Income Tax Slabs Comparison: FY 2023-24 to FY 2025-26 in the New Tax Regime

Understanding the New Tax Regime

The introduction of the new tax regime has brought a significant shift in the income tax structure. For the financial years (FY) 2023-24, 2024-25, and 2025-26, taxpayers can expect to see variations in their tax liabilities based on their annual income. The government aims to simplify tax compliance, promote transparency, and enhance savings among individuals.

Income Tax Slabs: A Breakdown

Analyzing the income tax slabs for FY 2023-24 to FY 2025-26, we observe that the new tax regime establishes distinct slabs with varying rates. Below, we provide a comparison of how the income tax rates have been structured across the financial years:

Annual Income (₹)    FY 2023-24    FY 2024-25    FY 2025-26

Up to 3,00,000    Nil    Nil    Nil

3,00,001 – 6,00,000    5%    5%    5%

6,00,001 – 9,00,000    10%    10%    10%

9,00,001 – 12,00,000    15%    15%    10%

12,00,001 – 15,00,000    20%    20%    15%

15,00,001 – 20,00,000    30%    30%    20%

20,00,001 – 24,00,000    30%    30%    25%

Above 24,00,000    30%    30%    30%

Implications for Taxpayers

For the majority of taxpayers, the new tax regime represents a favorable shift, particularly for individuals earning up to ₹15,00,000. However, those within the higher income brackets, specifically between ₹12,00,001 and ₹24,00,000, should carefully evaluate their financial strategies to maximize potential savings. The decreased tax rate for the income slab of ₹9,00,001 – ₹12,00,000 in FY 2025-26 presents an opportunity for taxpayers to reconsider their income planning.

It is essential to note that individuals opting for the new tax regime will forfeit certain exemptions and deductions available under the old tax structure. Therefore, it is crucial to perform a cost-benefit analysis to determine the more advantageous approach based on individual financial situations.

The comparison of income tax slabs from FY 2023-24 to FY 2025-26 reflects the efforts made by the government in refining the tax system. Taxpayers will need to remain informed and agile, adapting their strategies as the financial landscape evolves. Staying updated on these comparisons and understanding their implications can lead to better financial planning in the years to come.