Until 31st March 2025 (FY 2024-25)
✅ Income up to ₹7 lakh is tax-free due to a rebate under Section 87A. ✅ Salaried employees & pensioners get an extra ₹75,000 standard deduction. ✅ No tax liability if total income is within ₹7 lakh.
From 1st April 2025 (FY 2025-26)
✅ Tax-free income limit increases to ₹12 lakh. ✅ A rebate of ₹60,000 ensures zero tax for income up to ₹12 lakh. ✅ Standard deduction of ₹75,000 continues for salaried individuals.
Key Takeaway: If your income is up to ₹7 lakh, you pay zero tax until 31st March 2025. From 1st April 2025, this increases to ₹12 lakh!
Updated Income Tax Slab Rates
For FY 2024-25 (AY 2025-26)
| Annual Income (₹) | Tax Rate (%) |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 to ₹7,00,000 | 5% |
| ₹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% |
For FY 2025-26 (AY 2026-27)
| Annual Income (₹) | Tax Rate (%) |
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 to ₹8,00,000 | 5% |
| ₹8,00,001 to ₹12,00,000 | 10% |
| ₹12,00,001 to ₹16,00,000 | 15% |
| ₹16,00,001 to ₹20,00,000 | 20% |
| ₹20,00,001 to ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Biggest Change: The highest tax rate of 30% now applies only for income above ₹24 lakh (earlier ₹15 lakh).
Rebate, Standard Deduction, Surcharge & Cess
Rebate Under Section 87A
FY 2024-25: If taxable income does not exceed ₹7 lakh, a rebate of ₹25,000 is provided under Section 87A, reducing tax liability to zero.
FY 2025-26: If taxable income does not exceed ₹12 lakh, a rebate of ₹60,000 is provided under Section 87A, reducing tax liability to zero.
Conditions for 87A Rebate:
✅ Only applicable to resident individuals (HUFs, companies, and firms not eligible). ✅ Rebate is applied before adding surcharge and cess. ✅ If total taxable income exceeds ₹7 lakh (for FY 2024-25) or ₹12 lakh (for FY 2025-26), no rebate is available. ✅ Capital Gains & Special Income: The rebate does not apply if total income includes long-term capital gains (LTCG) taxable under Section 112 or 112A, or short-term capital gains under Section 111A.
Surcharge on High-Income Earners
10% for income between ₹50 lakh - ₹1 crore
15% for income between ₹1 crore - ₹2 crore
25% for income above ₹2 crore
Health & Education Cess
4% on total tax, including surcharge
Deductions Available: New Regime vs. Old Regime
| Deduction/Exemption | Old Tax Regime | New Tax Regime |
| Standard Deduction (₹75,000) | ✅ Available | ✅ Available |
| Section 80C (LIC, PPF, EPF, etc.) | ✅ Available | ❌ Not Available |
| Section 80D (Health Insurance) | ✅ Available | ❌ Not Available |
| HRA (House Rent Allowance) | ✅ Available | ❌ Not Available |
| Section 80E (Education Loan) | ✅ Available | ❌ Not Available |
| Section 80G (Donations) | ✅ Available | ❌ Not Available |
| LTA (Leave Travel Allowance) | ✅ Available | ❌ Not Available |
| Home Loan Interest (Section 24b) | ✅ Available | ❌ Not Available |
| Section 80CCD(1B) (NPS Additional ₹50,000) | ✅ Available | ❌ Not Available |
| Section 80CCD(2) (Employer Contribution to NPS) | ✅ Available | ✅ Available |
Important:
Old Tax Regime Deductions Are Available Only If Opted for in Time (before filing returns).
The New Tax Regime is the Default from FY 2023-24 Onwards (unless you opt for the old regime while filing your return).
Capital Gains Taxation Under New Tax Regime
| Type of Capital Gain | Old Regime | New Regime |
| Long-Term Capital Gains (LTCG) on Shares & Equity MF (Sec 112A) | 10% (above ₹1 lakh) | ✅ 10% (above ₹1 lakh) |
| LTCG on Property & Other Assets (Sec 112) | 20% with indexation | ✅ 20% with indexation |
| Short-Term Capital Gains (STCG) on Shares & Equity MF (Sec 111A) | 15% | ✅ 15% |
| STCG on Property & Other Assets | As per slab rates | ✅ As per slab rates |
📌 Key Note:
Capital Gains are not eligible for Section 87A rebate.
If income includes capital gains, the rebate is not applicable, and tax is calculated separately.
Conclusion: ₹7 Lakh or ₹12 Lakh Tax-Free?
✅ If your income is up to ₹7 lakh, you don’t pay tax until 31st March 2025. ✅ From 1st April 2025, the tax-free limit rises to ₹12 lakh. ✅ Salaried employees & pensioners enjoy ₹75,000 standard deduction for extra savings.
📢 What Should You Do?
🔹 If your income is below ₹7 lakh, no tax for FY 2024-25. 🔹 If your income is up to ₹12 lakh, zero tax from 1st April 2025. 🔹 Consider switching to the new tax regime if you don’t claim deductions under 80C, 80D, HRA, etc
