Income Tax Slabs AY 2025–26 Explained with the New Regime Calculator

If you’re planning your taxes for the year ahead, understanding the income tax slab for AY 2025–26 is a good place to start. The Budget 2024 introduced some changes, particularly for those under the new tax regime, which is now the default option for individual taxpayers.

That said, if you're still sticking with the old regime, you're not alone. Many salaried professionals and retirees continue with the older system for its wider exemptions and deductions. Either way, the income tax slabs for AY 2025–26 now differ depending on which regime you follow and your age group.

New Tax Regime Slabs for AY 2025–26: What’s Changed Since Last Year

The new tax regime now comes with lower rates and simplified slabs. Here’s a breakdown of the slab changes for FY 2024–25 (AY 2025–26), compared to the previous year:

Even if you’re in the same income tax slab for AY 2025–26, you may end up paying slightly less than before, especially if your annual income falls under ₹15 lakh.

However, do note that this structure doesn’t differentiate by age. That means the slab is the same whether you’re 35 or 75. The old regime may offer more flexibility if you're a senior citizen.

Old Tax Regime Slabs for AY 2025–26: Age-Based Benefits Still Intact

The old tax regime, though not updated in this year’s Budget, continues to offer broader deduction benefits. It's also friendlier for senior and super senior citizens. Let’s look at the rates across three age brackets:

Individuals Below 60 Years

Senior Citizens (60–80 Years)

Super Senior Citizens (80+ Years)

So if you're over 60 and still working or earning taxable income, this regime may still be worth a closer look.

Standard Deduction for AY 2025–26: A Welcome Increase

For salaried individuals, one of the key announcements in the Union Budget 2024 was the increase in standard deduction under the new tax regime. Earlier, the amount stood at ₹50,000. Now, it's been raised to ₹75,000, applicable across all salary levels.

What does this mean in real terms? If you fall under the 30% income tax slab for AY 2025–26, this additional ₹25,000 deduction could reduce your tax liability by ₹7,500, without you needing to invest or declare anything. It’s an automatic benefit.

Just remember, this deduction isn’t available to self-employed individuals or non-individual taxpayers like HUFs. So, if you’re salaried, it’s a simple win. If you’re not, you’ll still need to plan your tax savings more actively.

Section 87A Rebate: Slab-Based Exemptions on Lower Incomes

The 87A rebate continues for both tax regimes but with different limits.

1. Under the old regime, if your total income is up to ₹5 lakh, you get a rebate of up to ₹12,500. So, you end up paying no tax.
2. Under the new regime, this rebate limit is higher. If your income is up to ₹7 lakh, your tax liability becomes zero after the rebate is applied.

This is one of the most significant advantages of the new structure for those with moderate annual incomes and minimal deductions.

Using the Income Tax Calculator: Estimate Your Outgo Smarter

If you're unsure whether the new or old regime suits you better, using an income tax calculator new regime version can offer clarity. These tools help you compare the tax you’d pay under both systems, side by side.

Premium insurance providers like Axis Max Life offer user-friendly online tax calculators that also take into account deductions, rebates, and salary structures. You simply enter your income, deductions (if any), and choose the regime you’re evaluating. In seconds, you’ll see your tax liability clearly laid out.

Which Regime Should You Choose for AY 2025–26?

It’s not a one-size-fits-all decision. For some, the new tax regime is easier, with fewer complications and lower overall rates. For others, especially those who already claim multiple deductions under Section 80C, 80D, and HRA, the old tax regime might still be more beneficial.

Here's a simplified way to think about it:

1. If your deductions are less than ₹2 lakh, chances are the new regime will be more beneficial.
2. If your deductions cross ₹2.5 lakh, the old regime could reduce your liability more.
3. For senior and super senior citizens, the old regime usually gives better age-based exemptions.

Final Thoughts

The income tax slab for AY 2025–26 brings a mix of clarity and choice. While the new regime offers lower rates and a more predictable structure, the old regime still holds value for individuals who use multiple deductions or fall into specific age categories.

Whether you opt for simplicity or savings depends on your financial habits and income structure. What matters most is that you understand both systems well enough to make an informed decision.

If you're planning to pair tax planning with broader financial security goals like retirement, child education, or long-term wealth creation, it may be worth exploring products that combine investment with insurance. That’s where tools like the income tax calculator and the new regime, available on platforms by providers such as Axis Max Life Insurance, can help you look at your bigger financial picture.

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Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to change. Please consult an expert before making any related decisions.

Tax benefit is subject to change as per the prevailing tax laws.