The Indian income tax system offers two regimes: the Old Tax Regime and the New Tax Regime. Taxpayers can choose between them based on their financial situations and preferences. Below is a comparison of the income tax slabs for the financial years 2024-25 (AY 2025-26) and 2025-26 (AY 2026-27) under both regimes, along with details on available deductions and guidance on selecting the suitable regime.

Old Tax Regime:

The Old Tax Regime maintains consistent tax slabs across both financial years, with variations based on age groups:

Individuals Below 60 Years & HUFs:

Income Range (₹)

Tax Rate (%)

Up to 2,50,000

Nil

2,50,001 – 5,00,000

5

5,00,001 – 10,00,000

20

Above 10,00,000

30

Senior Citizens (60 to 80 Years):

Income Range (₹)

Tax Rate (%)

Up to 3,00,000

Nil

3,00,001 – 5,00,000

5

5,00,001 – 10,00,000

20

Above 10,00,000

30

Super Senior Citizens (Above 80 Years):

Income Range (₹)

Tax Rate (%)

Up to 5,00,000

Nil

5,00,001 – 10,00,000

20

Above 10,00,000

30

Deductions Available in the Old Tax Regime:

  • Section 80C: Deductions up to ₹1,50,000 for investments in instruments like PPF, EPF, NSC, life insurance premiums, ELSS, etc.
  • Section 80D: Deductions for health insurance premiums:
    * Up to ₹25,000 for individuals below 60 years.
    * Up to ₹50,000 for senior citizens Income Tax India
  • Section 24(b): Deductions up to ₹2,00,000 on home loan interest for self-occupied property.
  • Section 80E: Deductions on interest paid on education loans.
  • Section 80G: Deductions for donations to specified charitable institutions.
  • Section 80TTA/80TTB: Deductions on interest income from savings accounts (₹10,000) and fixed deposits for senior citizens (₹50,000).

New Tax Regime:

Financial Year 2024-25 (AY 2025-26):

Income Range (₹)

Tax Rate (%)

Up to 3,00,000

Nil

3,00,001 – 7,00,000

5

7,00,001 – 10,00,000

10

10,00,001 – 12,00,000

15

12,00,001 – 15,00,000

20

Above 15,00,000

30

Financial Year 2025-26 (AY 2026-27):

Income Range (₹)

Tax Rate (%)

Up to 4,00,000

Nil

4,00,001 – 8,00,000

5

8,00,001 – 12,00,000

10

12,00,001 – 16,00,000

15

16,00,001 – 20,00,000

20

20,00,001 – 24,00,000

25

Above 24,00,000

30

Deductions Available in the New Tax Regime:

The New Tax Regime offers limited deductions compared to the Old Tax Regime. Notably, it includes a standard deduction of ₹50,000 for salaried individuals and pensioners. Most other exemptions and deductions, such as those under Sections 80C, 80D, and 24(b), are not available in this regime.

Key Changes and Comparisons:

  • Increased Tax-Free Threshold: In FY 2025-26, the basic exemption limit in the New Tax Regime has been raised from ₹3,00,000 to ₹4,00,000, providing relief to taxpayers at the lower end of the income spectrum.
  • Expanded Income Slabs: The New Tax Regime for FY 2025-26 features broader income slabs with adjusted tax rates, potentially reducing tax liability for middle-income earners.
  • Tax Rebate under Section 87A: For FY 2024-25, individuals with income up to ₹7,00,000 are eligible for a rebate under Section 87A in the New Tax Regime, effectively making their tax liability nil. In FY 2025-26, this threshold has been increased, allowing individuals with income up to ₹12,00,000 to benefit from the rebate.

Choosing Between the Two Regimes:

Selecting the appropriate tax regime depends on individual financial circumstances, income levels, and eligibility for various deductions. The Old Tax Regime may be more beneficial for those who can claim substantial deductions under sections like 80C, 80D, and 24(b). Conversely, the New Tax Regime, with its simplified structure and lower tax rates, might be advantageous for taxpayers who do not have significant deductions.

Filing an Income Tax Return (ITR) in India requires different documents depending on the type of taxpayer and the source of income. Below is a list of documents required for filing all types of ITRs:

1. Common Documents Required for All Taxpayers

  • PAN Card – Permanent Account Number is mandatory for filing ITR.
  • Aadhaar Card – Required for verification and linking with PAN.
  • Bank Account Details – IFSC, account number, and bank statements for income verification.
  • Form 26AS – Consolidated annual tax statement showing TDS/TCS deductions and tax paid.
  • AIS (Annual Information Statement) & TIS (Taxpayer Information Summary) – Provides details of financial transactions recorded by the Income Tax Department.

2. Salary/Income from Employment (ITR-1, ITR-2)

  • Form 16 – Issued by the employer, contains salary breakup and TDS details.
  • Salary Slips – Monthly salary slips for income calculation.
  • Form 10E – For claiming relief under Section 89 (for arrears of salary).

3. Income from House Property (ITR-1, ITR-2, ITR-3)

  • Rental Income Details – If you own rental property, details of rent received.
  • Home Loan Statement – To claim deduction on home loan interest (Section 24b) and principal repayment (80C).
  • Property Tax Receipts – To claim deductions for municipal taxes paid.

4. Business or Professional Income (ITR-3, ITR-4)

  • Profit & Loss Statement & Balance Sheet – Required for business taxpayers.
  • GST Returns (if applicable) – GSTR-1, GSTR-3B for businesses registered under GST.
  • Books of Accounts – If turnover exceeds prescribed limits, books of accounts must be maintained.
  • Form 3CD (for Audit Cases) – Tax audit report for businesses with turnover exceeding audit limits.
  • TDS Certificates (Form 16A) – If TDS is deducted on business income.

5. Capital Gains Income (ITR-2, ITR-3)

  • Sale & Purchase Details of Stocks, Mutual Funds, or Property – To calculate capital gains/losses.
  • Brokerage Statement for Stocks/Mutual Funds – If you trade in securities, Demat account transaction statements.
  • Property Sale Deed & Purchase Deed – For capital gains from real estate.
  • Form 64A/64B – If you receive income from a trust or AIFs.

6. Income from Other Sources (ITR-1, ITR-2, ITR-3)

  • Interest Certificates from Banks & Post Office – If you earn interest on savings accounts, FDs, RDs, or bonds.
  • Dividend Income Statements – If you earn dividends from stocks or mutual funds.
  • Lottery or Prize Money Documents – If applicable, TDS certificate on winnings.

7. Foreign Income & Assets (ITR-2, ITR-3)

  • Foreign Bank Account Details – If you have overseas bank accounts.
  • Foreign Salary/Income Details – If you earn income abroad.
  • Foreign Investments (if any) – Mutual funds, stocks, bonds, etc.

8. Deductions & Exemptions Documents (Applicable to Old Tax Regime)

  • Section 80C – PPF, LIC, EPF, ELSS, NSC, tuition fees receipts, etc.
  • Section 80D – Health insurance premium receipts.
  • Section 80E – Education loan interest payment certificate.
  • Section 80G – Donation receipts for charity deductions.
  • House Rent Receipts –For claiming HRA exemption.

You can write us on info@sktaxlawfirm.com or call on 📞 +91-9719586772 for Income Tax Return in India.

Old Tax Regime Vs. New Tax Regime, Deductions Available in the New Tax Regime