Updated Income Tax Slabs for FY 2024-25 Under New Regime
- PRITI SIRDESHMUKH
- 1 day ago
- 9 min read
The financial year 2024-25 brings a refined version of India’s new income tax regime, aligning simplicity with fairness. The revised tax slabs have widened the income thresholds, providing better relief to middle-income earners. With the rebate under Section 87A making income up to ₹7 lakh tax-free and a standard deduction of ₹50,000 for salaried individuals, the new regime aims to reduce compliance burdens. Health and education cess of 4% and a capped surcharge of 25% ensure equitable taxation across income levels. These changes make it essential for taxpayers to re-evaluate which regime suits their financial goals.
Table of Contents
Understanding the New Income Tax Regime for FY 2024-25
The new income tax regime, introduced under Section 115BAC of the Income Tax Act, aims to simplify tax compliance by replacing multiple deductions and exemptions with a straightforward slab structure. For FY 2024-25 (AY 2025-26), this regime continues as the default system for all taxpayers, meaning anyone filing returns will automatically be assessed under the new regime unless they specifically opt for the old one. The intent behind this approach is to make taxation simpler and reduce the dependency on complex exemptions such as HRA, LTA, or 80C investments. By offering uniform slabs and a flat rebate mechanism, the government encourages transparency and convenience in tax filing.
Updated Income Tax Slabs Under the New Regime
The income tax slabs for FY 2024-25 under the new regime have been structured to balance fairness and simplicity. The revised slabs are as follows:
The new regime also includes a 4% Health and Education Cess on the total income tax. A standard deduction of ₹50,000 is available to salaried individuals and pensioners, while taxpayers with taxable income up to ₹7 lakh qualify for a full rebate under Section 87A, resulting in zero tax liability.
Tax Rebate and Standard Deduction Benefits in FY 2024-25
The tax rebate under Section 87A is one of the most significant benefits in the new regime. It allows individuals with taxable income up to ₹7 lakh to enjoy a complete rebate, effectively making their tax outgo zero. This provision ensures that low and middle-income earners continue to receive relief even without availing traditional deductions.
In addition, salaried individuals and pensioners can claim a standard deduction of ₹50,000, reducing taxable income and improving net take-home pay. Though most other deductions such as 80C, 80D, and HRA are not allowed under this regime, these limited but impactful benefits keep compliance easy and paperwork minimal.
Is Section 87A Rebate Allowed in the New Regime?
Yes, the rebate under Section 87A continues to be allowed in the new regime. Any resident individual with a total taxable income not exceeding ₹7 lakh can claim this rebate, ensuring that their net tax payable becomes nil. For instance, if someone earns ₹7 lakh annually, the total tax computed at 5% would be ₹25,000, but the rebate under Section 87A will offset it completely. However, once income crosses ₹7 lakh, the benefit of the rebate is withdrawn, and normal slab rates apply. This threshold serves as a key factor in deciding whether the new regime is beneficial for a taxpayer.
Key Budget 2025 Announcements Impacting Taxpayers
Budget 2025 introduced refinements in the new regime, maintaining the focus on simplicity and ease of filing. The income slabs were retained to ensure continuity, while the highest surcharge rate for income above ₹5 crore was kept at 25%, reduced earlier from 37%. The government also confirmed that the standard deduction for salaried taxpayers remains at ₹50,000.
Additional updates from the Central Board of Direct Taxes (CBDT) included improvements in e-filing portals, streamlined TDS reporting, and simplified return validation systems. Moreover, the revised ITR filing deadline of September 15, 2025, gives taxpayers extra time to reconcile AIS/TIS data before submission, promoting accuracy and timely compliance.
How to Choose Between Old and New Tax Regimes
Selecting the right regime depends on an individual’s income structure and available deductions. The new regime benefits taxpayers who prefer a clean, exemption-free system with lower rates and simpler compliance. Conversely, those who claim substantial deductions under 80C, 80D, HRA, or housing loan interest may find the old regime more advantageous.
