The net zero tax limit has been increased in FY 2025-26 under the scope of Section 87A. Individuals with annual income up to Rs. 12 lakhs will get 100% tax rebate (up to Rs. 60k) along with standard deduction of Rs. 75,000 under the new tax regime.
As part of the Budget 2025 announcement, new income tax slabs and rates were introduced for the new tax regime u/s 115BAC of the Income Tax Act, 1961. These will be applicable on income earned post April 1, 2025.
Senior citizens investing in FDs will benefit from the increased TDS threshold of Rs. 1 lakh on FD Interest earned in FY 25-26. This TDS limit was earlier Rs. 50k annually.
Individuals earning more than 50 lakhs are not relieved as they still have to bear between 10% to 37% surcharge levied on their income under old tax regime and 10% to 25% surcharge under the new tax regime. This is over and above the 30% slab rate.
The new nil tax limit of 12 lakhs won’t be applicable to individuals opting for Old Tax Regime. The Income Tax slabs and rates have been kept unchanged for FY 2025-26.