Income Tax Rates for FY 2024-25 for Salaried Persons and Individuals

The Income Tax Slabs and Rates were amended during previous financial years by introducing the new tax regime in 2022-2023 and making subsequent amendments.

So, from the financial year 2024-25 (AY 2025-26), our Indian government has made the new tax regime the default regime.

But, the taxpayers can opt out of the new tax regime and choose to be taxed under the old regime.

1. For non-business taxpayers, the option can be exercised yearly while filing the ITR returns. So, they can switch back to the old regime or return to the new regime each year as per their likes and whims.
2. However, people with income from other sources, such as business, investments, or professional services, have this option only once in their lifetime: to switch to the old regime or switch back to the new regime.

To utilize this one-time option, they must furnish Form 10-EA on or before the due date of filing the return.

Old Tax Regime vs New Tax Regime

If you choose the old tax regime, you can claim deductions under various options of Chapter VI A of the Income Tax Act, such as HRA, LIC premiums, contributions to EPF and pension schemes, interest received from banks, health insurance premiums, medical treatment, interest paid on home loans, etc.

But the above deductions are not allowed if you opt for the new regime. In such cases, only the interest paid on house loans, contributions to the Central Government Pension Scheme (14%), and contributions to the Agnipath Scheme are allowed.

In either case, you will be paying more or less the same amount of tax (as both calculations are designed to squeeze as much tax as possible so there won't be much variation).

Now, let us have a look at the Income Tax slabs and Rates for Salaried Individuals.

Income Tax Slabs and Rates

I will provide the income tax rates for the new regime first, and then, the rates under the old regime.

Please note that these slabs and corresponding rates apply to individuals below the age of 60 and not to others.

Slabs & Rates Under New Tax Regime

Slabs and Rates Under Old Tax Regime

Note:-

Deductions under specific sections are allowed for those opting to be taxed under the Old Tax Regime as per the prevailing old practices, prior to introduction of the New Regime. These allowances shall be discussed in my upcoming articles.