Income Tax Brackets for AY 2024-25

For Assessment Year 2024-25, the new tax regime offered slabs of nil up to ₹3 lakh, 5% up to ₹6 lakh, 10% up to ₹9 lakh, 15% up to ₹12 lakh, 20% up to ₹15 lakh and 30% above ₹15 lakh, with a Section 87A rebate making income up to ₹7 lakh effectively tax-free. The old regime started at ₹2.5 lakh basic exemption with 5%, 20% and 30% slabs. The new regime is now the default and has been widened further in subsequent Finance Acts.

Mayank Wadhera

Published: 14 Sept 2023

Updated: 16 May 2026

4 min read

If you are filing your income-tax return today, the live assessment years are AY 2026-27 (income earned in FY 2025-26) and AY 2027-28 (income earned in FY 2026-27). The bracket structure for AY 2024-25 is now historical and is relevant only for revised returns or rectification cases, but the underlying logic — old regime versus new regime — has only sharpened in the years since.

Why Two Tax Regimes Still Exist

Finance Act 2020 introduced the new tax regime under Section 115BAC, and Finance Act 2023 made it the default. Finance Act 2026 has further pushed taxpayers toward the new regime by widening its slab boundaries and keeping the rebate under Section 87A favourable. The old regime survives because crores of taxpayers still claim Section 80C, HRA, home-loan interest and Chapter VI-A deductions that the new regime largely disallows.

AY 2024-25 Slabs Recap (Historical)

For income earned in FY 2023-24:

New regime: nil up to ₹3L, 5% up to ₹6L, 10% up to ₹9L, 15% up to ₹12L, 20% up to ₹15L, 30% above ₹15L. Rebate under 87A made income up to ₹7L effectively tax-free.
Old regime: nil up to ₹2.5L, 5% up to ₹5L, 20% up to ₹10L, 30% above ₹10L for individuals below 60. Senior and super-senior brackets had higher basic exemption.
Standard deduction of ₹50,000 (later raised) available to salaried taxpayers and pensioners in both regimes.

What Has Changed by AY 2027-28

The current new-regime slabs are wider, the standard deduction has been raised to ₹75,000 for salaried taxpayers and the Section 87A rebate continues to keep income up to ₹7 lakh effectively tax-free under the new regime. The old regime, where it survives, retains its 2.5/5/10 lakh slab structure but is being chosen by a shrinking share of filers each year because the deduction-heavy structure no longer matches modern salary structures.

How to Pick the Right Regime

Run a side-by-side computation rather than relying on rules of thumb. The break-even point depends on the deductions you can legitimately claim:

List your full Chapter VI-A deductions: 80C, 80D, 80CCD(1B), 80E, HRA, home-loan interest under 24(b), professional tax.
Compute tax under both regimes for your gross total income.
Account for the standard deduction of ₹75,000 (new) or applicable old-regime equivalent.
Check Section 87A rebate eligibility — it kicks in heavily under the new regime.
Pick the regime with lower total liability, factoring in surcharge and 4% health & education cess.

Surcharge and Cess — Often Forgotten

Slab rates are only the start. Surcharge applies at 10% above ₹50 lakh, 15% above ₹1 crore, 25% above ₹2 crore and 37% above ₹5 crore (with the new regime's maximum surcharge capped at 25%). Health & education cess at 4% applies on tax plus surcharge for every taxpayer. High-income earners should model surcharge precisely; one wrong assumption can shift the regime choice.

Sample Computation Under Both Regimes

A worked example clarifies regime choice better than rules of thumb. Consider a salaried individual with gross salary of ₹12 lakh, standard deduction of ₹75,000, 80C of ₹1.5 lakh, 80D of ₹25,000 and home-loan interest of ₹2 lakh in FY 2026-27. Under the old regime, taxable income is ₹7.5 lakh; tax with cess works out to roughly ₹65,000. Under the new regime, taxable income is ₹11.25 lakh; tax with cess works out to roughly ₹52,000. The new regime wins here despite the lost deductions.

Old regime: deduction-heavy taxpayers with HRA, home loan and 80C maxed out.
New regime: salaried taxpayers without major deductions, especially below ₹12 lakh income.
High-income (above ₹2 crore): compare surcharge impact — new regime caps surcharge at 25%.
Senior citizens with sizeable Section 80TTB interest: old regime may still help.
Re-evaluate every year — your deduction profile changes more often than you think.

Plan your TDS and advance tax around your chosen regime. Salaried taxpayers must declare their preferred regime to the employer at the start of the financial year so that the correct TDS is deducted on Form 12BB declarations. Mid-year switches inside the company payroll are messy and often impossible. Business and professional taxpayers must pay advance tax in four instalments by 15 June, 15 September, 15 December and 15 March, and getting the regime wrong at the advance-tax stage leads to interest under Section 234B and 234C at the time of filing.

Conclusion

Tax slabs are not a memorisation exercise; they are a decision-making tool. Once you know which regime saves you tax, stick to it across the year — your TDS, advance tax and investment choices all flow from that one decision. For AY 2024-25 specific cases, use Form 71 or Section 154 rectification rather than recomputing from scratch.

Frequently Asked Questions

Are AY 2024-25 slabs still relevant?

Only for past compliance — rectification under Section 154, revised returns within the window, Form 71 cross-year credits, or scrutiny assessments for FY 2023-24. Current filings use the slabs notified for AY 2026-27 and AY 2027-28 under Section 115BAC.

Can I switch tax regimes every year?

Salaried taxpayers without business income can choose between regimes each year while filing their return. Taxpayers with business or professional income who opt out of the new regime can switch back only once, so the choice is effectively permanent until that one-time switch is exercised.

What is the Section 87A rebate?

Section 87A provides a tax rebate that effectively makes income up to ₹7 lakh tax-free under the new regime (and up to ₹5 lakh under the old regime). It is available only to resident individuals and applies after slab tax is computed but before surcharge and cess.

Does the standard deduction apply in the new regime?

Yes. The standard deduction of ₹75,000 (current limit) is available to salaried taxpayers and pensioners under the new regime, in addition to the Section 87A rebate and the wider slab boundaries that make the new regime attractive for most salaried filers.