New Income Tax Rate Slab 2025-26

Sl. No.	Total Income (₹)	Rate of Tax (%)
1	Upto ₹4,00,000	Nil
2	₹4,00,001 to ₹8,00,000	5%
3	₹8,00,001 to ₹12,00,000	10%
4	₹12,00,001 to ₹16,00,000	15%
5	₹16,00,001 to ₹20,00,000	20%
6	₹20,00,001 to ₹24,00,000	25%
7	Above ₹24,00,000	30%

 

Benefits in New Income Tax Rate Slab 2025-26

 

Why a New Income Tax Bill?

The current Income Tax Act, 1961, has been in place for over 60 years and has been modified many times. The government feels it's time for a complete update to match today’s economy, new business models, and global standards.

What to Expect from the New Tax Bill?

While details will be revealed later, experts predict these key changes:

Proposed Change	Expected Impact
Simpler Tax Laws	Easier tax filing and fewer disputes.
Clear Rules for Digital & Crypto Transactions	Proper tax guidelines for digital assets.
Global Best Practices	Making India's tax system globally competitive.
Revised Tax Exemptions & Deductions	Possible changes in tax benefits (80C, 80D, HRA).
Easier Compliance for Everyone	AI-driven tax assessments to reduce legal issues.

How a Bill Becomes Law?

1. Drafting the Bill
• The Finance Ministry prepares the bill with expert advice.
• The Law Ministry checks for legal accuracy.
2. Introducing in Parliament
• The bill is presented in the Lok Sabha (lower house).
• The Finance Minister explains its purpose and benefits.
3. Debate & Discussion
• MPs discuss the bill and suggest changes if needed.
4. Approval by Lok Sabha & Rajya Sabha
• Lok Sabha votes on the bill; if passed, it goes to Rajya Sabha for review.
5. President’s Approval
• Once both houses approve, the bill goes to the President.
• The President can approve it or ask for reconsideration.
6. Becoming Law
• After approval, the bill becomes an official law.
• The government announces when it will take effect.

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Conclusion

The new Income Tax Bill aims to modernize India’s tax system, making it simpler, more transparent, and globally competitive. With revised tax slabs, increased rebates, and AI-driven compliance, it seeks to reduce the burden on taxpayers. Clear guidelines for digital assets and rationalized exemptions will bring more clarity and efficiency. The bill's structured approval process ensures thorough review and debate before becoming law. Overall, these reforms are expected to make tax filing easier and promote economic growth.

Frequently Asked Questions (FAQs)

1.Why is the government introducing a new Income Tax Bill?
The existing Income Tax Act, 1961, has been in place for over 60 years. The new bill aims to simplify tax laws, improve compliance, and align with global standards.

2.How will the new tax slabs affect taxpayers?
The proposed tax slabs offer lower tax rates for middle-income earners, along with higher rebates under Section 87A, reducing the overall tax burden.

3.What changes are expected for digital and crypto transactions?
The bill is likely to introduce clear tax rules for digital assets, ensuring better regulation and transparency in taxation.

4.Will existing deductions under Sections 80C, 80D, and HRA remain?
There may be revisions to exemptions and deductions, but details will be confirmed once the final bill is passed.

5.When will the new tax bill come into effect?
After passing through Parliament and receiving presidential approval, the government will announce the implementation date through official notifications.