FinanceSphere India • Tax reference guide
India tax slabs FY 2025–26: new regime vs old regime with real salary examples
Salaried employees comparing take-home impact at ₹8L, ₹12L, ₹18L, and ₹25L — with key FY 2025–26 changes including the raised standard deduction and ₹7L zero-tax threshold under new regime.
FinanceSphere Editorial Team produces and reviews calculators, comparisons, and guides using a methodology-first process designed for real household decisions under constraints.
New tax regime slabs (FY 2025–26) — default regime
| Income range | Tax rate | Notes |
|---|---|---|
| Up to ₹3,00,000 | Nil | Fully exempt |
| ₹3,00,001 – ₹7,00,000 | 5% | Rebate u/s 87A: no tax if total income ≤ ₹7L |
| ₹7,00,001 – ₹10,00,000 | 10% | |
| ₹10,00,001 – ₹12,00,000 | 15% | |
| ₹12,00,001 – ₹15,00,000 | 20% | |
| Above ₹15,00,000 | 30% | +4% health and education cess on total tax |
Standard deduction: ₹75,000 for salaried employees under new regime. Effective zero-tax for gross salary up to ₹7,75,000.
Old tax regime slabs (FY 2025–26)
| Income range | Tax rate | Notes |
|---|---|---|
| Up to ₹2,50,000 | Nil | |
| ₹2,50,001 – ₹5,00,000 | 5% | Rebate u/s 87A: no tax if total income ≤ ₹5L |
| ₹5,00,001 – ₹10,00,000 | 20% | |
| Above ₹10,00,000 | 30% | +4% health and education cess on total tax |
Old regime allows deductions under 80C (₹1.5L), 80D, HRA, home-loan interest (Section 24), NPS, and more. Higher rates but deductions can significantly reduce taxable income.
Take-home salary examples at common income levels
| Annual salary | New regime tax | Old regime (no deductions) | Old regime (with deductions) | Recommended regime | Planning note |
|---|---|---|---|---|---|
| ₹8,00,000 | ~₹20,000–₹25,000 | ~₹46,800 (without deductions) | ~₹25,000–₹35,000 (with HRA + EPF + 80C + 80D) | New regime for most employees at this band | Focus on emergency fund before maximizing 80C. New regime lowers TDS and improves monthly cashflow. |
| ₹12,00,000 | ~₹83,200 | ~₹1,17,000 (without deductions) | ~₹60,000–₹80,000 (with HRA + EPF + full 80C + 80D) | Compare — old regime can save ₹20,000–₹30,000 with consistent documentation | The break-even deduction threshold at ₹12L is ~₹3.75L. Calculate before locking regime. |
| ₹18,00,000 | ~₹2,08,000 | ~₹2,73,000 (without deductions) | ~₹1,48,000–₹1,80,000 (with home loan, HRA, full 80C, 80D) | Old regime typically wins — saves ₹30,000–₹60,000 if fully executed from April | Home-loan interest Section 24 (₹2L) is the most impactful deduction at this band. Add NPS for extra ₹50K. |
| ₹25,00,000 | ~₹5,20,000 | ~₹5,85,000 (without deductions) | ~₹4,35,000–₹4,75,000 (with all deductions, home loan, NPS) | Old regime wins with full deductions — saves ₹60,000–₹1,20,000 | Surcharge cap at 25% under new regime benefits incomes above ₹50L. Below ₹50L, old regime with deductions usually wins. |
Tax figures are illustrative. Include surcharge (if applicable) and compute exactly with actual deduction proofs before submitting employer declaration.
Key FY 2025–26 changes that affect your tax
Standard deduction raised to ₹75,000
Salaried employees under new regime automatically get ₹75K off taxable income (up from ₹50K).
Affects: All salaried employees under new regime
Rebate u/s 87A raised to ₹7L under new regime
If total taxable income ≤ ₹7L under new regime, tax liability = ₹0. Effective zero-tax income up to ₹7.75L with standard deduction.
Affects: Lower-income salaried employees and students with income under ₹7L
New regime becomes the default
If you do not explicitly opt for old regime with your employer by the declared deadline, TDS is calculated under new regime.
Affects: All salaried employees — critical to submit Form 10-IEA if you want old regime
LTCG exemption threshold raised to ₹1.25L
Long-term capital gains from equity up to ₹1.25L/year are now exempt (up from ₹1L). Gains beyond taxed at 12.5%.
Affects: Mutual fund and equity investors with ELSS/SIP redemptions
Frequently asked questions
- What are the new tax regime slabs for FY 2025-26 in India?
- New regime: Nil up to ₹3L → 5% for ₹3L–₹7L (rebate u/s 87A makes income up to ₹7L effectively tax-free) → 10% for ₹7L–₹10L → 15% for ₹10L–₹12L → 20% for ₹12L–₹15L → 30% above ₹15L. Plus 4% cess. Standard deduction ₹75,000 for salaried employees.
- What is the zero-tax income limit in India for FY 2025-26?
- New regime: gross salary up to ₹7,75,000 is effectively zero-tax (₹75K standard deduction + ₹7L rebate threshold). Old regime: ₹5L total income or less after deductions.