Revised Tax Slabs Under New Regime: Here’s What You Pay on Incomes of ₹7 Lakh, ₹10 Lakh, ₹12 Lakh, and ₹20 Lakh

Finance Minister Nirmala Sitharaman unveiled significant adjustments to the income tax slabs under the new tax regime in the full Union Budget for FY25. In her Budget speech on July 23, the Finance Minister announced an increase in the standard deduction under the new tax regime from ₹50,000 to ₹75,000, making it more attractive for taxpayers. Additionally, the existing tax slabs were revised.
However, the Finance Minister kept the slabs and applicable tax rates under the old tax regime unchanged.

According to the proposed changes, annual income of up to ₹3 lakh will remain tax-free, while the slab for the 5% tax bracket has been extended to ₹3 lakh to ₹7 lakh from the previous ₹3 lakh to ₹6 lakh. The 10% tax rate will now apply to taxable income of ₹7 lakh to ₹10 lakh in a financial year, instead of the earlier ₹6 lakh to ₹9 lakh. The proposed changes will enable salaried individuals to save up to ₹17,500 per annum, the Finance Minister stated. The tax brackets for ₹12 lakh to ₹15 lakh, and ₹15 lakh and above, have been left unchanged.

New tax regime: Existing Tax Slabs

Total annual taxable income	Rate of tax applicable
Upto ₹3 lakh	NIL
From ₹3 lakh to ₹6 lakh	5%
From ₹6 lakh to ₹9 lakh	10%
From ₹9 lakh to ₹12 lakh	15%
From ₹12 lakh to ₹15 lakh	20%
₹15 lakh and above	30%

New tax regime: Revised Tax Slabs

In Budget 2024, under the new tax regime, the tax rate structure has been proposed as follows:

Total annual taxable income	Rate of tax applicable
Upto ₹3 lakh	NIL
From ₹3 lakh to ₹7 lakh	5%
From ₹7 lakh to ₹10 lakh	10%
From ₹10 lakh to ₹12 lakh	15%
From ₹12 lakh to ₹15 lakh	20%
₹15 lakh and above	30%

Here’s how much income tax you will pay under the revised new tax regime

Annual income up to ₹7.75 lakh

In Budget 2023, the government had increased the income rebate under the new tax regime from ₹5 lakh to ₹7 lakh. The standard deduction of ₹50,000 was extended to the new tax regime for salaried taxpayers and pensioners. So, income up to ₹7.5 lakh was tax-free.

Now, with the hike in the standard deduction to ₹75,000 in Budget 2024, there will be no income tax on annual incomes up to ₹7.75 lakh.

• Total Income: ₹7.75 lakh
• Standard deduction: ₹75,000
• Total taxable income: ₹7,00,000
• Tax on income up to ₹3,00,000- Nil
• Tax on Income ₹3,00,001 - ₹7,00,000: 5% or ₹20,000
• Rebate under section 87A- ₹25,000

Total applicable tax: Nil

Annual income up to ₹10 lakh

If you are an individual taxpayer with an annual income of up to ₹10 lakh, you will have to pay ₹42,500 as tax under the revised new tax regime against the previous total outgo of ₹52,500.

• Total Income: ₹10,00,000
• Standard Deduction: ₹75,000
• Taxable Income: ₹9,25,000
• Tax on ₹3,00,000- Nil
• Tax on Income ₹3,00,001 - ₹7,00,000: 5% or ₹20,000
• Tax on ₹7,00,001 - ₹9,25,000: 10% or ₹22,500

Total applicable tax: ₹42,500

Annual income up to ₹12 lakh

If you are an individual taxpayer with an annual income of up to ₹12 lakh, you will have to pay a total income tax of ₹68,750 under the revised new tax regime compared to ₹82,500 previously.

• Total Income: ₹12,00,000
• Standard Deduction: ₹75,000
• Taxable Income: ₹11,25,000
• Tax on ₹3,00,000- Nil
• Tax on ₹3,00,001 - ₹7,00,000: 5% or ₹20,000
• Tax on ₹7,00,001 - ₹10,00,000: 10% or ₹30,000
• Tax on ₹10,00,001 - ₹11,25,000: 15% or ₹18,750

Total applicable tax: ₹68,750

Annual income up to ₹20 lakh

Individuals with an annual income of ₹20,00,000 will have to pay income tax of ₹2,67,500 as against ₹2,85,000 previously.

• Total Income: ₹20,00,000
• Standard Deduction: ₹75,000
• Taxable Income: ₹19,25,000
• Tax on ₹3,00,000- Nil
• Tax on ₹3,00,001 - 7,00,000: 5% or ₹20,000
• Tax on ₹7,00,001 - 10,00,000: 10% or ₹30,000
• Tax on ₹10,00,001 - ₹12,00,000: 15% or ₹30,000
• Tax on ₹12,00,001 - ₹15,00,000: 20% or ₹60,000
• Tax on ₹15,00,001 - ₹19,25,000: 30% or ₹1,27,500

Total applicable tax: ₹2,77,500

The revisions under the new tax regime are aimed at empowering the middle class. However, taxpayers should be aware that the benefits of higher standard deductions and revised tax slabs are available only under the new tax regime. Since the government has left the old tax regime unchanged, taxpayers will need to choose the new tax regime when filing income tax returns (ITR) for FY 2024-25 to take advantage of these benefits. The new tax regime has been designated as the default regime for FY 2023-24 (AY 2024-25).