The Income Tax Act for AY 2025-26 outlines important threshold limits and tax provisions for individuals. Under the old tax regime, income up to ₹2.5 lakh is exempt, with rates progressing to 30% for income above ₹10 lakh. In the new regime, exemptions start at ₹3 lakh, with reduced rates for various slabs. Surcharge rates range from 10% to 37% based on income, but the maximum is capped at 25% under the new regime. Key deductions include ₹50,000 under the old regime and ₹75,000 under the new regime for salaried individuals. House property income allows deductions for property taxes and interest on loans, with specific eligibility rules. Business and professional income require maintenance of accounts if turnover exceeds ₹25 lakh or income exceeds ₹2.5 lakh over the last three years, with audit mandates for specific thresholds. Cash payments over ₹10,000 per day are disallowed, and presumptive taxation applies at set percentages for small businesses and professionals. Long-term capital gains have specified exemptions, such as ₹50 lakh for NHAI/REC investments or ₹1.25 lakh for equity shares post-23.07.2024. These provisions ensure clarity on tax liabilities for taxpayers under different regimes and scenarios.
Important Threshold Limits under the Income Tax Act for AY 2025-26 for Individuals
1. Basic Exemption Limits:
| Income Slab – Old Regime | Tax Rate |
| 0 – 2,50,000 | Nil |
| 2,50,001 – 5,00,000 | 5% |
| 5,00,001 – 10,00,000 | 20% |
| Above 10,00,000 | 30% |
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| Income Slab – New Regime | Tax Rate |
| 0 – 3,00,000 | Nil |
| 3,00,001 – 7,00,000 | 5% |
| 7,00,001 – 10,00,000 | 10% |
| 10,00,001 – 12,00,000 | 15% |
| 12,00,001 – 15,00,000 | 20% |
| Above 15,00,000 | 30% |
2. Surcharge:
| Total Income | Rate |
| Rs. 50 Lakh <> Rs. 1 crore | 10% |
| Rs. 1 Crore <> Rs. 2 crores | 15% |
| Rs. 2 Crores <> Rs. 5 crores | 25% |
| Rs. 5 Crores < | 37% |
- Under the New Regime, maximum surcharge shall be restricted to 25%. Surcharge on Tax on Income chargeable u/s 111A, 112, 112A and dividend income shall be restricted to 15%.
- Cess – 4% on Income Tax + Surcharge
- Capital Gains Tax (Long Term – all assets) – 12.5% after 23.07.2024
- Capital Gains Tax (short Term – Equity shares/ Equity oriented mutual fund) – 20% after 23.07.2024
3. Income from Salaries
- Standard deductions – Rs.50,000 for old regime, Rs.75,000 for new Regime
4. Income from House Property
- Deduction – Property Tax & Water Tax (note – Water charges not eligible for deduction)
- Standard deductions – 30% of annual value / rent
- Interest on borrowed capital for construction/ acquisition of self-occupied property (eligible for old regime)
- Interest on borrowed capital for construction/ acquisition of let-out property (eligible for both old and new regime)
5. Income from Business/ Profession
| Maintenance of prescribed books of account is mandatory u/s 44AA | List of Persons:
1. Persons carrying on specified profession as per Sec. 44AA 2. Turnover > Rs. 25 Lakhs in any one of the Last 3 years 3. Income from Business/ Profession > Rs. 2.5 Lakhs in any one of the Last 3 years |
| Audit u/s 44AB | Business – Turnover > Rs. 1 Crore
Profession – Gross Receipt > Rs. 50 Lakhs Except: 1. cash receipt and payment made is less than 5% of total receipt or payment then limit shall be Rs. 10 Crores for Business 2. If assessee opts for presumptive taxation Scheme under Section 44AD |
| Cash Payment Limit | Rs. 10,000 per day |
| Presumptive taxation – Income from Business | 8% of turnover if turnover is less than Rs. 2 Crores |
| Presumptive taxation – Income from Profession | 50% of gross receipts if gross receipts is less than Rs. 50 Lakhs
Except: The cash receipt is less than 5% of total receipt then limit shall be Rs. 75 Lakhs |
6. Income from Capital Gains
| Exemption Limit on investment made in NHAI or REC from Long Term Capital Gains on sale of immovable property | Rs. 50,00,000 |
| Exemption Limit on long-term capital gain on Sale of Equity shares/ Equity oriented mutual fund | Rs. 1,25,000 after 23.07.2024 |
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Disclaimer:
The content of this article is for general informational purposes only and does not constitute professional advice. While every effort has been made to ensure the accuracy of the information, no responsibility is taken for any errors or omissions. Readers are encouraged to seek professional advice before acting on any information provided herein. The views expressed are personal and do not necessarily reflect the opinions of any organisation or entity associated with the author.
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easily understandable
Insightful,Thanks