How to Calculate Tax in New Regime 2025
The new tax regime introduced for 2025 has several changes, making tax calculations simpler and more transparent. Unlike the old system, where multiple exemptions and deductions were available, the new regime offers lower tax rates but removes most deductions.
To calculate your tax under the new regime, follow these steps:
- Identify your total taxable income.
- Refer to the new tax slab rates.
- Apply the appropriate tax rate to your income bracket.
- Subtract any eligible rebates.
According to the Income Tax Department and reliable sources like Economic Times and MoneyControl, the tax slab for 2025 is as follows:
- Up to ₹2.5 lakh – No tax
- ₹2.5 lakh to ₹5 lakh – 5%
- ₹5 lakh to ₹7.5 lakh – 10%
- ₹7.5 lakh to ₹10 lakh – 15%
- ₹10 lakh to ₹12.5 lakh – 20%
- ₹12.5 lakh to ₹15 lakh – 25%
- Above ₹15 lakh – 30%
Frequently Asked Questions
1. What is the new tax regime? The new tax regime offers lower tax rates but eliminates deductions.
2. Can I switch between old and new regimes? Yes, you can choose every financial year.
3. Is HRA exemption allowed? No, the new regime does not allow HRA deductions.
4. Are 80C deductions applicable? No, Section 80C deductions are removed.
5. What is the rebate under 87A? Those earning up to ₹7 lakh get a full rebate.
6. How do I opt for the new regime? You can select it while filing returns.
7. Can senior citizens benefit from the new regime? Yes, but they should compare with the old regime before choosing.
8. Are business owners eligible? Yes, but they must adhere to new rules.
9. Does the new regime offer standard deductions? A ₹50,000 standard deduction is applicable from 2025.
10. Are medical insurance deductions allowed? No, deductions under Section 80D are removed.
11. How is capital gains tax affected? Capital gains taxation remains the same.
12. Can I revert to the old tax regime? Yes, once a year for salaried employees.
13. Do NRIs benefit from the new regime? It depends on their taxable income and exemptions.
14. Is agricultural income taxed? Agricultural income remains tax-free.
15. What is the deadline for tax filing? The deadline remains July 31, 2025.