Budget 2025 has completely reshaped the Income Tax Act, 1961. From 1st April 2025, every salaried employee, business owner, and investor will experience the impact of these reforms. Think of this like updating your smartphone’s operating system: just as updates remove glitches and add new features, these tax changes aim to simplify compliance, cut red tape, and boost savings.

In this article, I will walk you through every Income Tax Change from 1st April 2025, explain their impact, and show you how you can plan smarter. Moreover, I will also introduce you to a powerful Automatic Income Tax Preparation Software in Excel, specially designed for both government and non-government employees.

Table of Contents

Sr#	Headings
1	New Income Tax Slabs for FY 2025-26
2	Comparison with Previous Year Slabs
3	Increased Rebate Under Section 87A
4	Enhanced TDS Thresholds
5	Changes in Tax Collected at Source (TCS)
6	Extended Timeline for Updated Tax Returns
7	Incentives for IFSC Units
8	Tax Exemptions for Start-ups
9	Removal of Section 206AB and 206CCA
10	Deduction on Partner Remuneration
11	ULIPs to be Taxed as Capital Gains
12	Relaxation in the Deemed Let-Out Property Provision
13	Removal of Equalisation Levy
14	How These Changes Affect Individual Taxpayers
15	Key Takeaways for FY 2025-26

1. New Income Tax Slabs for FY 2025-26

The government introduced fresh tax slabs under the new default regime (Section 115BAC). By doing so, it encouraged individuals to save more while also increasing their disposable income.

Revised Slabs for FY 2025-26 (AY 2026-27):

• Up to ₹4,00,000 → Nil
• ₹4,00,001 – ₹8,00,000 → 5%
• ₹8,00,001 – ₹12,00,000 → 10%
• ₹12,00,001 – ₹16,00,000 → 15%
• ₹16,00,001 – ₹20,00,000 → 20%
• ₹20,00,001 – ₹24,00,000 → 25%
• Above ₹24,00,000 → 30%

Importantly, the Old Tax Regime continues unchanged but remains optional.

2. Comparison with Previous Year Slabs

When compared with FY 2024-25, the new slabs are wider and more taxpayer-friendly. For instance, the exemption limit now rises from ₹3 lakh to ₹4 lakh, offering relief to millions of middle-class earners.

This restructuring gradually expands each slab, thereby giving more breathing room to taxpayers across income levels.

3. Increased Rebate Under Section 87A

The rebate u/s 87A has been significantly enhanced:

• Earlier: ₹25,000 rebate (tax-free income up to ₹7 lakh).
• Now: ₹60,000 rebate (tax-free income up to ₹12 lakh under the new regime).

As a result, taxpayers earning up to ₹12 lakh will now pay zero tax.

4. Enhanced TDS Thresholds

The government raised several TDS thresholds to reduce unnecessary deductions and ease compliance. For example:

• Senior citizens’ interest income: ₹50,000 → ₹1,00,000
• Rent: ₹2,40,000 annually → ₹50,000 monthly
• Professional fees: ₹30,000 → ₹50,000
• Commission/Brokerage: ₹15,000 → ₹20,000

Clearly, freelancers, consultants, and small taxpayers will gain the most from this move.

5. Changes in Tax Collected at Source (TCS)

Two significant reforms reshaped TCS provisions:

1. Overseas Remittances under LRS – Threshold increased from ₹7 lakh to ₹10 lakh. Plus, no TCS applies to education loans.
2. Abolition of Section 206C(1H) – TCS on goods worth over ₹50 lakh has been scrapped.

Together, these steps remove compliance pressure on individuals and businesses engaged in global transactions.

6. Extended Timeline for Updated Tax Returns

Now, you can file an Updated Return (ITR-U) within 48 months (4 years) from the end of the assessment year.

However, you must pay additional tax depending on the delay:

• Within 12 months → 25% extra
• Within 24 months → 50% extra
• Within 36 months → 60% extra
• Within 48 months → 70% extra

This extension provides more flexibility for voluntary disclosures.

7. Incentives for IFSC Units

The government extended tax concessions for IFSC units until 31 March 2030. In addition, life insurance bought from IFSC offices by NRIs enjoys complete exemption under Section 10(10D).

This strengthens India’s global financial hub ambitions.

8. Tax Exemptions for Start-ups

Start-ups incorporated before 1st April 2030 can now enjoy 100% tax deductions for 3 out of 10 years under Section 80-IAC.

