New tax regime brings new slabs for all taxpayers for nation, first we will discuss the old tax regime.
Here are the details of the old tax regime in India for FY 2024-25 (AY 2025-26):
Income Tax Slabs and Rates
- Individuals below 60 years of age:
- Up to Rs 2,50,000: 0%
- Rs 2,50,001 to Rs 5,00,000: 5%
- Rs 5,00,001 to Rs 10,00,000: 20%
- Above Rs 10,00,000: 30%
- Senior citizens (aged 60 years and above but below 80 years):
- Up to Rs 3,00,000: 0%
- Rs 3,00,001 to Rs 5,00,000: 5%
- Rs 5,00,001 to Rs 10,00,000: 20%
- Above Rs 10,00,000: 30%
- Super senior citizens (aged 80 years and above):
- Up to Rs 5,00,000: 0%
- Rs 5,00,001 to Rs 10,00,000: 20%
- Above Rs 10,00,000: 30%
Deductions
- Standard Deduction: Salaried individuals and pensioners can claim a standard deduction of Rs 50,000. Family pensioners can claim a standard deduction of Rs 15,000.
- NPS Contribution: Deduction under Section 80CCD (2) for employer’s contribution to employee’s National Pension System (NPS) account.
- Section 87A Rebate: A tax rebate of Rs 12,500 is available if the taxable income does not exceed Rs 5 lakh.
New Tax Regime
Here are the details of the new tax regime income tax slab, tax rates, and deductions announced in the Indian Budget 2025:
Income Tax Slabs and Rates
- Up to Rs 4,00,000: Nil
- Rs 4,00,001 – Rs 8,00,000: 5%
- Rs 8,00,001 – Rs 12,00,000: 10%
- Rs 12,00,001 – Rs 16,00,000: 15%
- Rs 16,00,001 – Rs 20,00,000: 20%
- Rs 20,00,001 – Rs 24,00,000: 25%
- Above Rs 24,00,000: 30%
Deductions
- Basic Exemption Limit: Rs 3,00,000. No tax is payable if gross income in a financial year does not exceed this amount.
- Standard Deduction: Salaried taxpayers can claim a standard deduction of Rs 75,000 from the gross salary income.
- Employer’s Contribution to NPS Tier-1: A maximum deduction of 14% of the basic salary is allowed as a deduction from gross taxable income.
- Section 87A Rebate: The rebate limit has been raised from Rs 7 lakhs to Rs 12 lakhs. For salaried individuals eligible for a standard deduction of Rs 75,000, the effective rebate limit now stands at Rs 12.75 lakhs.
Under the new tax regime introduced in the Budget 2025, senior citizens in India will enjoy several tax benefits:
Tax Slabs
The tax slabs for senior citizens remain unchanged. However, the overall tax structure has been simplified to provide relief to all taxpayers, including senior citizens.
Deductions
- Higher Tax Deduction Limit on Interest Income: The limit for tax deduction on interest income for senior citizens has been doubled from Rs 50,000 to Rs 1 lakh.
- Standard Deduction: The standard deduction for salaried individuals has been increased from Rs 50,000 to Rs 75,000.
- TDS on Rent: The TDS threshold on rent has been increased from Rs 2.4 lakh to Rs 6 lakh.
- NSS Withdrawals: Withdrawals made from National Savings Scheme (NSS) accounts by individuals on or after August 29, 2024, will be exempt from penalties.
- NPS Vatsalya Accounts: NPS Vatsalya accounts will now receive the same tax benefits as regular National Pension System (NPS) accounts, subject to overall contribution limits.
These changes aim to ease the financial burden on senior citizens and simplify tax compliance.