Income Tax Slab Alterations for FY 2025–26: All You Need to Know

With the new financial year underway, it’s essential for taxpayers to understand the income tax slab changes for FY 2025–26. Whether you’re a salaried employee, business owner, or senior citizen, being aware of the latest income tax slab helps you plan better and avoid surprises during filing.

India continues with the two-regime tax system — the old regime, which allows multiple deductions and exemptions, and the new regime, which offers lower tax rates but fewer tax-saving options. You can choose either based on which offers you more benefits.

New Income Tax Slab for FY 2025–26 (AY 2026–27)

(As per the new regime, which is now the default)

This applies to all individuals, including salaried workers and pensioners, who opt for the income tax slabs new regime.

Key Features of the New Tax Regime for FY 2025-26

The new income tax regime comes with a simplified structure and uniformity across taxpayer categories. The following features apply exclusively under the new regime:

• Uniform Tax Rates: The tax rates under the new tax regime are the same for all individuals, including senior citizens and super senior citizens.
  
• Tax Rebate: A rebate of up to ₹25,000 is available if the total income does not exceed ₹7,00,000. This income tax rebate is not applicable to NRIs.
  
• Standard Deduction: Salaried employees are eligible for a standard deduction of ₹75,000 under the new regime.
  
• Family Pension Deduction: The deduction limit under family pension income has been increased from ₹15,000 to ₹25,000.
  
• NPS Contribution Deduction: The employer’s contribution towards the National Pension System (NPS) is deductible up to 14% of salary for FY 2025-26.
  
• Surcharge Rate: The highest income tax surcharge under the new tax regime is 25%, reduced from 37% in the old regime.
  
• Default Tax Regime: The new regime is now the default income tax regime, unless a taxpayer chooses to opt for the old one.

Old Regime: Still Available for Those Claiming Deductions

Income Tax Slab For Individuals Below 60 Years

The old regime continues to support those who want to claim deductions under sections like 80C, 80D, and exemptions like HRA.

Income Tax Slab for Senior Citizens (60 to 79 Years)

Income Tax Slab for Super Senior Citizens (80 Years and Above)

The income tax slab for senior citizens above 60 years makes retirement less taxing, literally.