Income Tax in India: Complete Guide (FY 2024–25)
Income tax is a direct tax levied by the Government of India on the income earned by individuals, HUFs, companies, and other entities during a financial year. Understanding how it works helps you plan your finances better and save thousands every year.
What is a Financial Year vs Assessment Year?
The Financial Year (FY) is the year in which you earn income — April 1 to March 31. The Assessment Year (AY) is the year in which you file the tax return for that income. So income earned in FY 2024–25 is declared in AY 2025–26.
New Tax Regime Slabs (FY 2024–25)
The new tax regime is now the default regime. It offers lower tax rates but does not allow most deductions.
| Income Slab | Tax Rate |
|---|---|
| Up to ₹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% |
Old Tax Regime Slabs (FY 2024–25)
| Income Slab | Tax Rate (Below 60) |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Which Regime Should You Choose?
Generally, the new regime is better if your deductions are less than ₹3.75 lakh. If you have significant investments in PPF, ELSS, home loan, and HRA, the old regime might save more. Use the calculator above to compare both.
Key Deductions in Old Regime
- Section 80C — Up to ₹1.5 lakh (PPF, ELSS, LIC, EPF, home loan principal)
- Section 80D — Up to ₹25,000 for health insurance (₹50,000 for senior citizens)
- Section 24(b) — Up to ₹2 lakh on home loan interest
- Section 80CCD(1B) — Additional ₹50,000 for NPS
- Standard Deduction — ₹50,000 for salaried employees
- HRA Exemption — Based on salary, rent paid, and city
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Frequently Asked Questions:
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Use the Scheme Finder to discover every government benefit you qualify for — or open the Income Tax Calculator to see exactly how much tax you can save this year. Both are free, instant, and built for Indians like you.