New income tax bill: The new Income Tax Bill will replace the current Income Tax Act, once it becomes effective from April 1, 2026

Has income tax slabs for FY 2025-26 in new, old tax regime changed in new Income Tax Bill? However, many taxpayers are worried that the new tax bill has made any changes in the income tax slabs under old and new tax regimes. Read on to know about it

The new Income Tax Bill will be tabled in Parliament today. The new Income Tax bill, effective from April 1, 2026, will replace the current Income Tax Act 1961. The new bill aims to simplify the language of the direct tax laws, delete obsolete and redundant provisions, and reduce litigation.

Apart from the changes mentioned above, many taxpayers were awaiting the new income tax bill to determine whether any changes were made in the income tax slabs and rates announced in Budget 2025.

Income tax slabs, rates as per new income tax bill

According to the draft copy of the new Income Tax Bill accessed by us, the new Income Tax Bill has not changed income tax slabs and income tax rates as announced in Budget 2025 for the upcoming fiscal year 2025-26.

Income tax slabs and rates under the new tax regime

Budget 2025 has announced new income tax slabs under the new tax regime for fiscal year 2025-26. The income tax slabs under the new tax regime applicable from April 1, 2025, are as follows:

Income tax slabs (In Rs)	Income tax rate (In %)
0-4,00,000	0
4,00,001-8,00,000	5
8,00,001-12,00,000	10
12,00,001-16,00,000	15
16,00,001-20,00,000	20
20,00,001-24,00,000	25
24,00,001 and above	30

Apart from announcing the new income tax slabs, the government has hiked the amount of tax rebate under Section 87A. From FY 2025-26, an individual is not required to pay any tax if the net taxable income does not exceed Rs 12 lakh in a financial year. This is because the tax rebate amount has been hiked to Rs 60,000 from Rs 25,000 earlier.

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Till March 31, 2025, there is no zero tax payable if the net taxable income does not exceed Rs 7 lakh. The income tax slabs under the new tax regime till FY 2024-25 (AY 2025-26) are as follows:

Income tax slabs (In Rs)	Income tax rate (In %)
0-3,00,000	0
3,00,001-7,00,000	5
7,00,001-10,00,000	10
10,00,001-12,00,000	15
12,00,001-15,00,000	20
15,00,001 and above	30

The new tax regime offers only two deductions to individual taxpayers. These are: standard deduction of Rs 75,000 from salary income and employer's contribution to the employee's NPS account for up to 14% of basic salary. No other deduction is allowed under the new tax regime.

Current income tax slabs under the old tax regime

Budget 2025 has not announced any change in the income tax slabs under the old tax regime. The income tax slabs under the old tax regime will remain the same for the upcoming fiscal year 2025-26.

The income tax slabs applicable to an individual depend on the age and income of an individual. There are three different income tax slabs under the old tax regime, depending on an individual's age - a) Individuals below 60 years of age, b) Senior citizens aged 60 years and above but below 80 years and c) Super senior citizens for age 80 years and above.
Income tax slabs for individuals below 60 years

Income tax slabs (In Rs)	Income tax rate (In %)
0-2,50,000	0
2,50,001-5,00,000	5
5,00,001-10,00,000	20
10,00,001 and above	30

Income tax slabs for senior citizens

Income tax slabs (In Rs)	Income tax rate (In %)
0-3,00,000	0
3,00,001-5,00,000	5
5,00,001-10,00,000	20
10,00,001 and above	30

Income tax slabs for super senior citizens

Income tax slabs (In Rs)	Income tax rate (In %)
0-5,00,000	0
5,00,001-10,00,000	20
10,00,001 and above	30

The old tax regime allows Section 87A tax rebate on net taxable incomes of up to Rs 5 lakh. An individual taxpayer can get a tax rebate of up to Rs 12,500 under Section 87A in the old tax regime.

However, unlike the new tax regime, the old tax regime offers various deductions and exemptions to the taxpayers. An individual can claim deductions under Section 80C, 80d, exemptions on house rent allowance, leave travel allowance, etc. The old tax regime also allows a standard deduction of Rs 50,000 from salary income and up to 10% of basic salary for the employer's contribution to the employee's NPS account.

This story originally appeared on: India Times - Author:Faqs of Insurances