Consequently, entrepreneurs gain more breathing space to reinvest profits into their businesses.

9. Removal of Section 206AB and 206CCA

Earlier, businesses had to verify whether the recipient filed an ITR before deducting tax. From April 2025, these sections will be removed, thereby cutting compliance burden for both taxpayers and businesses.

10. Deduction on Partner Remuneration

Partnership firms and LLPs can now claim higher deductions:

• First ₹6,00,000 profit → Higher of ₹3,00,000 or 90%
• Balance → 60% of profit

This ensures partners receive fairer remuneration benefits.

11. ULIPs to be Taxed as Capital Gains

If annual premiums exceed ₹2.5 lakh or 10% of the sum assured, ULIP proceeds will be taxed as capital gains.

• STCG → 20%
• LTCG → 12.5%

If premiums remain below the threshold, exemptions under Section 10(10D) still apply.

12. Relaxation in Deemed Let-Out Property Provision

Previously, you could treat two homes as self-occupied (with NIL annual value) only if relocation was forced. Now, from April 2025, you can declare any two houses as self-occupied regardless of the reason.

13. Removal of Equalisation Levy

The 6% levy on digital ad payments to foreign service providers is removed from April 2025. This reduces costs for Indian companies relying on global platforms.

14. How These Changes Affect Individual Taxpayers

• Middle-class earners → Save more with wider slabs and higher rebates.
• Senior citizens → Earn higher tax-free interest.
• Property owners → Enjoy flexibility in self-occupied property rules.
• Investors → Need to reassess ULIPs.
• Businesses → Benefit from reduced TDS/TCS compliance.

15. Key Takeaways for FY 2025-26

• New tax regime slabs = fairer, progressive system.
• Rebate under Section 87A = zero tax up to ₹12 lakh.
• TDS/TCS compliance burden reduced.
• Start-ups and IFSC units get longer tax holidays.
• Revisions in property, ULIP, and partner remuneration rules provide equity.

Conclusion

The Income Tax Changes from 1st April 2025 reflect a bold step toward simplification. While the government aims to balance revenue collection with taxpayer relief, the real benefits will depend on how individuals and businesses adapt.

Think of these reforms as a smoother operating system update: fewer bugs, better performance, and more transparency. Whether you’re salaried, self-employed, or a business owner, you now have a clearer and more flexible tax framework to plan your finances.

Frequently Asked Questions (FAQs)

1. What are the major Income Tax Changes from 1st April 2025?
   Key changes include revised slabs, higher rebate under Section 87A, enhanced TDS/TCS thresholds, an extended timeline for updated returns, and tax reliefs for start-ups and IFSC units.
2. Is income up to ₹12 lakh tax-free from FY 2025-26?
   Yes, under the new tax regime, income up to ₹12 lakh is tax-free due to the enhanced rebate.
3. Do I still need to file ITR if my income is below ₹12 lakh?
   Yes. Filing ITR remains mandatory if your income crosses the basic exemption limit, even if tax liability is nil.
4. What happens to ULIPs after April 2025?
   ULIPs with annual premiums above ₹2.5 lakh or 10% of the sum assured will be taxed as capital gains.
5. Are the old tax regime slabs still available?
   Yes, the old regime continues unchanged but remains optional.

Download Automatic Income Tax Preparation Software All in One in Excel for the Government and Non-Government Employees (F.Y. 2025-26)

    

• ✅ Prepares your Tax Computed Sheet as per Budget 2025
• ✅ Inbuilt salary structure for both Govt & Non-Govt Employees
• ✅ Automatic Salary Sheet
• ✅ Automatic calculation of HRA Exemption u/s 10(13A)
• ✅ Automatic Income Tax Arrears Relief Calculation u/s 89(1) with Form 10E
• ✅ Automatic Form 16 Part A and B
• ✅ Automatic Form 16 Part B

On September 15, 2025 by www.taxexcel.net

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Introduction

The Union Budget 2025 brought significant tax changes that directly impact salaried individuals, government employees, and non-government employees alike. Many taxpayers are now asking: Which regime is better—the Old or the New Tax Regime?

