Income Tax Slab 2025-26: Major Updates and What They Mean for You

The Union Budget 2025-26 has brought significant changes to the Income Tax Slabs under the New Tax Regime, giving relief to millions of taxpayers. Here’s a simple breakdown of what has changed and how it affects you.

Key Highlights of Income Tax Changes for 2025-26

  1. No Tax on Income up to ₹12 Lakh
    • The government has increased the rebate limit under the New Tax Regime.
    • If your total income is ₹12 lakh or less, you don’t have to pay any income tax.
  2. Revised Tax Slabs Under New Regime The new tax rates are as follows:
Income Range (₹)Tax Rate
0 – 4 lakhNil
4 – 8 lakh5%
8 – 12 lakh10%
12 – 16 lakh15%
16 – 20 lakh20%
20 – 24 lakh25%
Above 24 lakh30%
  1. No Changes in the Old Tax Regime
    • The Old Tax Regime remains unchanged.
    • Over 70% of taxpayers have switched to the New Tax Regime, making it the preferred choice for many.
  2. TDS Changes for Senior Citizens
    • The TDS threshold on interest income from deposits has been increased to ₹1 lakh (from ₹50,000 earlier), offering better financial security to senior citizens.
  3. Foreign Direct Investment (FDI) in Insurance Increased
    • The FDI limit for insurance has been raised to 100%.
    • This will encourage more investment in the Indian insurance sector.
  4. Boost to Women Entrepreneurs and Startups
    • New Fund of Funds introduced for startups.
    • ₹10,000 crore fresh contribution announced.
    • Special loan scheme offering loans up to ₹5 crore for women entrepreneurs.
  5. Simplified New Income Tax Bill
    • A revamped tax bill will be introduced soon.
    • It will be 50% shorter, reducing legal complexities and making tax filing easier.

What Should You Do Next?

Check which tax regime suits you better – New or Old.

Update your investment and tax-saving strategies.

Plan financial decisions accordingly to take full advantage of the new tax benefits.

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