Understanding India’s income tax slabs for individuals is crucial for effective financial planning. For FY 2024-2025, taxpayers can choose between two regimes: the traditional old regime offering a range of exemptions and deductions, and the new tax regime with lower rates but limited deductions. Selecting the appropriate tax regime can maximize savings, optimize investments, and align with personal financial goals. This guide provides a breakdown of the latest tax slabs, a comparison of both regimes, and tips to help you make the most strategic choice. Let’s explore effective tax planning for the upcoming year.
Understanding Income Tax Slabs
In India, income tax slabs for individuals are divided into specific income ranges, each with its applicable tax rate. These slabs may vary by age group, including regular taxpayers, senior citizens (60 years and above), and super senior citizens (80 years and above), each with distinct exemption limits and benefits.
Taxpayers can currently choose between:
- Old Tax Regime: Allows various deductions and exemptions, but with higher tax rates.
- New Tax Regime: Offers lower tax rates with limited deductions for simplified filing.
Tax Slabs Under the New Tax Regime for FY 2024-2025 (No Age Limit)
| Income Range | 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% |
Tax Slabs Under the Old Tax Regime for FY 2024-2025 (Individuals Below 60 Years)
| Income Range | Income Tax Rate (%) |
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 to ₹5,00,000 | 5% |
| ₹5,00,001 to ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Note: The income tax exemption limit is up to ₹2,50,000 for individuals, HUFs below 60 years, and NRIs. Surcharges and cess are additionally applicable.
Tax Slabs Under the Old Tax Regime for Senior Citizens (60 to 79 Years)
| Income Range | Income Tax Rate (%) |
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 to ₹5,00,000 | 5% |
| ₹5,00,001 to ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Tax Slabs Under the Old Tax Regime for Super Senior Citizens (80 Years and Above)
| Income Range | Income Tax Rate (%) |
| Up to ₹5,00,000 | Nil |
| ₹5,00,001 to ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
How to Calculate Income Tax as per New & Old Tax Regime
Example: Mr. A, aged 45, is a resident individual with an annual salary income of ₹10,00,000. He has invested ₹1,50,000 in PPF and paid ₹2,00,000 in housing loan interest. Here’s the tax calculation under both regimes.
| Particulars | Old Regime | New Regime |
| Gross Salary | ₹10,00,000 | ₹10,00,000 |
| (-) Standard Deduction | ₹50,000 | ₹75,000 |
| (-) Interest on Housing Loan | ₹2,00,000 | – |
| (-) 80C PPF | ₹1,50,000 | – |
| Net Income | ₹6,00,000 | ₹9,25,000 |
| Tax on Net Income* | ₹32,500 | ₹42,500 |
| CESS @4% | ₹1,300 | ₹1,700 |
| Total Tax | ₹33,800 | ₹44,200 |
*Tax Calculation Breakdown
| Income Range | Tax Amount (Old) | Tax Amount (New) |
| Up to ₹2,50,000 | Nil | Up to ₹3,00,000 |
| ₹2,50,001 – ₹5,00,000 | ₹12,500 | ₹20,000 |
| ₹5,00,001 – ₹6,00,000 | ₹20,000 | ₹25,500 |
Deductions and Exemptions under Old & New Tax Regime
| Particulars | Old regime | New regime |
| 1. Standard Deduction | 50,000 | 75,000 |
| 2. House Rent Allowance (HRA) | ✓ | ✘ |
| 3. Leave Travel Allowance (LTA) | ✓ | ✘ |
| 4. Section 80C (Investments in PPF, NSC, ELSS, etc.) | ✓ | ✘ |
| 5. Section 80CCC (Pension Funds) | ✓ | ✘ |
| 6. Section 80CCD(1) (Employee’s NPS Contribution) | ✓ | ✘ |
| 7. Section 80CCD(1B) (Additional NPS Contribution) | ✓ | ✘ |
| 8. Section 80CCD(2) (Employer’s NPS Contribution) | ✓ | ✓ |
| 9. Section 80D (Health Insurance Premiums) | ✓ | ✘ |
