Budget 2025: Comprehensive Guide to New Income Tax Slabs
The finance minister Nirmala Sitharaman has introduced significant changes to the income tax slabs under the new tax regime in the Union Budget 2025. These new slabs will come into effect from April 1, 2025, for the financial year 2025-26. The restructuring of tax slabs aims to simplify the tax system and offer relief to taxpayers across different income brackets.
New Income Tax Slabs for FY 2025-26
Under the revised income tax regime, effective from the financial year 2025–26, the tax slabs have been updated to provide progressive taxation based on income brackets:
- Up to Rs. 4 lakh: No tax
- Rs. 4 lakh to Rs. 8 lakh: 5% tax
- Rs. 8 lakh to Rs. 12 lakh: 10% tax
- Rs. 12 lakh to Rs. 16 lakh: 15% tax
- Rs. 16 lakh to Rs. 20 lakh: 20% tax
- Rs. 20 lakh to Rs. 24 lakh: 25% tax
- Above Rs. 24 lakh: 30% tax
Key Benefits of New Tax Regime
The changes are expected to significantly reduce the tax burden on individuals, with potential tax savings of up to Rs 1.14 lakh per annum. Moreover, the new tax regime continues to remain the default tax regime, meaning taxpayers must actively opt for the old regime if they wish to claim deductions and exemptions available under it.
A major highlight of the Budget 2025 tax reforms is the increase in tax rebate under Section 87A. The rebate has been raised to Rs 60,000, ensuring that individuals with a net taxable income of up to Rs 12 lakh pay no income tax. This marks a substantial increase from the previous rebate limit of Rs 25,000, which applied to incomes up to Rs 7 lakh. Consequently, lower and middle-income taxpayers stand to benefit significantly from this reform.
Comparison Between Old and New Regime
For individuals earning Rs.15 lakh annually – The new tax regime imposes a Rs.1,40,000 tax, compared to Rs.2,62,500 under the old regime, resulting in a saving of Rs.1,22,500. This provides significant relief for middle-income earners.
For individuals earning Rs.25 lakh annually – The new tax regime requires them to pay Rs.4,40,000, compared to Rs.5,62,500 under the previous system. This leads to a tax saving of Rs.1,22,500, increasing disposable income and encouraging investments.
Features of New Tax Regime
- Tax rates are the same for all categories of Individuals
- Rebate: Tax rebate up to Rs.60,000 for income up to Rs.12 lakh
- Standard Deduction: Rs.75,000 for salaried employees
- NPS Contribution: 14% of basic salary by employer
- Highest surcharge rate of 25% (compared to 37% in old regime)
Income Tax Calculator FY 2025-26 in Excel: Understand the New Slab System
In India, income tax is calculated using a slab-based structure, where tax rates increase progressively with income. To help taxpayers easily compute their liabilities, many prefer using tools like the Income Tax Calculator FY 2025-26 in Excel. This makes tax planning simple, transparent, and accurate.
Understanding the Tax Slabs for FY 2025-26 (AY 2026-27)
The new tax regime, which is now the default option, aims to simplify income tax calculations. While individuals can still opt for the old regime, the new structure offers increased benefits for salaried individuals, especially in the middle-income bracket.
Key Highlights of the New Regime:
- Basic Exemption Limit: Raised from ₹3 lakh to ₹4 lakh.
- Section 87A Rebate: Increased to ₹60,000, covering income up to ₹12 lakh.
- Standard Deduction: ₹75,000 for salaried employees.
- Tax-Free Income Limit: Effectively up to ₹12.75 lakh for salaried individuals.
These changes make tools like the Excel Income Tax Calculator FY 2025-26 extremely useful. By inputting your salary, deductions, and applicable slabs, these calculators offer instant results.
Popular Excel Tools for Tax Planning
- ✅ Income Tax Excel Sheet FY 2025-26
- ✅ Income Tax Calculation Excel FY 2025-26
- ✅ Income Tax Calculator 2025-26 Excel Download
- ✅ Tax Calculator Excel Sheet FY 2025-26
- ✅ Income Tax Excel Utility FY 2025-26
- ✅ Excel File for Income Tax Calculation 2025-26
Whether you're a salaried individual or a tax consultant, using an Income Tax Calculator in Excel Format ensures that you're always aligned with the latest tax laws and benefits.
Example: How Income up to ₹12 Lakh Becomes Tax-Free
| Income Range |
Tax Payable |
| Up to ₹4 lakh |
₹0 |
| ₹4 lakh to ₹8 lakh (5%) |
₹20,000 |
| ₹8 lakh to ₹12 lakh (10%) |
₹40,000 |
| Total Tax Before Rebate |
₹60,000 |
| Section 87A Rebate |
-₹60,000 |
| Net Tax Payable |
₹0 |
With the ₹75,000 standard deduction, salaried employees effectively enjoy tax relief on income up to ₹12.75 lakh.
Conclusion
With changes introduced in the FY 2025-26 income tax structure, adopting tools like the Income Tax Excel Sheet FY 2025-26 can ease your burden during filing. The new regime offers significant savings, especially for those earning up to ₹12.75 lakh. Use an Excel Income Tax Calculator FY 2025-26 today to know your tax liability and plan efficiently.
Income Tax Calculator Tools
To help taxpayers navigate these changes, we provide comprehensive Excel-based calculators that simplify tax planning:
- Income Tax Calculator FY 2025-26 in Excel: Complete solution for both old and new tax regimes
- Excel Income Tax Calculator FY 2025-26: Advanced calculations with automatic updates
- Income Tax Excel Sheet FY 2025-26: Detailed breakdown of tax liabilities
- Income Tax Calculator 2025-26 Excel Download: Easy-to-use template for quick calculations
These tools help taxpayers compare both regimes, plan investments, and optimize their tax liabilities under the new system. The Excel-based calculators are particularly useful for salaried individuals and professionals who need detailed tax planning capabilities.