The Union Budget 2025 brought the most significant overhaul to personal income tax in over a decade. The most headline-grabbing change is a nil-tax threshold of ₹12 lakh for salaried individuals under the new regime — up from ₹7 lakh previously.
Revised Tax Slabs (New Regime, FY 2025-26)
The new regime slabs from FY 2025-26 onwards:
- Up to ₹4 lakh — Nil
- ₹4L – ₹8L — 5%
- ₹8L – ₹12L — 10%
- ₹12L – ₹16L — 15%
- ₹16L – ₹20L — 20%
- ₹20L – ₹24L — 25%
- Above ₹24L — 30%
Combined with the standard deduction of ₹75,000 and the rebate under Section 87A, a salaried individual with income up to ₹12.75 lakh effectively pays zero income tax.
Old Regime vs New Regime — Which Is Better?
The old regime still benefits those with significant deductions — especially HRA, home loan interest, 80C investments (PPF, ELSS, LIC), and 80D health insurance premiums. If your total deductions exceed approximately ₹5–6 lakh, running both calculations is strongly recommended.