FY 2025-26 Income Tax Slabs — New Regime
The new tax regime is the default for FY 2025-26. A major change from Budget 2025: income up to ₹12 lakh is effectively tax-free due to the enhanced Section 87A rebate of ₹60,000. With the ₹75,000 standard deduction, salaried individuals with gross income up to ₹12.75 lakh pay zero income tax.
| Income Range | Tax Rate |
|---|
| Up to ₹4,00,000 | NIL |
| ₹4L – ₹8L | 5% |
| ₹8L – ₹12L | 10% |
| ₹12L – ₹16L | 15% |
| ₹16L – ₹20L | 20% |
| ₹20L – ₹24L | 25% |
| Above ₹24L | 30% |
How is In-Hand Salary Calculated from CTC?
Your CTC includes components that never reach your bank account — employer PF, gratuity, and group insurance. In-hand = Gross Salary − Employee PF (12% of basic) − Professional Tax − TDS. Most employees in India receive 65–75% of their CTC as in-hand salary.
For example, a ₹10 LPA CTC typically yields ₹68,000–₹74,000 monthly in-hand under the new tax regime with standard assumptions. Use the calculator above for your exact figure.
Frequently Asked Questions
Is income up to ₹12 lakh really tax-free in FY 2025-26? +
Yes. Under the new tax regime for FY 2025-26, the Section 87A rebate has been enhanced to ₹60,000. If your net taxable income is ₹12 lakh or less, the rebate wipes out the entire tax liability. For salaried employees, the ₹75,000 standard deduction pushes the effective zero-tax threshold to ₹12.75 lakh. Note: this does not apply to special-rate income like capital gains.
What is the difference between CTC and in-hand salary? +
CTC (Cost to Company) is the total annual cost an employer incurs for you. It includes your gross salary plus employer PF (12% of basic), gratuity (~4.81% of basic), and group insurance. In-hand is what lands in your account: Gross Salary minus employee PF, professional tax, and income tax TDS. The gap is typically 25–35% of CTC.
What is the standard deduction for salaried employees in 2025-26? +
The standard deduction is ₹75,000 for FY 2025-26 under both old and new tax regimes. It was enhanced from ₹50,000 in Budget 2024. No investment proof needed — it is automatically applied when computing taxable income.
How is HRA exemption calculated? +
HRA exemption (old regime only) is the minimum of: (1) Actual HRA received, (2) 50% of basic for metro cities / 40% for non-metros, (3) Rent paid minus 10% of basic salary. HRA exemption is not available under the new tax regime.
How much PF is deducted from salary? +
Employee PF is 12% of basic salary, capped at ₹1,800/month (12% of ₹15,000 statutory limit). Your employer contributes an equal amount — this is part of CTC but not your take-home. Your 12% reduces in-hand salary monthly.