A quick comparison through TaxBuddy’s AI-driven tax calculator helps determine the ideal option. The platform automatically compares both regimes, factoring in deductions, exemptions, and income sources to display which offers a lower tax outgo. This ensures accuracy and saves time when filing returns.
Surcharge, Cess, and Other Additions in the New Regime
Apart from the base tax rates, two additional charges apply to all taxpayers. The first is the Health and Education Cess of 4%, levied on the total tax payable. The second is the surcharge, applicable to individuals with higher income brackets:
10% on income above ₹50 lakh
15% on income above ₹1 crore
25% on income above ₹5 crore
These additions ensure proportional contribution from high-income earners while maintaining equity in the tax system. The surcharge cap of 25% introduced earlier remains unchanged for FY 2024-25, ensuring predictability for high-net-worth individuals.
Compliance and Filing Guidelines for AY 2025-26
For Assessment Year 2025-26, the Income Tax Department has extended the ITR filing deadline to September 15, 2025. This extension gives taxpayers additional time to verify their income, reconcile TDS and advance tax, and ensure accuracy before submission. PAN and Aadhaar linkage remains mandatory for filing, and pre-validation of the bank account is necessary for receiving refunds.
Taxpayers should also review their Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) for any mismatches before e-verification. The CBDT has simplified the e-filing interface and introduced automated validation features to make compliance smoother and error-free.
Role of TaxBuddy in Simplifying Tax Filing
TaxBuddy plays a pivotal role in making income tax filing effortless and accurate. Its AI-driven platform automatically identifies applicable tax slabs, calculates liabilities, and suggests whether the old or new regime is more beneficial. Users can upload Form 16, TDS details, and income statements, and the system ensures auto-validation and error checks.
Whether it’s filing under the new regime, claiming a rebate, or understanding salary structure, TaxBuddy provides end-to-end support through self-filing and expert-assisted options. Its mobile app further simplifies the process, allowing users to file returns, track refund status, and access real-time assistance securely from their phones.
Conclusion
The updated income tax slabs for FY 2024-25 reflect the government’s continued effort to simplify taxation and enhance compliance. With structured slabs, automatic rebates, and easier online filing, the new regime is a step toward transparency and efficiency. Taxpayers should compare both regimes before filing to determine which results in better savings and fewer compliance hassles.
For anyone looking for assistance in tax filing, it is highly recommended to download the TaxBuddy mobile app for a simplified, secure, and hassle-free experience.
FAQs
Q. Does TaxBuddy offer both self-filing and expert-assisted plans for ITR filing, or only expert-assisted options?Â
TaxBuddy provides flexibility by offering both self-filing and expert-assisted plans. Under the self-filing option, taxpayers can upload documents such as Form 16, TDS certificates, and bank statements, and the platform’s AI engine automatically fills in relevant details, performs error checks, and calculates taxes. For those with complex income structures—like business income, capital gains, or foreign assets—the expert-assisted plan allows tax professionals to review and file the return on the taxpayer’s behalf. This dual model ensures that both simple and complex returns are handled accurately and efficiently.
Q. Which is the best site to file ITR?Â
While the official Income Tax Department portal is the authorized platform for filing returns, many taxpayers prefer using TaxBuddy due to its ease of use, AI-driven automation, and real-time error validation. The platform simplifies ITR filing by integrating data from Form 16, AIS, and TIS to ensure accurate pre-filling. Additionally, it offers post-filing support, including assistance with defective returns, notices, and refund tracking—making it a comprehensive alternative to the government portal for those seeking a smoother, more guided experience.
Q. Where to file an income tax return?Â
An income tax return can be filed directly on the Income Tax Department’s official website (incometax.gov.in) or through trusted private platforms like TaxBuddy. Filing through TaxBuddy allows users to benefit from automated computation, AI-based validation, and expert review options, which minimize human errors and ensure timely filing. The process typically involves logging in, uploading financial documents, reviewing auto-filled data, and e-verifying the return online.
