New Income Tax

The Indian government has introduced a revised income tax slab system for the financial year 2025. This new structure aims to simplify taxation and provide relief to taxpayers.

New Income Tax Slabs (FY 2025-26)

Annual Income Range	Tax Rate
Rs 0 - 4 lakh	Nil
Rs 4 - 8 lakh	5%
Rs 8 - 12 lakh	10%
Rs 12 - 16 lakh	15%
Rs 16 - 20 lakh	20%
Rs 20 - 24 lakh	25%
Above Rs 24 lakh	30%

Comparison: Previous New vs. Current New Tax Regime

Income Range	Previous New Regime Tax (FY 2023-24)	Current New Regime Tax (FY 2025-26)	Savings
Rs 8 - 12 lakh	15%	10%	Rs 20,000
Rs 12 - 16 lakh	20%	15%	Rs 20,000
Rs 16 - 20 lakh	25%	20%	Rs 20,000
Rs 20 - 24 lakh	30%	25%	Rs 20,000

Example Calculations

Example 1: Annual Income of Rs 10 Lakh

• Previous Tax: Rs 50,000
• Current Tax: Rs 40,000
• Savings: Rs 10,000

Example 2: Annual Income of Rs 18 Lakh

• Previous Tax: Rs 2,10,000
• Current Tax: Rs 1,60,000
• Savings: Rs 50,000

How to Reduce Your Tax Liability?

Here are some smart ways to save on taxes:

• Invest in Tax-Saving Instruments: PPF, ELSS, NPS, and Fixed Deposits (FDs) provide tax benefits.
• Claim Deductions: Use Section 80C (up to Rs 1.5 lakh), 80D (medical insurance), and 80E (education loans).
• Optimize HRA and LTA: Salaried employees can claim House Rent Allowance (HRA) and Leave Travel Allowance (LTA) to reduce taxable income.
• Utilize Standard Deduction: A fixed standard deduction is available for salaried individuals, reducing their taxable income.

Conclusion

The revised tax structure aims to simplify taxation and provide relief to different income groups. While low-income earners benefit from zero tax up to Rs 4 lakh, higher earners will see a more structured progressive taxation system. To maximize savings, individuals must carefully plan their investments and expenses.

Disclaimer: The tax rates and slabs mentioned are based on recent announcements. Always consult a tax professional or check official government sources before making financial decisions.