ITR 2024-25: Are the latest Budget 2025 tax slabs applicable for tax filing in AY 2025-06? Details here

Income tax returns: In the Budget 2025, middle-class taxpayers have received some relief. Under the new tax regime announced by Finance Minister Nirmala Sitharaman, individuals earning up to Rs 12 lakh annually will no longer be required to pay any income tax. The exemption limit has been raised, and tax slabs have been adjusted to provide this relief.

For salaried employees, the tax-free limit will be Rs 12.75 lakh per year, taking into consideration a standard deduction of Rs 75,000. Various exemptions and changes have been implemented in the new income tax regime to benefit the middle class.

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However, taxpayers should note the revised tax slabs and rates announced in Budget 2025-26 will only be applicable for the Financial Year (FY) 2025-26, corresponding to the Assessment Year (AY) 2026-27. Taxpayers should be aware that these changes will not apply to the FY2024-25.

The new tax slabs are for income earned between April 1, 2025, and March 31, 2026. Income Tax returns for this period will be filed in AY 2026-27 (2026). For tax filing in 2025, the rates announced in Budget 2024-25 will still be in effect.

ITR filing in 2025 for FY2024-25

The tax rates set forth in Budget 2024-25 will continue to apply for the 2025 tax filing season. 

The key points of the new tax rules for the fiscal year 2024-25 are outlined below:

> Default tax regime: The default tax regime is in effect. Individuals who wish to opt for the old regime must submit Form 10-IEA.
> Basic exemption limit: The basic exemption limit is set at Rs. 3 lakhs for all individuals, regardless of their age.
> Rebate u/s 87A: Individual taxpayers qualify for a rebate under section 87A if their income does not exceed Rs. 7 lakhs, resulting in zero tax liability for incomes below Rs. 7 lakhs.
> Surcharge: The maximum surcharge rate in the new regime is 25%, a reduction from the 37% rate in the old regime.
> Tax rebate of up to Rs. 25,000 available for total income not exceeding Rs. 7,00,000 (excludes NRIs).
> If you want to file your ITR under the old regime then you have to file Form 10-IEA. 

New Tax Regime for FY2024-25

Tax Slab for FY 2024-25

Salary slab         Tax Rate

Up to Rs 3 lakh    NIL

Rs 3-7 lakh          5%

Rs 7-10 lakh       10%

Rs 10-12 lakh     15%

Rs 12-15 lakh     20%

Rs 15 lakh & up  30%

 

Old Tax Regime for FY2024-25

Tax Slabs for FY2024025

                             Old Tax Regime New Tax Regime

Up to Rs 2.50L     NIL                     NIL

Rs 2.50-3L           5%                      NIL

Rs 3-5L               5%                       5%

Rs 5-Rs 6L        20%                      5%

Rs 6-7L             20%                      5%

Rs 7-9L             20%                     10%

Rs 9-Rs 10L       20%                    10%

Rs 10-12L         30%                     15%

Rs 12-12.50L      30%                    20%

Rs 12.50-15L      30%                   20%

Rs 15L and above  30%               30%

Changes made in the new tax regime in Budget 2024

In addition to adjustments to income tax slabs, several modifications were implemented in the new tax system. The changes introduced include:

> Enhancement of the standard deduction limit to Rs 75,000 from Rs 50,000, resulting in a Rs 25,000 increase.

This adjustment applies to individual taxpayers with income from salary or pension, with no alterations to the standard deduction limit in Budget 2025.

> Increase in the standard deduction limit for family pensioners to Rs 25,000 from Rs 15,000, a Rs 10,000 rise. This provision applies to individual taxpayers receiving family pensions.

> Expansion of the deduction on the employer's contribution to the National Pension System account to 14% from 10%. This enhancement in deduction will enable employees to achieve greater tax savings under the new tax system.