Old Income Tax Regime Vs New Regime: The pre-Budget consultations are going on for the Union Budget 2025-26. Various industries are raising demands for measures to boost businesses. Taxpayers are also expecting measures on their income tax. Here are the current income tax slabs and rates:

Currently, income tax is exempt on annual earnings up to Rs 12 lakh for FY 2025-26 under the new tax regime. So, those earning a ‘normal income’ of Rs 12 lakh do not need to pay any income tax so far. Normal income does not income special-rate incomes like STCG and LTCG.

New Tax Regime Remains Default

For the ongoing FY 2025-26 ITR filings, the new tax regime will be the default option. Salaried individuals can still opt for the old regime at the time of filing. However, a belated ITR — filed after the due date next year — can only be submitted under the new regime.

Income (Rs) Tax Rate (%)

0-4,00,000 0

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 24,00,001 30

Key benefits:

• Standard deduction: Rs 75,000 for salaried and pensioners.
• Section 87A rebate: For residents with net taxable income up to Rs 12 lakh.
• NPS deduction: Salaried employees can claim up to 14% of basic salary under Section 80CCD(2).

Old Tax Regime Slabs for FY 2024-25

The old tax regime is the income tax system that offers a wide range of exemptions and deductions, allowing taxpayers to reduce their taxable income by claiming benefits such as Section 80C (up to Rs 1.5 lakh) for investments in PPF, ELSS, LIC, etc; house rent allowance (HRA); leave travel allowance (LTA); interest on home loan (Section 24); health insurance premium (Section 80D); education loan interest (Section 80E); and standard deduction (Rs 50,000 for salaried individuals).

Below 60 years:

Income (₹) Tax Rate (%)

0-2,50,000 0

2,50,001-5,00,000 5

5,00,001-10,00,000 20

Above 10,00,000 30

60 to below 80 years:

Income (Rs) Tax Rate (%)

0-3,00,000 0

3,00,001-5,00,000 5

5,00,001-10,00,000 20

Above 10,00,000 30

80 years and above:

0-5,00,000 0

5,00,001-10,00,000 20

Above 10,00,000 30

Which Tax Regime Should You Choose?

“You may benefit from the new regime if you earn up to Rs 12 lakh in a year. Most people fall under this category," said Aman Sharma, a Delhi-based chartered accountant.

He also added that you may benefit from the old regime if you claim large deductions under 80C, 80D, HRA, or home loan interest; you have invested in tax-saving instruments like PPF, ELSS, NSC, etc; your employer provides components like HRA, LTA, or reimbursements that reduce taxable salary; or you’re a senior citizen availing multiple deductions.