How Much Will You Save Under The New Tax Slabs? A Salary-Wise Breakdown For New Tax Regime

As stated in Budget 2025, several adjustments relating to income tax slabs under the new regime take effect on April 1, 2025 (FY26). Income-tax rates for those who want to use the old income-tax regime remain unchanged, but under the revised new income-tax regime, you can seek a rebate under Section 87A and minimize your tax payment to zero if your total income after deductions is up to Rs 12 lakh. The new tax regime now offers the standard deduction benefit on salary income, which was available under the old tax regime. As a standard deduction from the salary income, salaried individuals can make deductions up to Rs. 75,000.

Changes In The Tax Rates With Reduced Slabs For FY 2025-26

In the New Personal Tax Regime (NPTR) proposed for FY 2025-26 onwards, the highest tax rate of 30% will apply to income above Rs 24 lakhs. The income upto Rs. 12 lakhs is tax-free under the new regime. This limit increases to Rs. 12,75,000 for salaried taxpayers due to the standard deduction. The New Personal Tax Regime (NPTR) offers lower tax rates than the old regime. For example, under the old tax regime, income between Rs 5 lakhs and Rs 7 lakhs was taxed at 20%; however, in the new tax regime, it is 5%. According to CA Muskkan Kukreja, Assistant Director & Program Co-ordinator- Accounting and Finance, Dr. Shantilal K Somaiya School of Commerce and Business Studies, Somaiya Vidyavihar University, the NPTR provides a change in the tax rates with reduced slabs for FY 2025-26 as under:

Earlier regime		FY 2025-26
Total Income (in INR)	Tax rate	Total Income (in INR)	Tax rate
0 - 3,00,000	Nil	0 - 4,00,000	Nil
3,00,001 to 700,000	5%	4,00,001 to 800,000	5%
7,00,001 to 10,00,000	10%	8,00,001 to 12,00,000	10%
10,00,001 to 12,00,000	15%	1,200,001 to 16,00,000	15%
12,00,001 to 15,00,000	20%	1,600,001 to 20,00,000	20%
Above 15,00,000	25%	20,00,001 to 24,00,000	25%
		Above 24,00,000	30%

The standard deduction benefit on salary income was previously available under the old tax regime, but it is now also available under the New Personal Tax Regime. Salaried persons can deduct upto Rs.75,000 as a standard deduction from their salary income, stated CA Muskkan Kukreja.

How Much Tax Will You Save Under the New Slabs? A Salary-Wise Breakdown

The revisions to the tax slabs will lead to substantial savings for taxpayers. Here's a breakdown of the tax savings across different income levels as per Shefali Mundra, Tax Expert, ClearTax.

Taxable Income	New Regime (Pre Budget 2025)	New Regime (Post Budget 2025)	Savings	Savings %
10,00,000	44,200	0	44,200	100%
12,00,000	71,500	0	71,500	100%
15,00,000	1,30,000	97,500	32,500	25%
18,00,000	2,15,800	1,50,800	65,000	30%
20,00,000	2,78,200	1,92,400	85,800	31%
25,00,000	4,34,200	3,19,800	1,14,400	26%
30,00,000	5,90,200	4,75,800	1,14,400	19%
40,00,000	9,02,200	7,87,800	1,14,400	13%

Important Points To Note If You Select The New Tax Regime:

The following are key considerations, said Shefali Mundra, if you decide to go with the new tax regime:

• Please note that the tax rates in the New tax regime are the same for all categories of Individuals, i.e. Individuals, Senior citizens, and super senior citizens.
• Individuals with net taxable income less than or equal to Rs.7 lakh will be eligible for tax rebate u/s 87A, i.e. tax liability will be NIL under the new regime.

Tax Saving Options Under The New Tax Regime (FY 2024-25)

Unlike previous financial years, you can now claim certain deductions if you opt for the new tax regime. The Union Budget 2023-24 announced a list of tax deductions that you can claim under the new tax regime. The following are the deductions available for the financial year 2024-25, as per Shefali Mundra.

• Standard Deduction of Rs.75,000
• Deduction for Agniveers under Section 80CCH
• Deduction of employer's contribution to National Pension Scheme under Section 80CCD(2)
• Family pension as per section 57(iia)
• Conveyance Allowance
• Transport Allowance with respect to physically challenged.
• Exemption on voluntary retirement 10(10C), gratuity u/s 10(10) and Leave encashment u/s 10(10AA)
• Interest on Home Loan on the let-out property (Section 24)
• Transport allowances in case of a specially-abled person.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.