Income Tax Slab Rates: Income-tax Act 1961 vs 2025
Compare income tax slab rates under the Income-tax Act, 1961 and Income-tax Act, 2025. Understand old vs new regime, tax slabs, ₹12 lakh rebate and key changes.
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Income Tax Slab Rates for Individuals: Income-tax Act, 1961 vs Income-tax Act, 2025
The Indian income-tax system has undergone a major change with the introduction of the Income-tax Act, 2025, which came into effect from 1 April 2026. The new Act replaces the Income-tax Act, 1961 for tax years beginning on or after 1 April 2026.
For taxpayers, understanding the applicable tax slabs is essential for proper tax planning.
Income Tax Slabs Under the Income-tax Act, 1961
For individuals opting for the Old Tax Regime, the basic slab rates are:
The old regime allows various deductions and exemptions such as Section 80C, 80D, HRA and certain home-loan benefits, subject to applicable conditions.
New Tax Regime under the 1961 Act
For AY 2026-27, the revised new-regime slabs are:
Income-tax Act, 2025 — Tax Slabs
The Income-tax Act, 2025 continues the new-regime slab structure for individuals:
Thus, the maximum normal slab rate remains 30%.
₹12 Lakh Rebate — Important Benefit
Under the new regime, an eligible resident individual with taxable income up to ₹12 lakh can claim a rebate of up to ₹60,000 under Section 87A, subject to the applicable conditions.
For salaried individuals, the standard deduction may further reduce taxable income.
Therefore, a person with gross salary around ₹12–13 lakh may have little or no tax liability, depending on the exact taxable income and nature of income.
Old Regime vs New Regime — Which Is Better?
There is no single answer for everyone.
Old Regime may be beneficial if you have substantial deductions such as:
Section 80C investments
Health insurance under Section 80D
HRA exemption
Home-loan interest
Eligible NPS contributions
New Regime may be beneficial if you have fewer deductions and want to take advantage of the lower slab rates.
Income-tax Act, 1961 vs 2025 — Key Difference
In Simple Words
FY 2025-26 → Income-tax Act, 1961
FY 2026-27 onwards → Income-tax Act, 2025
The introduction of the new Act does not mean that every taxpayer will automatically pay more or less tax. The final liability depends on income, deductions, exemptions, rebate, surcharge and the nature of income.
Conclusion
Understanding the applicable tax regime is important for effective tax planning. Before filing your Income Tax Return, compare both regimes based on your actual income and eligible deductions.
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