New Tax Rules 2025: Income Slabs, Deductions & Regime Comparison

Tax season is here, and 2025 brings several changes that directly affect your income, savings, and compliance. Whether you’re a salaried employee, freelancer, or investor, this guide will help you understand everything about the new income tax rules in India for 2025.

🔍 Quick Overview of Tax Changes in 2025

In Budget 2025, the Government of India introduced modifications aimed at simplifying compliance and easing the tax burden, especially for middle-class taxpayers.

✅ Major Highlights:

Revised income tax slabs under the New Tax Regime
Standard deduction of ₹50,000 now allowed in new regime
Long-Term Capital Gains (LTCG) exemption for eligible startups
Higher TDS threshold for freelancers and small businesses

📊 New Income Tax Slabs Under New Regime (2025)

Here are the updated slabs for FY 2024-25 under the new tax regime:

Income up to ₹3 lakh – 0%
₹3 lakh to ₹6 lakh – 5%
₹6 lakh to ₹9 lakh – 10%
₹9 lakh to ₹12 lakh – 15%
₹12 lakh to ₹15 lakh – 20%
Above ₹15 lakh – 30%

This revised slab structure makes the new regime more favorable for those with fewer deductions.

🧾 Standard Deduction Now in New Regime

Earlier available only in the old regime, the standard deduction of ₹50,000 is now allowed in the new regime too. This is a major relief for salaried individuals and pensioners.

📉 LTCG Exemption for Startups

Investors in eligible startups will benefit from an LTCG tax exemption on investments made up to March 31, 2026. This move is aimed at fueling innovation and entrepreneurship in India.

💼 TDS Limit Raised for Freelancers & Professionals

The threshold for TDS deduction on professional income has been increased from ₹30,000 to ₹50,000, offering better cash flow for freelancers and consultants.

🧮 Should You Choose the Old or New Regime in 2025?

This decision depends on your salary structure, deductions, and investments. Here’s a quick comparison:

Criteria	Old Regime	New Regime
Tax Slabs	Higher rates with deductions	Lower rates with fewer deductions
Deductions Allowed	Yes (80C, HRA, etc.)	Mostly No
Best For	High deductions & investments	Simple salary structure

🗓️ Important Dates to Remember

ITR Filing Start Date: April 1, 2025
ITR Filing Deadline: July 31, 2025
Late Fee Applicable After: July 31, 2025

🙋 Frequently Asked Questions

1. Can I switch tax regimes every year?

Yes, salaried individuals can choose between old and new regimes every financial year. However, business owners can switch only once.

2. Can I claim 80C deductions in the new regime?

No. The new regime does not allow popular deductions like 80C, HRA, or LTA (except NPS employer contribution & standard deduction).

3. Which tax regime saves more money?

It depends. Use a reliable tax calculator to compare savings between regimes based on your income and deductions.

📌 Real Example Scenario

Let’s say your annual salary is ₹10,00,000 and you claim deductions of ₹2,00,000 under 80C, HRA, and others:

Old Regime: May result in lower taxable income and lower tax.
New Regime: Might save more if you don’t claim any deductions.

🔗 Internal Resource

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💬 Final Thoughts

The new tax rules in 2025 bring more clarity and flexibility for taxpayers. Whether you stick with the old regime or move to the new one, the key is to plan smartly, file on time, and take advantage of what suits your financial situation best.

NEW TAX RULES 2025