Income Tax: No outgo on THIS monthly average amount! ITR filing rules, tax slabs, rate changes from April 1 for FY 2025-26

Income Tax changes from April 1: Announced by FM Sitharaman, the new income tax slabs under the new regime raised the basic exemption limit from Rs 3 lakh to Rs 4 lakh, meaning individuals having a total income below Rs 4 lakh between April 1, 2025, and March 31, 2026, won’t have to file income tax returns.

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Written by: Himanshi Singh

Updated Mar 31, 2025 20:44 IST

Income Tax changes from April 1
Photo : ET Now Digital

Income Tax: No outgo on THIS monthly average amount! ITR filing rules, tax slabs, rate changes from April 1 for FY 2025-26

Income Tax changes from April 1: New financial year 2025-26 is set to commence on Tuesday, with which several income tax related changes will also come into effect. FY26 will introduce new income tax rules, including new slabs (under the new tax regime ), announced in the Union Budget 2025-26.
Interestingly, several taxpayers will see no income tax outgo from the financial year 2026 as Finance Minister Nirmala Sitharaman had announced a new tax structure while presenting the Union Budget 2025-26. She had proposed new direct tax slabs and rates under the new income tax regime.

Income Tax Changes from April 1

As per the proposals made by the finance minister on February 1, taxpayers will not need to pay any income tax for total income up to Rs 12 lakh per annum, i.e. average income of Rs 1 lakh per month, other than special rate income such as capital gains. Further, there would be NIL tax for salaried individuals earning up to Rs 12.75 lakh annually due to Rs 75,000 standard deduction.
Towards the new tax structure and other direct tax proposals, the Centre is set to lose revenue of about Rs 1 lakh crore.

Income Tax Slabs for FY 2025-26

Announced by FM Sitharaman, the new income tax slabs under the new regime raised the basic exemption limit from Rs 3 lakh to Rs 4 lakh, meaning individuals having a total income below Rs 4 lakh between April 1, 2025, and March 31, 2026, won’t have to file income tax returns.
Union Budget 2025-26 has proposed revised tax rate structure under the new tax regime as follows -
Rs 0 – 4 lakh - NIL
Rs 4 – 8 lakh - 5%
Rs 8 – 12 lakh - 10%
Rs 12 – 16 lakh - 15%
Rs 16 – 20 lakh - 20%
Rs 20 – 24 lakh - 25%
Above Rs 24 Lakh - 30%

ITR Filing Rule Changes Budget 2025-26

To rationalise TDS/TCS, Union Budget 2025-26 has doubled limit for tax deduction on interest earned by senior citizens from the present Rs 50,000 to Rs 1 lakh. Further, TDS threshold on rent has been increased to Rs 6 Lakh from Rs 2.4 Lakh per annum.
Meanwhile, FM Sitharaman had announced no change in the deductions available under the new tax regime. As per the current rules, a salaried individual will continue to receive a standard deduction of Rs 75,000 and 14 per cent of the basic for the employer's contribution to the NPS account.

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