With the start of the financial year 2025-26, the Indian government has introduced new income tax rules that will directly impact taxpayers. From revised tax slabs to changes in deductions and exemptions, here’s everything you need to know to stay compliant and maximize your savings.
1. New Income Tax Slabs 2025 (For Individuals)
The government has revised the tax slabs under the new tax regime to provide more relief to middle-class taxpayers. Here’s the updated structure:
| Income Range | Tax Rate (New Regime) | Tax Rate (Old Regime) |
|---|---|---|
| Up to ₹3 lakh | Nil | Nil |
| ₹3 lakh – ₹6 lakh | 5% | 5% |
| ₹6 lakh – ₹9 lakh | 10% | 20% |
| ₹9 lakh – ₹12 lakh | 15% | 30% |
| ₹12 lakh – ₹15 lakh | 20% | 30% |
| Above ₹15 lakh | 30% | 30% |
🔹 Standard Deduction of ₹50,000 now available in the new regime. 🔹 The rebate limit under Section 87A is now ₹7 lakh (earlier ₹5 lakh), meaning no tax for income up to ₹7 lakh in the new regime.
2. Changes in Deductions & Exemptions
The government has streamlined tax exemptions to make the tax system simpler. Here are some key updates:
✅ HRA Exemption: Salaried individuals can still claim House Rent Allowance (HRA) under the old tax regime. No HRA benefits in the new regime. ✅ 80C Deductions (₹1.5 lakh limit): Only applicable in the old tax regime for investments like PPF, ELSS, and LIC premiums. ✅ NPS Contribution (Section 80CCD): Government employees can claim an additional deduction of ₹50,000 under 80CCD(1B). ✅ Medical Insurance (Section 80D): Deduction limit remains ₹25,000 for individuals and ₹50,000 for senior citizens. ✅ EPF & PPF Tax-Free Status: Employee Provident Fund (EPF) and Public Provident Fund (PPF) withdrawals remain tax-free.
3. Impact on Salaried Individuals & Businesses
- Salaried professionals: The increased rebate limit and standard deduction under the new regime make it a more attractive option.
- Freelancers & self-employed: Section 44ADA’s presumptive tax scheme now applies to income up to ₹75 lakh (earlier ₹50 lakh), reducing tax liability.
- Startups & MSMEs: The corporate tax rate remains unchanged, but tax incentives for startups have been extended.
4. TDS & Compliance Changes
✅ Higher TDS on Crypto & Digital Assets: TDS on crypto transactions remains at 1% under Section 194S. ✅ Mandatory E-Filing for High Earners: Individuals earning above ₹10 lakh annually must file e-returns. ✅ PAN-Aadhaar Linking: PAN cards not linked with Aadhaar will be deactivated after June 30, 2025.
5. Key Deadlines & Filing Dates for FY 2025-26
🗓️ ITR Filing Last Date: July 31, 2025 🗓️ Audit Report Submission: October 31, 2025 🗓️ Revised Return Deadline: December 31, 2025
Final Thoughts
The new tax regime is now more beneficial for middle-class taxpayers, but those with high deductions (like home loans, LIC, and PPF) may still prefer the old regime. Analyze your tax-saving potential and choose the right tax structure accordingly!
🚀 Stay tuned for more finance updates! Need help with tax planning? Consult a CA or tax expert today!
