Income Tax Slabs for FY 2025-26 (AY 2026-27): Complete Guide with New Tax Regime
Income Tax Slabs for FY 2025-26 (AY 2026-27): Complete Guide with New Tax Regime
The Finance Act 2025 has brought significant changes to India's income tax structure, making the new tax regime the default option for taxpayers. This comprehensive guide covers everything you need to know about income tax slabs for FY 2025-26.
Key Changes in Income Tax for FY 2025-26
🔥 Major Highlights:
- New Tax Regime is now DEFAULT for all eligible taxpayers
- Zero tax on income up to ₹12 lakhs due to increased rebate
- Basic exemption limit extended to ₹4 lakhs (from ₹3 lakhs)
- 30% tax slab applies on income above ₹24 lakhs (instead of ₹15 lakhs)
New Tax Regime Slabs for FY 2025-26 (Default)
| Income Range | Tax Rate | Tax Amount |
|---|---|---|
| Up to ₹3,00,000 | 0% | Nil |
| ₹3,00,001 - ₹7,00,000 | 5% | ₹20,000 |
| ₹7,00,001 - ₹10,00,000 | 10% | ₹30,000 |
| ₹10,00,001 - ₹12,00,000 | 15% | ₹30,000 |
| ₹12,00,001 - ₹15,00,000 | 20% | ₹60,000 |
| ₹15,00,001 - ₹24,00,000 | 25% | Variable |
| Above ₹24,00,000 | 30% | Variable |
Old Tax Regime Slabs (Optional)
Taxpayers can still opt for the old tax regime with these slabs:
| Income Range | Tax Rate |
|---|---|
| Up to ₹2,50,000 | 0% |
| ₹2,50,001 - ₹5,00,000 | 5% |
| ₹5,00,001 - ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Section 87A Rebate Benefits
New Tax Regime: Rebate of ₹25,000 available for income up to ₹7,00,000
Old Tax Regime: Rebate of ₹12,500 available for income up to ₹5,00,000
Important Filing Information for AY 2025-26
📅 Key Dates:
- ITR Filing Due Date: September 15, 2025
- Revised Return Due Date: December 31, 2025
- Late Filing Fee: Up to ₹5,000 if filed after due date
📋 New Documentation Requirements:
- Additional information for Section 80C deductions
- Details for 80CCD, 80DD, 80U, 80D deductions
- New schedule for Section 24(b): Interest on borrowed capital
Who Should Choose Which Regime?
✅ Choose New Tax Regime If:
- Your income is up to ₹12 lakhs (zero tax)
- You don't claim many deductions under Chapter VI-A
- You want simpler tax calculation
✅ Choose Old Tax Regime If:
- You have significant investments eligible for deductions
- You claim HRA, LTA, or other allowances
- Your total deductions exceed the benefit from new regime
Advance Tax Requirements
If your tax liability exceeds ₹10,000 per year, you must pay advance tax in quarterly installments:
- June 15: 15% of annual tax
- September 15: 45% of annual tax
- December 15: 75% of annual tax
- March 15: 100% of annual tax
Frequently Asked Questions
Q: Can I switch between old and new tax regime every year?
A: Yes, salaried individuals can choose their preferred regime each year while filing ITR. Business owners have some restrictions.
Q: What if I have property income?
A: Single property owners can file ITR-1. Multiple property owners must file ITR-2 or higher.
Q: Is the new regime really beneficial?
A: For income up to ₹12 lakhs, new regime offers zero tax. Calculate both scenarios to decide.
Expert Tips for Tax Planning
- Calculate both regimes before choosing
- Consider future income growth when planning investments
- Keep all tax documents ready before filing
- File ITR early to avoid last-minute rush
- Claim all eligible deductions in old regime
Conclusion
The new tax regime for FY 2025-26 offers significant benefits for middle-income taxpayers, with zero tax on income up to ₹12 lakhs. However, the choice between old and new regime depends on your specific financial situation and deduction eligibility.
Recommendation: Use tax calculators to compare both regimes and choose the one that minimizes your tax liability.
Disclaimer: This information is for general guidance only. Consult a tax professional for specific advice on your situation.
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