As per the Budget 2025, the New Tax Regime is more beneficial than the Old Tax Regime for a majority of taxpayers. Why? Because under this new structure, income up to ₹12.5 lakh can be exempted effectively with rebates and deductions, while earlier the benefits were limited. Interestingly, the New Tax Regime allows full exemption up to ₹7 lakh without paying any tax, and after ₹7 lakh, the tax calculation begins with lower slab rates compared to the Old Regime.

Think of it like shopping in a supermarket. In the Old Regime, you had many discount coupons (deductions), but you had to keep track of them carefully. In the New Regime, you walk in, and most items are already at a lower price—simple, direct, and beneficial.

This article will explain the benefits of the Old and New Tax Regime as per Budget 2025, compare them, and show how you can simplify your tax filing with Automatic Income Tax Preparation Software All in One in Excel for F.Y. 2025-26.

Table of Contents

Sr#	Headings
1	Understanding the Old Tax Regime
2	Understanding the New Tax Regime
3	Key Announcements in Budget 2025
4	Benefits of the Old and New Tax Regime as per Budget 2025
5	Why the New Tax Regime Is Considered More Beneficial
6	Tax Exemption Up to ₹7 Lakh Explained
7	Effective Exemption Up to ₹12.5 Lakh in the New Regime
8	Comparison of Tax Slabs: Old vs New
9	Impact on Government Employees
10	Impact on Non-Government Employees
11	Role of Standard Deduction in Both Regimes
12	Automatic Income Tax Preparation Software All-in-One in Excel
13	How Software Simplifies Tax Filing
14	Common Mistakes Taxpayers Make While Choosing a Regime
15	Final Verdict: Which Regime Should You Choose?
16	Conclusion
17	FAQs

1. Understanding the Old Tax Regime

The Old Tax Regime was known for its multiple deductions and exemptions. Taxpayers could claim benefits under Section 80C, 80D, HRA, LTA, home loan interest deductions, and more. This regime rewarded those who invested in tax-saving instruments like PPF, ELSS, insurance policies, and NPS.

However, the downside was its complexity. Taxpayers had to plan investments carefully to save tax. Many found it overwhelming to keep track of different proofs, receipts, and deadlines.

2. Understanding the New Tax Regime

The New Tax Regime was introduced to simplify taxation. Instead of relying on deductions, it offers lower tax rates with fewer compliance requirements.

• Up to ₹7 lakh of income is tax-free.
• The effective benefit can go up to ₹12.5 lakh under the Budget 2025 provisions.
• Fewer deductions, but straightforward and transparent slab rates.

This makes it especially attractive to young professionals, freelancers, and salaried employees who do not want to lock their money in long-term tax-saving instruments.

3. Key Announcements in Budget 2025

The Budget 2025 highlighted a clear preference for the New Tax Regime:

• Standard Deduction of ₹75,000 is available.
• Tax rebate up to ₹7 lakh under Section 87A.
• Effective tax exemption up to ₹12.5 lakh with deductions like NPS and employer contributions.
• Focus on simplifying tax filing for both government and non-government employees.

4. Benefits of the Old and New Tax Regime as per Budget 2025

Both regimes have advantages depending on the taxpayer’s profile:

• Old Regime Benefits: High deductions if you invest in tax-saving instruments. Useful for those with home loans or large medical insurance premiums.
• New Regime Benefits: Simpler structure, less paperwork, and higher effective exemption. Great for people who prefer liquidity over locking funds.

5. Why the New Tax Regime Is Considered More Beneficial

The New Tax Regime wins because:

• Income up to ₹12.5 lakh can be non-taxable with rebates.
• You don’t need to chase multiple deductions.
• Salaried people with fewer investments save more.

In short, it saves both time and money while reducing stress.

6. Tax Exemption Up to ₹7 Lakh Explained

Under Section 87A, if your taxable income does not exceed ₹7 lakh, you pay zero tax under the New Regime. This makes it especially beneficial for middle-class taxpayers.

7. Effective Exemption Up to ₹12.5 Lakh in New Regime

With the standard deduction and employer contributions towards NPS, taxpayers can stretch their tax-free income limit up to ₹12.5 lakh. This is the biggest attraction of Budget 2025 for salaried individuals.

8. Comparison of Tax Slabs: Old vs New

• Old Regime: Higher slab rates but multiple deductions.
• New Regime: Lower slab rates, fewer deductions, more direct benefit.

This comparison shows why many are shifting toward the new system.

