Income Tax Rates and Slabs in India for FY 2024-25 and AY 2025-26

Income tax in India is structured around specific tax slabs and rates that vary depending on the financial year (FY) and assessment year (AY). For the FY 2024-25 and AY 2025-26, taxpayers have the option to choose between the New Tax Regime, which is now the default, or the Old Tax Regime, based on their financial preferences and planning.

Note: According to the Budget, the New Tax Regime will be a default option unless otherwise chosen by the taxpayer. Nevertheless, taxpayers can still choose between new as well as old tax regimes. ?

The table below outlines the tax slabs and corresponding rates under the New Tax Regime, as announced in the Union Budget on July 23, 2024.?

Income Tax Slabs Under New Tax Regime:?

Income Tax Slabs Under Old Tax Regime:?

Tax Rates for Domestic Companies:?

Tax Rates for Partnership Firms:?

For partnership firms and LLPs, the applicable tax rate remains at 30%.

Conclusion

With the New Tax Regime becoming the default choice, taxpayers need to evaluate their financial situations to decide whether to stick with the new structure or opt for the Old Tax Regime. Each regime has its advantages, depending on income levels and the ability to claim deductions.

This summary provides an essential guide for individuals and companies alike to navigate the tax landscape in India for the upcoming financial year.

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