Income tax is an important source of revenue in the Indian economy. The structure of income tax in India is progressive, that is, more people with a higher income will have to pay a higher percentage of their income as tax. The slabs are decided by the government, and the rates are changed annually through the Union Budget. For the financial year 2025-2026, individuals need to be aware of the income tax slabs, deductions, exemptions, and rebates available. This article delves into the income tax slabs for 2025-2026, offering transparency on how these work.
Overview of the Indian Income Tax System, income tax is levied on individuals as well as companies. For an individual taxpayer, the tax structure is divided based on annual income, and various slabs apply to different ranges of income. The income tax slabs for individuals vary based on age; there are different categories for general taxpayers, senior citizens, and super senior citizens.
The income tax structure includes:
Taxable Income: This is the income after all deductions, exemptions, and rebates.
Deductions: Individuals can reduce their taxable income by claiming deductions under sections like 80C (for investments), 80D (for insurance premiums), and others.
Rebates are available for lower income earners, such as the rebate under Section 87A.
Income Tax Slabs for the Financial Year 2025-2026
The income tax slabs for individual taxpayers under the financial year 2025-2026 are categorized as per the age group and the income level of the taxpayers. It must be noted that for residents and non-residents, and even those who choose to go with the new tax regime, these income tax slabs can be different.
1. Income Tax Slabs for Individuals (Below 60 years)
Under the present tax structure, income tax brackets for individuals less than 60 years stand as follows: –
Income Range (₹)\tTax Rate
Up to ₹2.5 lakh\tNil
₹2.5 lakh to ₹5 lakh\t5%
₹5 lakh to ₹10 lakh\t20%
Above ₹10 lakh\t30%
Key Points:
All those earning up to ₹2.5 lakh are exempt from paying income tax.
The one earning between ₹2.5 lakh and ₹5 lakh has to pay an income tax of 5%.
A 20 percent tax rate is applicable in the case of earnings between ₹5 lakh and ₹10 lakh.
Income above ₹10 lakh is taxed at 30%.
2. Income Tax Slabs for Senior Citizens (Age 60 to 80 years)
Senior citizens have a higher basic exemption limit. The income tax slabs for senior citizens aged 60 to 80 years for FY 2025-2026 are as follows:
Income Range (₹)\tTax Rate
Up to ₹3 lakh\tNil
₹3 lakh to ₹5 lakh\t5%
₹5 lakh to ₹10 lakh\t20%
Above ₹10 lakh\t30%
Important Points:
For senior citizens, income up to ₹3 lakh is exempted from income tax and is more relieving than the general population.
Income between ₹3 lakh and ₹5 lakh is taxed at 5%.
The same rates apply to income above ₹5 lakh and ₹10 lakh, at a tax rate of 20% and 30%, respectively.
3. Income Tax Slabs for Super Senior Citizens (Age 80 years and above):
Super senior citizens, or those aged 80 years and above, are eligible for a further increase in their basic exemption limit. The tax slabs for super senior citizens for FY 2025-2026 are as follows:
Income Range (₹) Tax Rate
Up to ₹5 lakh Nil
₹5 lakh to ₹10 lakh 20%
Above ₹10 lakh 30%
Key Points:
Super senior citizens are exempt from paying income tax on income up to ₹5 lakh.
The balance of the tax structure is essentially the same as for senior citizens, with income between ₹5 lakh and ₹10 lakh falling in the 20% rate, and 30% over ₹10 lakh.
4. Income Tax Slabs Under the New Tax Regime (No Deductions)
For taxpayers who have chosen the new tax regime that was announced in the 2020 Union Budget, the following are the tax slabs. The new regime provides lower tax rates but does not provide any deductions, exemptions, or rebates.
Income Range (₹)\tTax Rate
Up to ₹2.5 lakh\tNil
₹2.5 lakh to ₹5 lakh\t5%
₹5 lakh to ₹7.5 lakh\t10%
₹7.5 lakh to ₹10 lakh\t15%
₹10 lakh to ₹12.5 lakh\t20%
₹12.5 lakh to ₹15 lakh\t25%
Above ₹15 lakh\t30%
Key Points:
The new tax regime does not permit taxpayers to claim deductions that are available under the old regime.
The new tax structure helps individuals with lesser taxable income because they enjoy a lower tax rate compared to the old regime.
5. Rebate Under Section 87A
Under Section 87A, rebates of up to ₹ 12,500 are available, if the gross income of any previous year from all sources has not exceeded Rs. 5 lakh. Thereby, saving an individual an income tax in that slab alone.
Some Major Points to note
Surcharge and Cess:
A Surcharge is an additional tax or charge that varies from 10% to 37% from the amount liable to tax with respect to annual income over a certain limit Rs. 50 lakh.
Health and Education Cess at 4% is added to the total tax liability (including surcharge).
Deductions:
The following deductions are available for reducing taxable income under sections such as 80C, wherein an investment up to ₹1.5 lakh in specified instruments is eligible, 80D for insurance premium, 80E for interest on education loan, and others.
Income tax is an important source of revenue in the Indian economy. The structure of income tax in India is progressive, that is, more people with a higher income will have to pay a higher percentage of their income as tax. The slabs are decided by the government, and the rates are changed annually through the Union Budget. For the financial year 2025-2026, individuals need to be aware of the income tax slabs, deductions, exemptions, and rebates available. This article delves into the income tax slabs for 2025-2026, offering transparency on how these work.