9. Impact on Government Employees

Government employees often enjoyed allowances under the Old Regime. However, Budget 2025 ensures that even government staff find better savings under the New Regime with standard deduction and NPS contributions.

10. Impact on Non-Government Employees

Private-sector employees benefit the most since many do not claim multiple deductions. The New Regime provides a clean, hassle-free approach with higher exemptions.

11. Role of Standard Deduction in Both Regimes

The standard deduction of ₹75,000 is available under both regimes. This levels the playing field and ensures every salaried person gets a direct benefit without extra paperwork.

12. Automatic Income Tax Preparation Software All-in-One in Excel

Manual calculations can be confusing. The Automatic Income Tax Preparation Software All-in-One simplifies everything. It allows both government and non-government employees to:

• Enter income details.
• Choose between the Old and New Regimes.
• Automatically calculate tax liability.

13. How Software Simplifies Tax Filing

This Excel-based tool works like a personal tax assistant. It automatically generates tax sheets, Form 16, and even helps with Form 10E for arrears. Instead of worrying about mistakes, you can file your return with confidence.

14. Common Mistakes Taxpayers Make While Choosing a Regime

• Not comparing both regimes before filing.
• Overestimating deductions in the Old Regime.
• Forgetting that liquidity has value, money locked in tax-saving schemes reduces flexibility.

15. Final Verdict: Which Regime Should You Choose?

If you are someone who invests heavily in tax-saving schemes, the Old Regime may still suit you. But for most taxpayers, especially those earning up to ₹12.5 lakh, the New Tax Regime is more beneficial as per Budget 2025.

16. Conclusion

The Budget 2025 has tilted the scales in favour of the New Tax Regime. With simple slabs, higher exemptions, and reduced paperwork, it is truly a win for the general public.

Combine this with Automatic Income Tax Preparation Software All in One in Excel, and you have a stress-free way to calculate, plan, and file your taxes with confidence.

17. FAQs

Q1. What is the maximum tax-free income under the New Tax Regime in Budget 2025?
You can enjoy an effective exemption of up to ₹12.5 lakh under the New Regime.

Q2. Is the Old Tax Regime still available in F.Y. 2025-26?
Yes, taxpayers can still choose the Old Regime if it offers better benefits for them.

Q3. Who benefits most from the New Tax Regime?
Salaried individuals and non-government employees with fewer deductions benefit the most.

Q4. Do government employees gain under the New Tax Regime?
Yes, thanks to the standard deduction and NPS benefits, government employees also save more.

Q5. How does the Automatic Income Tax Preparation Software help taxpayers?
It simplifies tax filing by auto-calculating tax liability under both regimes and reducing errors.

Download the Automatic Income Tax Calculator All-in-One for Government and Non-Government Employees with Form 10E in Excel for F.Y. 2025-26

    

• This Excel-based calculator instantly prepares your Tax Computation Sheet as per the provisions of Budget 2025.
• Moreover, it includes an inbuilt salary structure for both Government and Non-Government employees, making it user-friendly.
• You can also rely on its Automatic Salary Sheet, which ensures accuracy without manual effort.
• In addition, it automatically calculates the HRA exemption under Section 10(13A) with just a few entries.
• It further simplifies your work by automatically computing Income Tax Arrears Relief under Section 89(1) along with Form 10E.
• As a bonus, the tool generates Form 16 Part A and Part B automatically, reducing paperwork.
• Finally, it provides an automatic Income Tax Form 16 Part B, making the filing process seamless and stress-free.

On September 12, 2025 by www.taxexcel.net

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Introduction

Are you earning up to ₹12.75 lakh annually and wondering which tax regime is best for you? You are not alone. With the Union Budget 2025 making a groundbreaking announcement, taxpayers are more curious than ever. Earlier, under the new income tax regime, individuals earning up to ₹7 lakh paid no taxes. Now, thanks to Finance Minister Nirmala Sitharaman, this limit has been raised to ₹12 lakh. And when you add the standard deduction of ₹75,000, the effective zero-tax threshold becomes ₹12.75 lakh.

This means, if your income is within that limit, you can save completely on taxes without worrying about exemptions or deductions. Sounds interesting, right? Let us dive deeper to understand why the new tax regime might be your best choice, especially compared to the old tax regime. Plus, we will show you how to calculate your tax burden for both regimes using an Excel utility designed for both Government and Non-Government employees.

