Income Tax Slabs for 2025-26: Latest Changes & Key Takeaways

The Union Budget 2025 has introduced major changes in India’s income tax structure, bringing significant relief to taxpayers. With higher exemptions and simplified tax slabs, the government aims to boost disposable income and stimulate economic growth.

In this blog, we break down the latest tax slabs, key updates, and how these changes impact your financial planning.

New Income Tax Slabs for FY 2025-26

Under the new tax regime, income up to ₹12 lakh is completely tax-free! Here’s the revised slab structure:

Key Highlights

✔ Higher Exemption Limit: Tax-free income limit increased from ₹7 lakh to ₹12 lakh.
✔ Lower Tax Rates: Significant reductions in tax rates for middle-income earners.
✔ Standard Deduction Increased: Salaried individuals can now claim ₹75,000 as a standard deduction.
✔ No Tax on Annual Income up to ₹12.75 Lakh (Including standard deduction).

Old vs New Tax Regime – Which One Should You Choose?

💡 Verdict: The new tax regime is beneficial for those who don’t claim many deductions and want simpler, lower tax rates. However, if you invest heavily in PPF, LIC, home loans, and 80C deductions, the old regime might still be better.

How These Tax Changes Impact You

📈 Higher Savings – Middle-class taxpayers will have more disposable income, boosting consumer spending.
🏠 Better Financial Planning – Increased tax-free limit helps in better wealth management.
💰 Encourages Investments – With extra savings, people may invest in mutual funds, SIPs, or real estate.

Final Thoughts: What Should You Do Next?

✔ Review Your Finances: Check whether you benefit more from the new tax regime or the old one.
✔ Plan Investments Wisely: If you rely on deductions, calculate the benefits before switching regimes.
✔ Stay Updated: The government may introduce more financial incentives as economic policies evolve.

💬 What do you think of the new tax slabs? Share your thoughts in the comments below! 📢