comparison of the tax calculation for an annual income of ₹25,00,000 under the New Tax Regime for FY 2025-26 and FY 2024-25

In the Union Budget 2025-26, significant revisions were made to India's income tax slabs under the new tax regime, effective from the Financial Year 2025-26 (Assessment Year 2026-27). The key changes are as follows:

Under the New Tax Regime for FY 2025-26:

For an annual income of ₹25,00,000 under the New Tax Regime for FY 2025-26, the tax slabs and calculation will be as follows:

Tax Slabs for FY 2025-26:

Income Range (₹)	Tax Rate (%)
Up to ₹4 lakh	NIL
₹4 lakh to ₹8 lakh	5%
₹8 lakh to ₹12 lakh	10%
₹12 lakh to ₹16 lakh	15%
₹16 lakh to ₹20 lakh	20%
₹20 lakh to ₹24 lakh	25%
Above ₹24 lakh	30%

Tax Calculation for ₹25,00,000 Income:

1. ₹4,00,000 at 0% = ₹0
2. ₹4,00,000 at 5% = ₹20,000
3. ₹4,00,000 at 10% = ₹40,000
4. ₹4,00,000 at 15% = ₹60,000
5. ₹4,00,000 at 20% = ₹80,000
6. ₹4,00,000 at 25% = ₹1,00,000
7. ₹1,00,000 at 30% = ₹30,000

Total Tax = ₹0 + ₹20,000 + ₹40,000 + ₹60,000 + ₹80,000 + ₹1,00,000 + ₹30,000 = ₹3,30,000

So, the total tax payable for an income of ₹25,00,000 under the New Tax Regime for FY 2025-26 is ₹3,30,000.

Under the New Tax Regime for FY 2024-25:

• For an annual income of ₹25,00,000 under the New Tax Regime for FY 2024-25, the tax slabs and calculation will be as follows:

  Tax Slabs for FY 2024-25:

  Income Range (₹)	Tax Rate (%)
  Up to ₹3 lakh	NIL
  ₹3 lakh to ₹7 lakh	5%
  ₹7 lakh to ₹10 lakh	10%
  ₹10 lakh to ₹12 lakh	15%
  ₹12 lakh to ₹15 lakh	20%
  Above ₹15 lakh	30%

  Tax Calculation for ₹25,00,000 Income:

  1. ₹3,00,000 at 0% = ₹0
  2. ₹4,00,000 at 5% = ₹20,000
  3. ₹3,00,000 at 10% = ₹30,000
  4. ₹2,00,000 at 15% = ₹30,000
  5. ₹3,00,000 at 20% = ₹60,000
  6. ₹9,00,000 at 30% = ₹2,70,000

  Total Tax = ₹0 + ₹20,000 + ₹30,000 + ₹30,000 + ₹60,000 + ₹2,70,000 = ₹4,10,000

  So, the total tax payable for an income of ₹25,00,000 under the New Tax Regime for FY 2024-25 is ₹4,10,000.

Key Differences:

• Taxable Income: The standard deduction increase in FY 2025-26 reduces the taxable income, leading to lower tax liability.
• Tax Rates: The revised tax slabs in FY 2025-26 result in a more favorable tax calculation for higher income brackets.

These revisions aim to provide significant relief to middle-class taxpayers, encouraging increased savings and consumption.

Note: The above calculations are based on the tax slabs announced in the Union Budget 2025 and should not be considered as tax advice. For the most accurate and personalized tax planning, it's advisable to consult with a tax professional.