Table of Contents

Sr#	Headings
1	Understanding the New Tax Regime in 2025
2	Key Highlights of Budget 2025 for Salaried Employees
3	What Does the ₹12.75 Lakh Threshold Mean for You?
4	Comparing the New and Old Tax Regimes
5	Why Middle-Class Families Benefit More Under the New Regime
6	Standard Deduction Explained Simply
7	Should You Switch if You Already Claimed Deductions?
8	Example Calculations: New Regime vs Old Regime
9	How the Excel Utility Helps Calculate Taxes Automatically
10	Features of the Automatic Income Tax Calculator
11	Tax Savings Without Complex Paperwork
12	Boosting Consumption and Savings with Lower Taxes
13	Common Misconceptions About the New Regime
14	Step-by-Step Guide to Using the Excel Utility
15	Conclusion and Final Thoughts

Understanding the New Tax Regime in 2025

The new tax regime, introduced in earlier budgets and enhanced in Budget 2025, focuses on simplicity and lower tax rates. Unlike the old regime, it offers fewer deductions but makes up for it with broader tax-free limits. Now, with income up to ₹12 lakh exempt and an additional ₹75,000 standard deduction, salaried individuals can effectively earn ₹12.75 lakh without paying a single rupee in taxes.

Key Highlights of Budget 2025 for Salaried Employees

The Finance Minister’s announcement was crystal clear: taxpayers earning up to ₹12 lakh need not pay any income tax under the new regime. Salaried individuals get an extra boost with the standard deduction. This announcement not only relieves middle-class taxpayers but also reduces paperwork since you do not need to track multiple exemptions and investment proofs.

What Does the ₹12.75 Lakh Threshold Mean for You?

Imagine earning ₹1,06,250 per month. Under the old tax regime, you would have had to carefully plan your investments in LIC, PPF, ELSS, HRA, and more to reduce your tax liability. Now, under the new system, you enjoy a zero-tax burden up to ₹12.75 lakh, even without those deductions.

This gives you flexibility—spend your money, save in your preferred way, or invest wherever you like, without being forced into tax-saving instruments.

Comparing the New and Old Tax Regimes

Let us compare:

• Old Regime: Multiple exemptions (HRA, 80C, 80D, etc.), higher compliance, mandatory investment planning.
• New Regime: Fewer exemptions, higher tax-free threshold, easier compliance, no need for proof submission.

Clearly, for those who do not have significant deductions, the new tax regime emerges as a smarter option.

Why Middle-Class Families Benefit More Under the New Regime

Middle-class taxpayers, often earning between ₹8–12 lakh, are the real winners. With zero taxes on ₹12.75 lakh, families can redirect funds towards children’s education, healthcare, home loans, or simply build better savings. In other words, it creates room for financial freedom without tying money in locked tax-saving instruments.

Standard Deduction Explained Simply

Think of the standard deduction like a universal discount coupon the government gives every salaried employee. No matter your salary, you instantly get ₹75,000 reduced from your taxable income under the new regime. This makes your effective tax-free threshold ₹12.75 lakh, not just ₹12 lakh.

Should You Switch if You Already Claimed Deductions?

If you actively invest in PPF, ELSS, NPS, and claim housing loan benefits, the old regime might still suit you. However, if you prefer flexibility and do not invest much in tax-saving products, the new regime with its simplified structure will save you more.

Example Calculations: New Regime vs Old Regime

Suppose your annual income is ₹12.5 lakh:

• Old Regime: After deductions, you may still have some tax liability.
• New Regime: With the standard deduction, your net taxable income falls under ₹12.75 lakh, leading to zero tax.

Thus, for many salaried employees, the new regime is tax-free without the effort of tax planning.

Download and Calculate Your Tax Burden for Both Regimes with This Excel Utility F.Y.2025-26

How the Excel Utility Helps Calculate Taxes Automatically

Confused about calculations? The Automatic Income Tax Calculator in Excel is your go-to solution. It compares the new and old tax regimes instantly and shows your exact tax liability in each case.

