Income Tax Slabs FY 2025-26: Complete Guide with Examples

After Budget 2025, the new regime makes income up to ₹12 lakh tax-free. Here are the updated slabs, rebate rules, and worked examples for every salary level.

1.New regime slabs FY 2025-26

Under the new regime (default): **₹0-3 lakh**: Nil. **₹3-7 lakh**: 5%. **₹7-10 lakh**: 10%. **₹10-12 lakh**: 15%. **₹12-15 lakh**: 20%. **Above ₹15 lakh**: 30%. Standard deduction: ₹75,000. Section 87A rebate: up to ₹60,000 (making income up to ₹12 lakh effectively tax-free, ₹12.75 lakh including standard deduction).

2.Worked examples

**₹10 lakh salary**: Taxable = ₹10L − ₹0.75L = ₹9.25L. Tax = ₹20,000 (3-7L) + ₹22,500 (7-9.25L) = ₹42,500. Rebate 87A wipes this to **₹0**. **₹15 lakh salary**: Taxable = ₹14.25L. Tax = ₹20,000 + ₹30,000 + ₹30,000 + ₹45,000 = ₹1,25,000. No rebate. + 4% cess = **₹1,30,000**. **₹25 lakh salary**: Taxable = ₹24.25L. Tax = ₹20,000 + ₹30,000 + ₹30,000 + ₹60,000 + ₹2,77,500 = ₹4,17,500 + cess = **₹4,34,200**.

3.When to stick with the old regime

The old regime has higher slab rates but allows deductions: 80C (₹1.5L), 80D (₹25-50K), HRA, home loan interest (₹2L), NPS 80CCD(1B) (₹50K). If your total deductions exceed ₹3.75 lakh and income is above ₹15 lakh, old regime may save more. At ₹20 lakh income: new regime tax ≈ ₹2.73 lakh. Old regime with ₹4.5 lakh deductions ≈ ₹2.57 lakh. Old regime wins by ₹16,000. Use our calculator to compare both.

4.Key takeaway

For most salaried Indians earning under ₹15 lakh, the new regime is clearly better — especially with zero tax up to ₹12 lakh. Above ₹20 lakh, it depends on your deduction profile. Use our income tax calculator to compute both regimes side by side and make the right choice.