With the knowledge of income tax slabs of FY 2025-26 and FY 2024-25, one can plan their taxes. You may be an individual or a businessman who has just registered for a private limited company. You can save a good amount of money by knowing the difference between the new and old tax regimes.
Indian taxpayers in 2025 will have new slabs with higher exemption amounts under the new regime, though standard deductions are also present under the old regime. Everything that you need to choose the best tax plan is provided below, official information and sources for 2025, presented to make it authentic.
Income Tax Slabs Overview for FY 2025-26 and FY 2024-25
Slabs of income tax are the rates of tax payable on income earned during a year. The new regime of lower rates and fewer deductions, and the previous regime of twin exemptions and deductions like 80C, HRA, etc., can be opted for by the assessor.
- The new regime with increased exemption limits and slab revisions has been opted for in FY 2025-26.
- The previous tax regime slab rates are identical to FY 2024-25 but with increased deductions.
- Both regimes cover individuals and Hindu Undivided Families (HUFs).
What Are the New Tax Slabs Under Income Tax FY 2025-26?
In Budget 2025, the government altered the new tax regime slabs in a bid to enhance disposable income and ease the payment of taxes. The new slabs under Section 115BAC are:
| Income Range (₹) | Tax Rate FY 2025-26 (New Regime) |
| Up to 400000 | Nil |
| 400001 to 800000 | 5% |
| 800001 to 1200000 | 10% |
| 1200001 to 1600000 | 15% |
| 1600001 to 2000000 | 20% |
| 2000001 to 2400000 | 25% |
| More than 2400000 | 30% |
Section 87A relief is now available on income of 12 lakhs, that is, taxes are not payable by taxpayers on this income under the new regime.
How will you be the opposite of the earlier rules slab with FY 2024-25?
Current tax governance slabs are unchanged for FY 2024-25 (evaluation year 2025-26):
| Income Range (₹) | Tax Rate FY 2024-25 (Old Regime) |
| Up to 250000 | Nil |
| 250001 to 500000 | 5% |
| 500001 to 1000000 | 20% |
| More than 1000000 | 30% |
Rebate tax under Section 87A has also been limited to a maximum of ₹7 lakh. Salaried taxpayers are also eligible for a minimum of ₹50,000 deduction.
Why Do You Need to Consider the New Regime After Registration of a Private Limited Company?
If you are proceeding with the registration of a private company limited by shares, company-level tax planning and individual-level tax planning must be implemented. The majority of the entrepreneurs feel more secure under the new taxation regime:
- Lower tax rates with fewer complexities.
- Higher rebate rates reduce the professionals’ and start-ups’ tax burden.
- No investment or expense relief, so include it in your cost structure.
Top chartered accountant firms in Mumbai recommend cautious comparison of taxes to select the most suitable regime.
What Tax Regime to Select for Salaried Individuals or Businessmen?
Based on income and deduction pattern:
- New Regime: Best if you have not availed more than one deduction; it has raised exemption limits and slab rates.
- Old Regime: Best if you have investments under Section 80C, interest on home loan, or HRA.
For start-ups, after private limited company registration, expert advice helps in availing maximum business and personal tax relief.
Slabs under Income Tax effect on Filing of ITR
Based on your income and slab taxable, you have to file an Income Tax Return (ITR). For FY 2025-26 onward:
- Income up to the exemption limit (₹4 lakh in the new tax regime, ₹2.5 lakh in the old regime) need not be filed unless otherwise eligible.
- Filing allows an individual to avail rebates, deductions, and refunds.
- Good service by well-known chartered accountancy firms in Mumbai guarantees correctness and compliance.
What Are the Key Points for Business Individuals In Case of Income Tax Slabs?
Essential information on income tax slabs for businesspersons is discussed below:
- After registration of a private limited company, company and individual revenues are issues.
- For businesspersons with revenues over the threshold requirements, it is necessary to plan tax charges among regimes.
- Needs professional expertise from leading chartered accountancy companies in Mumbai while maintaining business allowances and personal tax reliefs.
- They provide their customised solutions, tax savings, and ITR filing services.
Conclusion
The slabs of taxation in FY 2025-26 and FY 2024-25 are indicative of a change in policy towards broadening the benefit and ease under the new taxation regime. The new salaried entrepreneurs and professionals who have initiated the process of private limited company registration need to make the most tax regime decision wisely. Epsilon Accounts Anusthan Fintech LLP is a well-known Mumbai-based chartered accountant company providing expert advisory services for arriving at a decision like this, reducing your liabilities, and fulfilling compliances. Get in touch with them today to avail personalised tax planning and Income Tax Return filing without any hassles.
FAQs
- Is 12 lakh tax-free for the old regimes?
No, in the old regime, the tax-free limit is ₹2.5 lakh; ₹12 lakh is fully taxable.
- How much FD interest is tax-free in the new tax regime?
No specific FD interest exemption exists in the new regime; all interest income is taxable as per the slabs.
- What are the tax slabs as per the old regime?
Old regime slabs: Up to ₹2.5 lakh no tax; ₹2.5-5 lakh 5%; ₹5-10 lakh 20%; above ₹10 lakh 30%.
- Which is better: the old or the new tax regime?
Better depends on deductions claimed; the old regime suits those using exemptions; new offers lower rates without deductions.
