The Union Budget 2025 has introduced significant changes to the income tax regime, benefiting taxpayers across various income brackets. With the rebate raised to Rs. 60,000, individuals earning up to Rs. 12,00,000 will pay zero tax. Let's dive into the numbers and understand how the new tax slabs affect different salary levels.
New Income Tax Slabs for FY 2025-26 (AY 2026-27)
Income Range | Tax Rate |
Up to Rs. 4,00,000 | NIL |
Rs. 4,00,001 - Rs. 8,00,000 | 5% |
Rs. 8,00,001 - Rs. 12,00,000 | 10% |
Rs. 12,00,001 - Rs. 16,00,000 | 15% |
Rs. 16,00,001 - Rs. 20,00,000 | 20% |
Rs. 20,00,001 - Rs. 24,00,000 | 25% |
Above Rs. 24,00,000 | 30% |
Tax Calculation with Examples
Understanding tax calculations under the new regime is crucial. Here’s how it works:
Example 1: Income of Rs. 10,00,000
First Rs. 4,00,000 – No tax
Rs. 4,00,001 - Rs. 8,00,000 (4,00,000 @ 5%) = Rs. 20,000
Rs. 8,00,001 - Rs. 10,00,000 (2,00,000 @ 10%) = Rs. 20,000
Total Tax = Rs. 40,000
Rebate of Rs. 60,000 makes tax payable NIL
Example 2: Income of Rs. 18,00,000
First Rs. 4,00,000 – No tax
Rs. 4,00,001 - Rs. 8,00,000 (4,00,000 @ 5%) = Rs. 20,000
Rs. 8,00,001 - Rs. 12,00,000 (4,00,000 @ 10%) = Rs. 40,000
Rs. 12,00,001 - Rs. 16,00,000 (4,00,000 @ 15%) = Rs. 60,000
Rs. 16,00,001 - Rs. 18,00,000 (2,00,000 @ 20%) = Rs. 40,000
Total Tax = Rs. 1,60,000
Tax Calculator (Based on 2025 Budget New Regime)
Quick Tax Calculation Formula
Example Tax Calculations Based on Different Salary Slabs
Conclusion
The Budget 2025 tax update brings relief for middle-income earners while ensuring a progressive tax structure for higher earners. Understanding these slabs can help you optimize tax planning and savings effectively.
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