Tax rates for Assessment Year 2025-26 - In case of Individual (Old)
- Nikhil Dad
- Mar 15, 2024
- 3 min read
General Slab Rates
An Individual is not liable to pay tax if his normal income is up to maximum exemption limit or basic exemption limit. The basic exemption limit and the tax rates in case of an individual depends upon his age during the relevant previous year. There are certain special incomes from which the benefit of maximum exemption limit is not available
The tax rates in case of an individual have been enumerated in below table:
Net income range | Resident Super Senior Citizen | Resident Senior Citizen | Any other Individual |
Up to Rs. 2,50,000 | Nil | Nil | Nil |
Rs. 2,50,001- Rs. 3,00,000 | Nil | Nil | 5% |
Rs. 3,00,001- Rs. 5,00,000 | Nil | 5% | 5% |
Rs. 5,00,001- Rs. 10,00,000 | 20% | 20% | 20% |
Above Rs. 10,00,000 | 30% | 30% | 30% |
'Super senior citizen' means an individual whose age is 80 years or more at any time during the relevant previous year.
'Senior citizen' means an individual whose age is 60 years or more at any time during the relevant previous year but less than 80 years on the last day of the previous year.
The CBDT has clarified that a person born on 1st April would be considered to have attained a particular age on 31st March, the day preceding the anniversary of his birthday. Thus, the question of attainment of age of eligibility for being considered a senior/very senior citizen would be decided in accordance with following date of birth:
Date of birth | Category of individual in the financial year 2024-25 |
On or before 01-04-1945 | Super Senior Citizen |
Between 02-04-1945 and 01-04-1965 | Senior Citizen |
On or after 02-04-1965 | Others |
New Tax Regime
Income-tax Act provides for the progressive tax system for individuals. Under a progressive tax system, the tax rate increases as the total income increases. The general slab rates applicable in case of an individual are 5%, 20% and 30%. The highest slab rate of 30% applies on income exceeding Rs. 10,00,000.
Section 115BAC provides for a new tax regime for individuals. This provision provides an altogether new tax slab wherein the tax rates have been significantly reduced. However, to avail the benefit of this tax regime, the assessee has to forgo specified exemptions and deductions.
Rebate under Section 87A
In case of a resident individual, rebate of up to Rs. 12,500 is allowed under Section 87A from the amount of tax if the total income of such individual does not exceed Rs. 500,000.
However, a resident individual paying tax as per the new tax regime under Section 115BAC shall be allowed a higher amount of rebate under Section 87A if total income is upto Rs. 7,00,000. Further, even if the total income of the resident individual exceeds Rs. 7,00,000, he will still be eligible for the rebate with marginal relief. This means that the rebate amount will be gradually reduced as the income level increases, instead of being abruptly removed, providing some relief to resident individuals with slightly higher income.
It is to be noted that there are certain special incomes from which this rebate is not available
Alternate Minimum Tax (AMT)
An individual is liable to pay Alternate Minimum Tax where tax payable by him, on his total income computed as per normal provisions of the Act, is less than 18.5%[3] of 'adjusted total income'. In such a case the 'adjusted total income' is taken as the income of such an individual and he shall be liable to pay tax at the rate of 18.5% of such 'adjusted total income'.
If an assessee has opted for new tax regime, the provisions of AMT shall not be applicable. Further, the provisions regarding computation and carry forward of AMT credit shall also be not applicable.
Surcharge
The tax calculated on the total income (whether as per the general slab rate or new tax regime) shall be further increased by the surcharge. The rate of surcharge to be calculated as a % of income tax shall depend on the quantum of taxable income. For Assessment Year 2025-26, there are four rates of surcharge – 10%, 15%, 25% and 37% where tax is calculated as per the general slab rate. However, where tax is calculated as per the new tax regime, there are three rates of surcharge – 10%, 15%, and 25%
Health & Education Cess
The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of 4% of such income-tax and surcharge.