Features of the Automatic Income Tax Calculator

• Prepares your Tax Computed Sheet as per Budget 2025
• Inbuilt salary structure for both Govt and Non-Govt employees
• Automatic Salary Sheet generation
• HRA Exemption Calculation U/s 10(13A)
• Income Tax Arrears Relief Calculation U/s 89(1) with Form 10E
• Automatic Form 16 (Part A & B) preparation

Tax Savings without Complex Paperwork

Gone are the days of collecting dozens of investment proofs. With the new regime and the Excel utility, your tax filing becomes as smooth as driving on a newly paved highway—straightforward and hassle-free.

Boosting Consumption and Savings with Lower Taxes

When taxpayers retain more disposable income, they naturally spend more and save smarter. This creates a positive cycle, fueling both personal financial growth and the overall economy.

Common Misconceptions about the New Regime

1. “It is only for high-income earners” – Not true; it benefits middle-class taxpayers the most.
2. “No deductions at all” – Standard deduction of ₹75,000 still applies.
3. “Complicated to switch” – You can choose annually at the time of filing ITR.

Step-by-Step Guide to Using the Excel Utility

1. Download the utility.
2. Enter your basic salary details.
3. Select whether you are a Govt or Non-Govt employee.
4. View automatic comparison of new vs old tax regimes.
5. Generate reports like Form 16, Salary Sheet, and HRA calculations.

Conclusion and Final Thoughts

The new income tax regime in Budget 2025 is a game-changer. With a zero-tax threshold of ₹12.75 lakh, it offers simplicity, flexibility, and maximum relief for salaried taxpayers. By adopting this regime, you not only save taxes but also enjoy freedom from paperwork. And with the help of the Automatic Excel Tax Calculator, comparing regimes and filing returns becomes effortless.

So, if you earn up to ₹12.75 lakh, ask yourself: why pay taxes unnecessarily when the new regime gives you a tax-free path?

FAQs

1. Who should opt for the new tax regime in 2025?
   Salaried individuals earning up to ₹12.75 lakh without major deductions should opt for the new regime.
2. Can I switch between the new and old tax regimes every year?
   Yes, salaried taxpayers can choose their preferred regime every year while filing their ITR.
3. Does the new regime allow any deductions?
   Apart from the ₹75,000 standard deduction, most traditional deductions like 80C and HRA are not available.
4. How does the Excel utility help in tax filing?
   It automatically calculates tax liability under both regimes, prepares Form 16, salary sheets, and compares results for better decisions.
5. Is the new regime better for middle-class families?
   Yes, especially for those with incomes up to ₹12.75 lakh, as it ensures zero taxes and more disposable income.

Download Automatic Income Tax Calculator All in One for the Government and Non-Government Employees with Form 10E in Excel for the F.Y.2025-26

   

Features of this Excel Utility:-

+This Excel Calculator can prepare at a time your Tax Computed Sheet as per Budget 2025

+ Inbuilt Salary Structure for both of Govt and Non-Govt Employees

+ Automatic Salary Sheet

+ Automatic calculation of H.R.A. Exemption U/s 10(13A

+ Automatic calculate Income Tax Arrears Relief Calculation U/s 89(1) with Form 10E

+ Automatic Form 16 Part A and B

+ Automatic Income Tax Form 16 Part B

On September 11, 2025 by www.taxexcel.net

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Introduction

Are you considering the new tax regime but still Tax Regime it’s the right choice? You’re not alone. Many salaried individuals and professionals often feel stuck between the old and new tax regimes. It’s a lot like standing at a fork in the road—one path looks familiar but comes with twists and turns, while the other promises a smoother journey with fewer hurdles.

In this article, you’ll learn about five key benefits of opting for the new tax regime in F.Y.2025-26. Even better, you’ll also discover how an Automatic Income Tax Preparation Software All-in-One can help you calculate your liability quickly and accurately.

Let’s break it down step by step so you can make an informed decision with confidence.

Table of Contents

Sr#	Headings
1	What is the New Tax Regime?
2	Difference Between Old and New Tax Regime
3	Why the New Tax Regime is Becoming Popular
4	Benefit 1: Simplified Tax Structure
5	Benefit 2: Lower Tax Rates for Most Individuals
6	Benefit 3: No Need for Complicated Investment Proofs
7	Benefit 4: Transparency and Ease of Filing
8	Benefit 5: Flexibility in Choosing Regime
9	How Automatic Income Tax Preparation Software Helps You
10	Features of the All-in-One Software
11	Step-by-Step Guide to Checking Your Tax Liability
12	Who Should Opt for the New Tax Regime?
13	Common Mistakes to Avoid While Choosing a Regime
14	Expert Tips to Maximise Benefits
15	Final Thoughts

What is the New Tax Regime?

