Advertisement
Updated March 31st 2025, 13:48 IST
New Tax Regime Tax Slabs From April 1: Zero Tax Up To Rs 12 Lakh Income - Salary Vs Tax Calculation
Income Tax Calculator: From April 1, 2025, individuals with a tax income of Rs 12 lakh or less in the new taxation regime will not have to pay any tax.
Advertisement
Income Tax Calculator: From April 1, 2025, individuals with a tax income of Rs 12 lakh or less in the new taxation regime will not have to pay any tax, a step taken to make taxpayers switch to this regime.
It is applicable after adjusting for allowances such as the standard deduction of Rs 75,000 and the 14% contribution to the National Pension System (NPS) made by the employer.
However, for individuals having an income higher than Rs 12 lakh, each rupee above the amount will be charged tax according to progressive income tax slabs.
New tax regime for FY 2025-26
| Income Range (Rs) | Tax Rate |
|---|---|
| 0 - 4,00,000 | Nil |
| 4,00,001 - 8,00,000 | 5% |
| 8,00,001 - 12,00,000 | 10% |
| 12,00,001 - 16,00,000 | 15% |
| 16,00,001 - 20,00,000 | 20% |
| 20,00,001 - 24,00,000 | 25% |
| Above 24,00,000 | 30% |
Income Tax Calculation Example: Gross Taxable Income Rs 28 Lakh
To see the calculation of the income tax for the new taxation system applicable from April 1, 2025, let us take the example of Rs 28 lakh being the gross taxable income from salary, savings account interest, and dividend from equity shares, excluding capital gains (as they are taxed separately).
Eligible Deductions and Net Taxable Income
Beginning with a gross taxable income of Rs 28 lakh, qualifying deductions are a standard deduction of Rs 75,000 and an employer's contribution to NPS of Rs 1.5 lakh. After deducting these figures, the net taxable income reduces to Rs 25,75,000.
Tax Calculation: First Slab (Up to Rs 4,00,000)
Under the new regime, the initial slab, covering income of up to Rs 4 lakh, is tax-exempt. Hence, there is no tax liability on this portion, and the remaining balance of taxable income is Rs 21,75,000.
Tax Calculation: Second Slab (Rs 4,00,001 to Rs 8,00,000)
The remaining Rs 4 lakh is charged at 5%. This leaves a tax of Rs 20,000. Following this, the remaining balance of taxable income stands at Rs 17,75,000.
Tax Calculation: Third Slab (Rs 8,00,001 to Rs 12,00,000)
10% is charged on the next Rs 4 lakh and adds Rs 40,000 to the total taxation. The balance taxable income is now Rs 13,75,000.
Tax Calculation: Fourth Slab (Rs 12,00,001 to Rs 16,00,000)
On the next Rs 4 lakh, charged at 15%, taxation is Rs 60,000. This leaves a balance taxable income of Rs 9,75,000.
Tax Calculation: Fifth Slab (Rs 16,00,001 to Rs 20,00,000)
The subsequent Rs 4 lakh comes with a 20% tax rate of Rs 80,000. The balance taxable amount is now Rs 5,75,000.
Tax Calculation: Sixth Slab (Rs 20,00,001 to Rs 24,00,000)
The Rs 5.75 lakh balance income is charged at 30%, which gives rise to a tax of Rs 1,43,750.
| Income Tax Slab | Tax Rate | Taxable Income in Slab | Tax Payable (Rs) | Balance Income (Rs) |
|---|---|---|---|---|
| Up to Rs 4,00,000 | 0% | Rs 4,00,000 | Rs 0 | Rs 21,75,000 |
| Rs 4,00,001 - Rs 8,00,000 | 5% | Rs 4,00,000 | Rs 20,000 | Rs 17,75,000 |
| Rs 8,00,001 - Rs 12,00,000 | 10% | Rs 4,00,000 | Rs 40,000 | Rs 13,75,000 |
| Rs 12,00,001 - Rs 16,00,000 | 15% | Rs 4,00,000 | Rs 60,000 | Rs 9,75,000 |
| Rs 16,00,001 - Rs 20,00,000 | 20% | Rs 4,00,000 | Rs 80,000 | Rs 5,75,000 |
| Rs 20,00,001 - Rs 24,00,000 | 25% | Rs 5,75,000 | Rs 1,43,750 | Rs 0 |
| Total Tax Before Cess | - | - | Rs 3,43,750 | - |
| Health and Education Cess (4%) | - | - | Rs 13,750 | - |
| Final Tax Payable | - | - | Rs 3,57,500 | - |
Total Tax and Cess Calculation
The total tax burden from all slabs adds up to Rs 3,43,750. After adding 4% by way of health and education cess, which comes to Rs 13,750, the total tax to be paid is Rs 3,57,500.
Published March 31st 2025, 12:28 IST