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moreTax rates
The Bill proposes to revise the tax rate structure for personal income tax under the new tax regime under section 115BAC of the IT Act and the old tax regime shall continue to remain the same. Individuals/ HUFs/AOPs and BOIs continue to have the option to opt for the old tax regime. The income-tax slabs and rates for the FYs 2025-26 and 2024-25 under the new tax regime and the old tax regime are as under:
New Tax Regime - Proposed
*A resident individual would be entitled to rebate under section 87A of 100% of tax payable or Rs. 60,000, whichever is lower, [excluding health and education cess] resulting in NIL tax liability upto total income of Rs. 12,00,000. Further, such rebate on income-tax is not available on tax on incomes chargeable at special rates.
^ Marginal relief is available to ensure that the additional income tax payable, including surcharge of 10%, 15%, or 25% on the excess of income over Rs. 50,00,000, Rs. 1,00,00,000 or Rs. 2,00,00,000 as the case may be, is limited to the amount by which the income is more than Rs. 50,00,000, Rs. 1,00,00,000 or Rs. 2,00,00,000 as the case may be. No marginal relief shall be available in respect of the health and education cess.
^^ Maximum rate of surcharge on tax payable on income chargeable to tax under section 111A, 112A, 112 115AD(1)(b) and dividend income shall be 15%.
New Tax Regime - Present
* A resident individual would be entitled to rebate under section 87A of 100% of tax payable or Rs. 25,000, whichever is lower, [excluding health and education cess] resulting in NIL tax liability upto total income of Rs. 7,00,000.
^ Marginal relief is available to ensure that the additional income tax payable, including surcharge of 10%, 15%, or 25% on the excess of income over Rs. 50,00,000, Rs. 1,00,00,000 or Rs. 2,00,00,000 as the case may be, is limited to the amount by which the income is more than Rs. 50,00,000, Rs. 1,00,00,000 or Rs. 2,00,00,000 as the case may be. No marginal relief shall be available in respect of the health and education cess.
^^ Maximum rate of surcharge on tax payable on income chargeable to tax under section 111A, 112A, 112 115AD(1)(b) and dividend income shall be 15%.
Old Tax Regime
The tax rates in the old tax regime in case of individuals, HUFs, AOPs and BOIs continue to remain the same. As such, the effective and present tax rates under the old tax regime for the FYs 2025-26 and 2024-25 are as follows:
^^ Maximum rate of surcharge on tax payable on income chargeable to tax under section 111A, 112A, 112 115AD(1)(b) and dividend income shall be 15%.
* The tax rate has been continued at 5.20% [tax rate 5 % plus health and education cess 4% thereon] on the income exceeding Rs. 2,50,000 but not exceeding Rs. 5,00,000. However, a resident individual would continue to be entitled to a rebate under section 87A of 100% of tax payable [excluding health and education cess] or Rs. 12,500, whichever is lower, resulting in NIL tax liability upto total income of Rs. 5,00,000.
^ Marginal relief is available to ensure that the additional income tax payable, including surcharge of 10%, 15%, 25% or 37% on the excess of income over Rs. 50,00,000, Rs. 1,00,00,000, Rs. 2,00,00,000 or Rs. 5,00,00,000 as the case may be, is limited to the amount by which the income is more than Rs. 50,00,000, Rs. 1,00,00,000, Rs. 2,00,00,000 or Rs. 5,00,00,000 respectively. However, no marginal relief shall be available in respect of health and education cess.
^^ Maximum rate of surcharge on tax payable on income chargeable to tax under sections 111A, 112A, 112 115AD(1)(b) and dividend income, shall be 15%.
Comparison of Income slabs and proposed tax incidence of New tax regime current and proposed
** The tax incidence for AOPs and BOIs will be same as that of individuals and HUFs
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