The income tax slabs in the new tax regime have been changed slightly. As per the announcement, instead of 6, now there will be 5 income tax slabs.
The New Slabs and new Income tax rates under the new income tax regime will be as follows:
- Upto Rs 4 lakh – 0% tax
- Between Rs 4-8 lakh – 5% tax
- Between Rs 8-12 lakh – 10% tax
- Between Rs 12-16 lakh – 15% tax
- Between Rs 16-20 lakh – 20% tax
- Between Rs 20-24 lakh – 25% tax
- Above Rs 24 lakh – 30% tax
Also, if someone is earning less than Rs 12 lakh and has opted for the new tax regime, then he/she will not have to pay any taxes as they will get a rebate under section 87A up to Rs 12 lakh taxable income. That is you have a Tax-Free Income of Rs 12 lakh under the new regime.
The new tax income tax slabs in the new tax regime will be effective from 1st April 2025 onwards.
As per the government announcements (link), the below image captures the increased tax savings due to the modifications in the tax slabs for the new regime:
Here is the comparison between the old vs new regime tax rates.
Also, the new income tax regime will continue to be the default tax regime. However, individuals will still have an option to continue with the old income tax regime if they want.
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