| 10. Section 80DD (Maintenance of Disabled Dependent) | ✓ | ✘ |
| 11. Section 80DDB (Medical Expenses for Specified Diseases) | ✓ | ✘ |
| 12. Section 80E (Interest on Education Loan) | ✓ | ✘ |
| 13. Section 80EE (Interest on Home Loan for First-Time Buyers) | ✓ | ✘ |
| 14. Section 80EEA (Interest on Home Loan for Affordable Housing) | ✓ | ✘ |
| 15. Section 80EEB (Interest on Loan for Electric Vehicle) | ✓ | ✘ |
| 16. Section 80G (Donations to Charitable Institutions) | ✓ | ✘ |
| 17. Section 80GG (Rent Paid for Accommodation) | ✓ | ✘ |
| 18. Section 80GGA (Donations for Scientific Research or Rural Development) | ✓ | ✘ |
| 19. Section 80GGB (Contributions to Political Parties by Companies) | ✓ | ✘ |
| 20. Section 80GGC (Contributions to Political Parties by Individuals) | ✓ | ✘ |
| 21. Section 80TTA (Interest on Savings Account) | ✓
|
✘ |
| 22. Section 80TTB (Interest on Deposits for Senior Citizens) | ✓ | ✘ |
| 23. Section 80U (Self-Disability Deduction) | ✓ | ✘ |
| 24. Professional Tax | ✓ | ✘ |
| 25. Entertainment Allowance | ✓ | ✘ |
| 26. Interest on Home Loan (Section 24 (b)) | ✓ | ✘ |
| 27. Family Pension Deduction | ✓ | ✘ |
| 28. Special Allowances (Section 10(14)) | ✓ | ✘ |
Surcharges and Cess Explained
Surcharge: Additional tax on higher incomes. Rates for individuals:
- ₹50,00,000 to ₹1,00,00,000: 10%
- ₹1,00,00,001 to ₹2,00,00,000: 15%
- Above ₹2,00,00,000: 25%
Cess: A 4% Health and Education Cess is charged on the total tax (including surcharge) to support public health and education initiatives.
Example: If your tax is ₹1,00,000 and surcharge is 15%, the surcharge would be ₹15,000. A 4% cess on the total (₹1,15,000) adds ₹4,600, totaling ₹1,19,600.
FAQs on Income Tax Slabs
- Who updates India’s income tax slabs?
The Finance Ministry of India proposes changes to tax slabs, announced during the annual budget by the finance minister. - What differentiates the old tax regime from the new tax regime?
The old regime includes deductions and exemptions, while the new regime offers lower rates with limited deductions for simplicity. - Which tax regime is beneficial for a ₹12 lakh income?
For ₹12 lakh, the new regime has a lower rate (15%). If eligible for deductions, the old regime may be more advantageous. - Who should choose the new tax regime?
If deductions total less than ₹3.75 lakh, especially with an income of ₹20 lakh or more, the new regime might be beneficial. - Is the 80C deduction available in the new tax regime?
No, deductions under Section 80C are not allowed in the new tax regime. - How does Section 87A rebate make ₹7 lakh income tax-free?
Section 87A provides a rebate of up to ₹25,000, making income up to ₹7 lakh tax-free under the new regime. - Can I switch tax regimes annually?
Yes, taxpayers can switch between the old and new regimes each year when filing their Income Tax Return (ITR). - What are surcharges and cess in income tax?
A surcharge is additional tax for high-income earners, while a 4% Health and Education Cess applies on total tax. - Which deductions aren’t available in the new tax regime?
Most deductions, including 80C, 80D, HRA, and education loan interest (80E), are not available in the new regime. - Is the ₹75,000 standard deduction applicable in the new regime for FY 2024-25?
Yes, a ₹75,000 standard deduction is available under the new regime, enhancing tax benefits in the simplified structure.
For professional assistance on selecting the right tax regime and maximizing tax savings, contact ApkiReturn at 7665156000 or email info@apkireturn.com. Visit www.apkireturn.com to streamline your tax filing process and ensure compliance for FY 2024-2025.