Overview of the Indian Income Tax System, income tax is levied on individuals as well as companies. For an individual taxpayer, the tax structure is divided based on annual income, and various slabs apply to different ranges of income. The income tax slabs for individuals vary based on age; there are different categories for general taxpayers, senior citizens, and super senior citizens.
The income tax structure includes:
Taxable Income: This is the income after all deductions, exemptions, and rebates.
Deductions: Individuals can reduce their taxable income by claiming deductions under sections like 80C (for investments), 80D (for insurance premiums), and others.
Rebates are available for lower income earners, such as the rebate under Section 87A.
Income Tax Slabs for the Financial Year 2025-2026
The income tax slabs for individual taxpayers under the financial year 2025-2026 are categorized as per the age group and the income level of the taxpayers. It must be noted that for residents and non-residents, and even those who choose to go with the new tax regime, these income tax slabs can be different.
1. Income Tax Slabs for Individuals (Below 60 years)
Under the present tax structure, income tax brackets for individuals less than 60 years stand as follows: –
Income Range (₹)\tTax Rate
Up to ₹2.5 lakh\tNil
₹2.5 lakh to ₹5 lakh\t5%
₹5 lakh to ₹10 lakh\t20%
Above ₹10 lakh\t30%
Key Points:
All those earning up to ₹2.5 lakh are exempt from paying income tax.
The one earning between ₹2.5 lakh and ₹5 lakh has to pay an income tax of 5%.
A 20 percent tax rate is applicable in the case of earnings between ₹5 lakh and ₹10 lakh.
Income above ₹10 lakh is taxed at 30%.
2. Income Tax Slabs for Senior Citizens (Age 60 to 80 years)
Senior citizens have a higher basic exemption limit. The income tax slabs for senior citizens aged 60 to 80 years for FY 2025-2026 are as follows:
Income Range (₹)\tTax Rate
Up to ₹3 lakh\tNil
₹3 lakh to ₹5 lakh\t5%
₹5 lakh to ₹10 lakh\t20%
Above ₹10 lakh\t30%
Important Points:
For senior citizens, income up to ₹3 lakh is exempted from income tax and is more relieving than the general population.
Income between ₹3 lakh and ₹5 lakh is taxed at 5%.
The same rates apply to income above ₹5 lakh and ₹10 lakh, at a tax rate of 20% and 30%, respectively.
3. Income Tax Slabs for Super Senior Citizens (Age 80 years and above):
Super senior citizens, or those aged 80 years and above, are eligible for a further increase in their basic exemption limit. The tax slabs for super senior citizens for FY 2025-2026 are as follows:
Income Range (₹) Tax Rate
Up to ₹5 lakh-Nil
₹5 lakh to ₹10 lakh-20%
Above ₹10 lakh-30%
Key Points:
Super senior citizens are exempt from paying income tax on income up to ₹5 lakh.
The balance of the tax structure is essentially the same as for senior citizens, with income between ₹5 lakh and ₹10 lakh falling in the 20% rate, and 30% over ₹10 lakh.
4. Income Tax Slabs Under the New Tax Regime (No Deductions)
For taxpayers who have chosen the new tax regime that was announced in the 2020 Union Budget, the following are the tax slabs. The new regime provides lower tax rates but does not provide any deductions, exemptions, or rebates.
Income Range (₹)\tTax Rate
Up to ₹2.5 lakh\tNil
₹2.5 lakh to ₹5 lakh\t5%
₹5 lakh to ₹7.5 lakh\t10%
₹7.5 lakh to ₹10 lakh\t15%
₹10 lakh to ₹12.5 lakh\t20%
₹12.5 lakh to ₹15 lakh\t25%
Above ₹15 lakh\t30%
Key Points:
The new tax regime does not permit taxpayers to claim deductions that are available under the old regime.
The new tax structure helps individuals with lesser taxable income because they enjoy a lower tax rate compared to the old regime.
5. Rebate Under Section 87A
Under Section 87A, rebates of up to ₹ 12,500 are available, if the gross income of any previous year from all sources has not exceeded Rs. 5 lakh. Thereby, saving an individual an income tax in that slab alone.
Some Major Points to note
Surcharge and Cess:
A Surcharge is an additional tax or charge that varies from 10% to 37% from the amount liable to tax with respect to annual income over a certain limit Rs. 50 lakh.
Health and Education Cess at 4% is added to the total tax liability (including surcharge).
Deductions:
The following deductions are available for reducing taxable income under sections such as 80C, wherein an investment up to ₹1.5 lakh in specified instruments is eligible, 80D for insurance premium, 80E for interest on education loan, and others.
Tax Planning:
Tax planning is important for the effective reduction of tax liability for individuals. Tax-saving instruments such as ELSS, PPF, and National Savings Certificates (NSC) help reduce taxable income.
Conclusion
The income tax slabs for FY 2025-2026 are designed progressively to ensure that those who earn more pay more to the nation’s exchequer. Deductions and rebates add to the list of relief from the burden on taxpayers, particularly those with low incomes. A proper understanding of these slabs and planning taxes can save one a lot and ensure compliance with the Indian tax system.
Always consult a financial advisor or tax expert to make the most informed decisions and utilize available exemptions and deductions to minimize your tax liability.
