New Tax Regime 2025-26: How Much Tax Will You Actually Pay? (Tax Table Included)

Are you confused about how the latest budget changes affect your take-home pay? With the New Tax Regime now being the default choice, it is essential to understand exactly how much of your hard-earned money goes to the government.

In this guide, we break down the tax liability for resident individuals for F.Y. 2025-26 with a comprehensive tax chart.

The "Zero Tax" Threshold

One of the most significant advantages of the New Tax Regime for the upcoming year is the increased limit for tax-free income. If your total income is up to ₹12,00,000, your tax could effectively be zero after applying the standard deduction and tax rebates under Section 87A.

Key Note: The standard deduction has been increased to ₹75,000 for salaried employees under the New Regime.

Tax Liability Quick-View (F.Y. 2025-26)

Based on the latest data, here is what you can expect to pay at different income levels :- See the image

Note: The above figures include applicable cess and reflect the default tax regime for individuals under 60 years of age.

Why the New Regime?

While the Old Regime allows for deductions like 80C (LIC, PPF) and 80D (Health Insurance), the New Regime offers:

1. Lower Tax Rates: Significantly lower slabs for middle-income earners.

2. Simplicity: No need to track receipts or make forced investments just to save tax.

3. Higher Liquidity: More cash in hand every month to invest or spend as you choose.

Conclusion

Choosing between the Old and New regime depends entirely on your investments. However, for most taxpayers with an income up to ₹15-20 Lakhs who do not have massive home loans or insurance premiums, the New Tax Regime is proving to be the more pocket-friendly option.

Contact us on pgtulsian@gmail.com for more Information on assessing correct tax liability For FY 25-26