The new financial year 2025-26 has started from April 1, and with it, the new income tax regime and the changes introduced in the 2025 budget have come into effect. Finance Minister Nirmala Sitharaman announced in the February 1 budget that income up to ₹12 lakh will be exempt from tax under the new tax system.
Under the new regime, individuals earning up to ₹4 lakh will pay no tax. Those with income between ₹4 lakh and ₹8 lakh will pay a 5% tax, while income between ₹8 lakh and ₹12 lakh will be taxed at 10%. Further income brackets will face higher taxes: ₹12 lakh to ₹16 lakh at 15%, ₹16 lakh to ₹20 lakh at 20%, ₹20 lakh to ₹24 lakh at 25%, and income above ₹24 lakh will be taxed at 30%.
The old tax regime remains unchanged, and now taxpayers have to decide whether to opt for the new or old tax system based on their individual financial situation.
