Are you a salaried employee, small business owner, freelancer, or ITR filer? Then this news is for you!
The Union Budget 2025-26 has introduced a revised income tax slab structure under the new tax regime, aiming to reduce the burden on middle-class taxpayers and boost disposable income. Let's break it down in simple terms.

Key Highlights at a Glance

• Tax-free income limit increased to ₹4 lakh
• Full rebate on income up to ₹12 lakh under Section 87A
• Slabs now range from 5% to 30%, with broader tax bands
• Aimed to benefit salaried class, small businesses, pensioners, and gig workers
• New regime continues to be optional – old regime still available

Revised Income Tax Slabs (New Regime) for FY 2025-26

• Standard Deduction for Salaried Individuals: ₹75,000
• Rebate under Section 87A raised to ₹60,000 (up from ₹25,000)

This means if your net taxable income is ₹12 lakh or less, you won’t pay any tax under the new regime!

Backed by Legislation

• These changes were proposed in the Union Budget 2025-26 and will be part of the upcoming Income Tax (Amendment) Bill, which aims to modernize and simplify India's tax structure. The goal is to increase voluntary compliance, reduce disputes, and promote digital ITR filing and paperless assessments.

Backed by Legislation

• These changes were proposed in the Union Budget 2025-26 and will be part of the upcoming Income Tax (Amendment) Bill, which aims to modernize and simplify India's tax structure. The goal is to increase voluntary compliance, reduce disputes, and promote digital ITR filing and paperless assessments.

Why This Matters for You

• Whether you're a salaried employee, running a business, or working as a freelancer, these changes could significantly reduce your tax outgo. Let’s see how:
  • For Salaried Employees
    • Higher take-home salary
    • No tax up to ₹12.75 lakh (including standard deduction)
  • For Business Owners
    • Simpler tax planning
    • No complex exemptions to claim
  • For Freelancers & Consultants
    • Clear tax slabs
    • Less documentation, easy ITR e-filing

Old vs New Regime: Which One Should You Choose?

• Even with the new slabs, the choice between the old and new tax regimes remains. You should compare:
  • Old Regime: More deductions (80C, HRA, etc.)
  • New Regime: Lower rates, no deductions
• Tip: If your investments and deductions exceed ₹2.5-3 lakh annually, the old regime may still be better. Otherwise, switch to the new one!

Example Scenario

• Imagine a salaried individual earning ₹10 lakh/year:
  • Under old regime: After deductions, tax may still apply
  • Under new regime: After standard deduction + Section 87A rebate, total tax = ₹0
• That’s real savings in your pocket!

Final Thoughts

• The new tax regime has become even more attractive with increased exemptions and broader slabs. Whether you're filing your ITR as a salaried employee, business owner, or freelancer, these updates can help you save more and plan smarter.

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