Income tax returns: In the Budget 2025, middle-class taxpayers have received some relief. Under the new tax regime announced by Finance Minister Nirmala Sitharaman, individuals earning up to Rs 12 lakh annually will no longer be required to pay any income tax. The exemption limit has been raised, and tax slabs have been adjusted to provide this relief.
For salaried employees, the tax-free limit will be Rs 12.75 lakh per year, taking into consideration a standard deduction of Rs 75,000. Various exemptions and changes have been implemented in the new income tax regime to benefit the middle class.
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However, taxpayers should note the revised tax slabs and rates announced in Budget 2025-26 will only be applicable for the Financial Year (FY) 2025-26, corresponding to the Assessment Year (AY) 2026-27. Taxpayers should be aware that these changes will not apply to the FY2024-25.
The new tax slabs are for income earned between April 1, 2025, and March 31, 2026. Income Tax returns for this period will be filed in AY 2026-27 (2026). For tax filing in 2025, the rates announced in Budget 2024-25 will still be in effect.
ITR filing in 2025 for FY2024-25
The tax rates set forth in Budget 2024-25 will continue to apply for the 2025 tax filing season.
The key points of the new tax rules for the fiscal year 2024-25 are outlined below:
> Default tax regime: The default tax regime is in effect. Individuals who wish to opt for the old regime must submit Form 10-IEA.
> Basic exemption limit: The basic exemption limit is set at Rs. 3 lakhs for all individuals, regardless of their age.
> Rebate u/s 87A: Individual taxpayers qualify for a rebate under section 87A if their income does not exceed Rs. 7 lakhs, resulting in zero tax liability for incomes below Rs. 7 lakhs.
> Surcharge: The maximum surcharge rate in the new regime is 25%, a reduction from the 37% rate in the old regime.
> Tax rebate of up to Rs. 25,000 available for total income not exceeding Rs. 7,00,000 (excludes NRIs).
> If you want to file your ITR under the old regime then you have to file Form 10-IEA.
New Tax Regime for FY2024-25
Tax Slab for FY 2024-25
Salary slab Tax Rate
Up to Rs 3 lakh NIL
Rs 3-7 lakh 5%
Rs 7-10 lakh 10%
Rs 10-12 lakh 15%
Rs 12-15 lakh 20%
Rs 15 lakh & up 30%
Old Tax Regime for FY2024-25
Tax Slabs for FY2024025
Old Tax Regime New Tax Regime
Up to Rs 2.50L NIL NIL
Rs 2.50-3L 5% NIL
Rs 3-5L 5% 5%
Rs 5-Rs 6L 20% 5%
Rs 6-7L 20% 5%
Rs 7-9L 20% 10%
Rs 9-Rs 10L 20% 10%
Rs 10-12L 30% 15%
Rs 12-12.50L 30% 20%
Rs 12.50-15L 30% 20%
Rs 15L and above 30% 30%