Q. What is the basic exemption limit under the new tax regime for FY 2024-25?Â
For FY 2024-25, the basic exemption limit under the new tax regime is ₹3,00,000. This means individuals with income up to ₹3 lakh do not have to pay any tax. However, those earning between ₹3,00,001 and ₹7,00,000 benefit from a 5% tax rate and are further eligible for a rebate under Section 87A, effectively making income up to ₹7 lakh tax-free. The new regime’s simplified slab system is designed to ensure that lower-income earners enjoy tax relief without needing to claim multiple deductions.
Q. Is Section 80C deduction allowed in the new regime?Â
No, deductions under Section 80C—such as investments in PPF, ELSS, LIC, or principal repayment on housing loans—are not permitted in the new regime. The intent behind this restriction is to eliminate complexity arising from multiple exemptions and to encourage voluntary, rather than mandatory, investment decisions. However, taxpayers can still claim the standard deduction of ₹50,000 under the new regime if they are salaried or pensioned individuals.
Q. Can salaried employees claim HRA under the new regime?Â
No, the House Rent Allowance (HRA) exemption is not available under the new regime. The government removed HRA, LTA, and other similar exemptions to make the new regime simpler and more uniform across income groups. Salaried individuals must therefore compare their potential savings under the old regime (where HRA is allowed) with the lower tax rates of the new regime before choosing which one to file under. Tools like TaxBuddy’s regime comparison calculator make this evaluation quick and accurate.
Q. How much standard deduction is available in the new regime?Â
The new tax regime allows a standard deduction of ₹50,000 for salaried individuals and pensioners. This deduction is automatically applied while calculating taxable income, reducing the overall tax burden. It’s one of the few deductions retained in the new regime to provide continued relief to middle-income earners. The deduction applies regardless of salary structure, ensuring a uniform benefit to all eligible taxpayers.
Q. What is the deadline to file ITR for AY 2025-26?Â
The Central Board of Direct Taxes (CBDT) has extended the ITR filing deadline for Assessment Year 2025-26 to September 15, 2025. This extension allows taxpayers more time to reconcile their income details, verify TDS and advance tax payments, and review AIS and TIS statements before submission. Filing before the due date also ensures timely refunds and avoids penalties under Section 234FÂ for late filing. TaxBuddy notifies users of due dates and assists in early preparation to avoid last-minute stress.
Q. Does the Section 87A rebate make income up to ₹7 lakh tax-free?Â
Yes, the Section 87A rebate provides complete tax relief for individuals whose taxable income does not exceed ₹7 lakh under the new regime. For instance, if an individual’s total tax liability is ₹25,000, the rebate will offset the entire amount, resulting in zero tax payable. However, once the taxable income exceeds ₹7 lakh, even by a small margin, the rebate is withdrawn, and tax becomes payable as per the applicable slab. This makes income planning crucial for those near the threshold.
Q. What is the highest surcharge rate under the new regime?Â
Under the new tax regime for FY 2024-25, the highest surcharge rate is capped at 25% for taxpayers with income exceeding ₹5 crore. This was reduced from 37% in earlier years to maintain consistency and make the tax structure more equitable. Other surcharge rates include 10% for income above ₹50 lakh and 15% for income above ₹1 crore. These surcharges, along with a 4% Health and Education Cess, apply on the total tax payable, ensuring progressive contribution from higher-income groups.
Q. Is the new regime mandatory for all taxpayers?Â
The new regime is not mandatory but has been made the default system for all taxpayers. This means if no selection is made while filing the return, the system will automatically consider the taxpayer under the new regime. However, individuals and Hindu Undivided Families (HUFs) can opt for the old regime by submitting Form 10IEA while filing their returns. It is advisable to evaluate both regimes annually to determine which one offers the most favorable outcome based on income composition and eligible deductions.
Q. Can TaxBuddy help compare tax between old and new regimes automatically?Â
Yes, TaxBuddy’s intelligent filing platform includes a built-in comparison feature that evaluates tax liability under both the old and new regimes in real time. By analyzing income sources, deductions, and exemptions, it automatically recommends the regime that leads to the lowest tax outflow. This feature saves time, prevents calculation errors, and ensures that taxpayers make informed decisions. Once the preferred regime is chosen, TaxBuddy assists in filing the return seamlessly with AI validation and expert review support.
