How will new income tax slabs and TDS thresholds impact you?

I heard that under the new income tax rules effective April 1, 2025, there have been changes in both income tax slabs and TDS deduction limits. As a senior citizen who depends on interest income, I want to understand how these changes affect me. - Anonymous

Yes, from April 1, 2025, certain changes pertaining to income tax slabs under the new regime and TDS deduction limits took effect.

Here's how the revised income tax slabs and TDS thresholds will impact all taxpayers from this financial year.

#1 Increase in TDS deduction limits

TDS thresholds have been raised for both senior and non-senior citizens. Here are the revised limits:

If your income exceeds the above thresholds, TDS will be deducted at 10 per cent.

You should also keep in mind that these are only TDS-exemption thresholds. You might be liable to pay tax if your total income exceeds the basic exemption limit.

#2 Revised income tax slabs

The table below shows the modified income tax slabs under the default (new) regime, effective from April 1, 2025.

Tax rebate under Section 87A: Under the revised new income tax regime, if your total income after deductions is up to Rs 12 lakh, you can claim a rebate under Section 87A and reduce your tax liability to zero. Simply put, you will not have to pay income tax if your taxable income is within Rs 12 lakh.

However, remember that the rebate doesn't apply to income taxed at special rates, including capital gains from stocks and equity funds. This means that if a part of your Rs 12 lakh income comes from capital gains, you may still need to pay taxes on that portion.

Also read: Budget and You: How will Budget 2025 impact your money?

This article was originally published on April 03, 2025.