All ABOUT ON TAX GUIDE FOR SALARIED INDIVIDUALS AY 2025-26
Table of Contents
TAX GUIDE FOR SALARIED INDIVIDUALS AY 2025-26
Under this blog outlines the tax guide for salaried individuals for AY 2025–26.
Tax Regimes for FY 2024-25 (AY 2025-26):
- New Tax Regime: Default regime under Section 115BAC (1A).
- Taxpayers can opt for Old Tax Regime if preferred.
- Business Income: Option to switch regimes is limited to once in a lifetime (Form 10-IEA required).
- Non-Business Income: Can switch annually in the Income Tax Return.
- Old Tax Regime: Continued applicability with tax rates and deductions as earlier.
Income Tax Rates
New Tax Regime (Section 115BAC):
| Sl. No | Income (₹) | Tax Rate |
|---|---|---|
| 1 | Up to 3,00,000 | Nil |
| 2 | 3,00,001 to 7,00,000 | 5% |
| 3 | 7,00,001 to 10,00,000 | 10% |
| 4 | 10,00,001 to 12,00,000 | 15% |
| 5 | 12,00,001 to 15,00,000 | 20% |
| 6 | Above 15,00,000 | 30% |
- Rebate under Section 87A: Available up to INR 25,000 for income up to INR 7,00,000 (Residents only).
- Standard Deduction: INR 75,000 (increased from INR 50,000).
- Marginal Relief: For income slightly exceeding INR 7,00,000.
Old Tax Regime:
| Sl. No | Income (₹) | Tax Rate |
|---|---|---|
| 1 | Up to 2,50,000 | Nil |
| 2 | 2,50,001 to 5,00,000 | 5% |
| 3 | 5,00,001 to 10,00,000 | 20% |
| 4 | Above 10,00,000 | 30% |
- Rebate: ₹12,500 for income up to INR 5,00,000 (Section 87A).
- Senior Citizens (60-80 years): Nil up to INR 3,00,000.
- Super Senior Citizens (80+ years): Nil up to INR 5,00,000.
Surcharge Rates (Both Regimes)
| Income Range (₹) | Surcharge Rate |
|---|---|
| Up to 50 Lakh | Nil |
| 50 Lakh – 1 Crore | 10% |
| 1 Crore – 2 Crore | 15% |
| 2 Crore – 5 Crore | 25% |
| Above 5 Crore | 25% (New Regime) / 37% (Old Regime) |
Note: Higher surcharge (25% or 37%) is capped at 15% for income under Sections 111A, 112, 112A, or dividends.
- Default Regime: The new tax regime is default. Taxpayers can opt for the old regime during filing.
- Health and Education Cess: 4% on total tax liability.
- AIS: Verify your income and tax details before filing.
Other breakdown of the key points tax guide for salaried individuals for AY 2025–26.
1. ITR Forms Applicable
- ITR-1 (SAHAJ): Eligibility: Residents earning ≤ ₹50L from salary/pension, one house property, or other sources (e.g., interest, dividend). and Ineligibility: NRIs, directors, income > ₹50L, foreign assets/income, deferred ESOPs, losses carried forward.
- ITR-2: Eligibility: Individuals/HUFs with capital gains or income not eligible for ITR-1. and Ineligibility: Those earning business or professional income.
- ITR-3: Eligibility: Individuals/HUFs earning from business or profession.
- ITR-4 (SUGAM): Eligibility: Individuals, HUFs, firms with presumptive income ≤ ₹50L (u/s 44AD/44ADA/44AE). and Ineligibility: NRIs, directors, foreign income/assets, deferred ESOPs, or income > ₹50L.
2. Other Forms
- Form 12BB: Claiming deductions (HRA, loans, etc.).
- Provided by: Employee → Employer.
- Deadline: Before salary processing.
- Form 16: TDS Certificate on salary.
- Provided by: Employer → Employee.
- Deadline: By May 31st.
- Form 26AS: Tax paid summary.
- Provided by: IT Dept → Taxpayer.
- Deadline: Online anytime.
- Form 10E: Claiming relief for arrears.
- Provided by: Employee → IT Dept.
- Deadline: With ITR filing.
3. Deductions Available
- Section 80C: Investments (PPF, ELSS, NSC, etc.) – ₹1,50,000.
- Under Section 80D: Health insurance premium – ₹25,000 (₹50,000 for seniors).
- Section 80TTA: Interest on savings accounts – ₹10,000.
- Under Section 80TTB: Interest on fixed deposits (seniors only) – ₹50,000.
- Section 80CCD(1): Employee contribution to NPS – 10% of salary (Basic + DA).
- Under Section 80CCD(2): Employer contribution to NPS – 14% (Central Govt).
- Section 80EEA: First-time home loan (2019–2022) – ₹1,50,000.
- Under Section 80EEB: Interest on EV loan – ₹1,50,000.
- Section 80G: Donations to charitable institutions – 50% to 100%.
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