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
- 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.
- Revised Tax Slabs Under New Regime The new tax rates are as follows:
Income Range (₹) | Tax Rate |
0 – 4 lakh | Nil |
4 – 8 lakh | 5% |
8 – 12 lakh | 10% |
12 – 16 lakh | 15% |
16 – 20 lakh | 20% |
20 – 24 lakh | 25% |
Above 24 lakh | 30% |
- 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.
- 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.
- 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.
- 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.
- 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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