
- Old tax regime: In this, deductions and exemptions are given, but tax rates are higher.
- New tax regime: In this, tax rates are lower, but most of the deductions and exemptions are removed.
Below are the details of the income tax slabs under both regimes
- Old Tax Regime (With Deductions & Exemptions)
| Income Range (in ₹) | Tax Rate |
| ₹0 – ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Additionally, taxpayers can claim various exemptions and deductions under this scheme. These are as follows:
- Section 80C: Deduction up to ₹1.5 lakh for investments like PPF, ELSS, etc.
- Section 24(b): Deduction up to ₹2 lakh on home loan interest.
- HRA (House Rent Allowance): If applicable.
2. New Tax Regime (Without Deductions & Exemptions)
| Income Range (in ₹) | Tax Rate |
| ₹0 – ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹7,50,000 | 10% |
| ₹7,50,001 – ₹10,00,000 | 15% |
| ₹10,00,001 – ₹12,50,000 | 20% |
| ₹12,50,001 – ₹15,00,000 | 25% |
| Above ₹15,00,000 | 30% |
In this regime, taxpayers cannot claim any exemptions or deductions, but the tax rates are lower
Which system should you choose?
Choosing between the old and new tax regime depends on your individual financial situation
- If you have multiple tax-saving investments and exemptions (like PPF, insurance, home loan interest), select for the old tax regime.
- If you don’t have too many investments or if you prefer the simplicity of lower tax rates without the hassle of filing for deductions, select for the new tax regime.
Frequently Asked Question (FAQ )
Income tax slabs for 2025 are the rates at which your income will be taxed, depending on your income level. These slabs may change annually, so it is important to stay updated with the latest tax rates
The government sets income tax slabs based on the taxpayer’s income. Higher income levels are taxed at a higher rate, while lower income levels are taxed at a lower rate.
Conclusion
Choosing the right income tax slab and regime is essential for your tax planning. If you have significant investments or eligible deductions, the old tax regime can help you save more even with higher tax rates. On the other hand, if you prefer simplicity and don’t use many deductions, the new tax regime with lower tax rates may be a better choice.
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