Income Tax News: Earning ₹25 Lakh Per Annum? Know Your Tax Slab, Deductions and Final Tax Payable

Income Tax News: The Budget 2025, presented by Finance Minister Nirmala Sitharaman, introduced revised income tax slab rates, bringing relief to middle-class taxpayers. With the income tax exemption limit increased to ₹12.75 lakh, salaried individuals earning below this threshold will not have to pay any tax, after considering the ₹75,000 standard deduction. But what about those earning more? If your annual salary is ₹25 lakh per annum, understanding your income tax liability under the latest tax slab structure is crucial. Let’s break it down in simple terms.

Understanding the Income Tax Slabs

Before calculating the tax for employees earning ₹25 lakh per annum, let’s first look at the revised income tax slab rates:

₹0 - ₹4 lakh: No tax

₹4 lakh - ₹8 lakh: 5% tax

₹8 lakh - ₹12 lakh: 10% tax

₹12 lakh - ₹16 lakh: 15% tax

₹16 lakh - ₹20 lakh: 20% tax

₹20 lakh - ₹24 lakh: 25% tax

Above ₹24 lakh: 30% tax

These new slabs determine how much income tax you will owe based on your salary.

Income Tax Calculation for ₹25 Lakh Salary

If you earn ₹25 lakh per annum, your taxable income will be calculated after deducting the standard deduction of ₹75,000.

• Gross Income: ₹25,00,000
• Standard Deduction: ₹75,000
• Taxable Income: ₹25,00,000 - ₹75,000 = ₹24,25,000

Now, let’s apply the income tax slab rates to calculate the tax:

₹0 - ₹4 lakh: No tax

₹4 lakh - ₹8 lakh (5%) → ₹20,000 tax

₹8 lakh - ₹12 lakh (10%) → ₹40,000 tax

₹12 lakh - ₹16 lakh (15%) → ₹60,000 tax

₹16 lakh - ₹20 lakh (20%) → ₹80,000 tax

₹20 lakh - ₹24 lakh (25%) → ₹1,00,000 tax

Above ₹24 lakh (30%) → ₹7,500 tax on the remaining ₹25,000

Total Tax Payable Under New Income Tax Slab

• Total Income Tax: ₹3,07,500
• Cess (4%) on Tax Amount: ₹12,300
• Final Tax Payable: ₹3,19,800

How Much Tax Will You Pay?

For employees earning ₹25 lakh per annum, the total income tax payable under the revised income tax slab structure is ₹3,19,800. Taxpayers should evaluate their options and choose the most beneficial tax-saving strategies.