Income-tax calculator – The proposal for the income tax slabs for FY2025-26(Assessment Year 2026-27) is yet to be formally announced by the Indian government. However, some educated guesses can be made regarding the possible change in the structure based on recent trends and discussions. The government may announce changes in tax slabs, tax rates, or deductions to be more aligned to economic goals, inflation, and the taxpayer’s needs. Below is a rough projection of what those income tax slabs may look like for FY 2025-26, considering inflationary aspects and previously identified trends.
Proposed Income Tax Slabs for FY 2025-26 (Individuals Below 60 Years)
Old Tax Regime (with Deductions)
The old regime allows for various deductions under sections like 80C, 80D, HRA, and others. Here’s a possible structure:
Income Slab (₹)
Tax Rate
Up to ₹3,00,000
Nil
₹3,00,001 – ₹6,00,000
5%
₹6,00,001 – ₹10,00,000
20%
Above ₹10,00,000
30%
Key Changes:
The basic exemption limit may increase from ₹2.5 lakh to ₹3 lakh to account for inflation.
The slab rates could remain the same, but the thresholds might be adjusted slightly.
New Tax Regime (No Deductions)
Tax calculation: Benefit on ₹12.75 lakh salary due to proposed slabs for FY 2025-26
Particulars
Calculation
Up to Salary income
12,75,000
Less: Standard deduction ₹75000
75000
Net taxable income
1₹12,00,000
Tax liability (existing)
FY 2024-25 ₹83,200
Tax liability (proposed)
FY 2025-26 Nil*
Benefit in tax liability
₹83,200
% of tax savings
100%
Tax calculation: Benefit on ₹18 lakh salary due to proposed slabs for FY 2025-26
Particulars
Calculation
Salary income
₹18,00,000
Less: Standard deduction
75,000
Net taxable income
17,25,000
Tax liability (existing)
FY 2024-25 ₹2,15,800
Tax liability (proposed)
20%FY 2025-26 ₹1,50,800
Benefit in tax liability
₹65,000
% of tax savings
30.12%
Tax calculation: Benefit on ₹25 lakh salary due to proposed slabs for FY 2025-26
Particulars
Calculation
Salary income
₹25,00,000
Less: Standard deduction
₹75000
Net taxable income
₹24,25,000
Tax liability (existing)
FY 2024-25 ₹4,34,200
Tax liability (proposed)
FY 2025-26 ₹3,19,800
Benefit in tax liability
₹1,14,400
% of tax savings
26.35%
Tax calculation: Benefit on ₹50 lakh salary due to proposed slabs for FY 2025-26
Particulars
Calculation
Salary income
₹50,00,000
Less: Standard deduction
₹75,000
Net taxable income
₹49,25,000
Tax liability (existing)
FY 2024-25 ₹12,14,200
Tax liability (proposed)
FY 2025-26 ₹10,99,800
Benefit in tax liability
₹1,14,400
% of tax savings
9.42%
Tax calculation: Benefit on ₹1 crore salary due to proposed slabs for FY 2025-26
Particulars
Calculation
Salary income
₹1,00,00,000
Less: Standard deduction
₹75,000
Net taxable income
₹99,25,000
Tax liability (existing)
FY 2024-25 ₹30,51,620
Tax liability (proposed)
FY 2025-26 ₹29,25,780
Benefit in tax liability
₹1,25,840
% of tax savings
4.12%
Conclusion
While the proposed income tax slabs for FY 2025-26 are speculative at this stage, they provide a glimpse into potential changes that could benefit taxpayers. The government’s focus on inflation-adjusted exemption limits and simplified tax structures may offer relief to middle-income earners.
To stay updated, keep an eye on the Union Budget 2025, where the official tax slabs and rates will be announced. In the meantime, use income tax calculators and consult financial advisors to plan your taxes effectively. By staying informed, you can make the most of available deductions and optimize your tax liability.