The new tax regime, introduced in recent Union Budgets, aims to simplify income tax calculations. Instead of juggling dozens of exemptions and deductions, you pay tax at reduced slab rates without worrying about investment proofs. This approach reduces paperwork and makes the process much smoother for the average taxpayer.

Difference Between Old and New Tax Regime

Under the old regime, taxpayers could claim exemptions such as HRA, LTA, and deductions under sections like 80C and 80D, among others. However, this often required careful planning and documentation.

In contrast, the new regime skips most deductions but offers lower tax rates across slabs. The trade-off? You decide whether the simplicity outweighs the loss of deductions.

Why the New Tax Regime is Becoming Popular

People are shifting toward the new tax regime for one main reason—convenience. No more chasing HR for proof submissions or worrying about last-minute investments just to save taxes. It’s straightforward, faster, and ideal for those who value time over tax-saving strategies.

Benefit 1: Simplified Tax Structure

With the new regime, you don’t need to memorise dozens of sections. Instead, you just look at your income slab and apply the corresponding rate. This is especially beneficial for young professionals who may not have significant investments yet.

Benefit 2: Lower Tax Rates for Most Individuals

The biggest attraction is lower tax rates. Many salaried employees with incomes under ₹15 lakhs may find themselves paying less tax compared to the old regime. This means more money in your pocket at the end of the year.

Benefit 3: No Need for Complicated Investment Proofs

Remember the rush in March to submit LIC premiums, PPF contributions, or ELSS investments? With the new regime, you can skip that headache. Your salary slip itself is enough to calculate taxes—no extra paperwork required.

Benefit 4: Transparency and Ease of Filing

The new system ensures transparency. Since calculations are simple, you can file your return quickly without worrying about mistakes or disallowances. This not only saves time but also reduces the risk of getting a tax notice.

Benefit 5: Flexibility in Choosing Regime

The government allows you to choose between the old and new regimes every year while filing your return (for salaried employees). This flexibility means you can evaluate your finances annually and switch if needed.

How Automatic Income Tax Preparation Software Helps You

Now comes the interesting part—how do you know which regime works better for you? Here’s where the Automatic Income Tax Preparation Software All-in-One steps in.

This tool lets you compare both regimes side by side. Within minutes, you can see your exact liability under each system and make the smarter choice.

Features of the All-in-One Software

• Automatic Calculation: No manual effort, just enter your salary details.
• Regime Comparison: Side-by-side view of old vs. new tax liability.
• Form 10E Support: Integrated support for arrears and relief calculation.
• User-Friendly Design: Works smoothly in Excel, no technical skills needed.
• Updated for F.Y.2025-26: Includes latest tax slabs and rules.

Step-by-Step Guide to Checking Your Tax Liability

1. Download the software in Excel.
2. Enter your salary, allowances, and deductions (if any).
3. Select your regime option.
4. Review the automatic calculation.
5. Compare old vs. new regime tax liability.
6. Decide which regime saves you more.

Who Should Opt for the New Tax Regime?

• Young professionals with fewer investments.
• Employees in private firms without HRA or LTA benefits.
• Freelancers and consultants who want straightforward tax filing.
• Anyone preferring simplicity over maximising deductions.

Common Mistakes to Avoid While Choosing a Regime

• Ignoring deductions you already have under the old regime.
• Not using a tax calculator or software for comparison.
• Switching without checking the actual difference in tax savings.

Expert Tips to Maximise Benefits

• Always compare both regimes before filing.
• Use the Automatic Income Tax Preparation Software for accuracy.
• Plan early instead of making last-minute decisions.
• Remember, you can switch regimes every year if you’re salaried.

Final Thoughts

Opting for the new tax regime in F.Y.2025-26 can be a game-changer for many taxpayers. With its simplified structure, lower rates, and flexibility, it brings relief to those tired of complex tax planning. Pair it with the Automatic Income Tax Preparation Software All-in-One, and you’ll have a stress-free, accurate, and efficient way to manage your taxes.

So, why complicate your tax life when you can simplify it today?

FAQs

1. Can I switch between the old and new tax regimes every year?
   Yes, salaried employees can switch annually while filing their ITR. Business professionals, however, have restrictions.
2. Will I lose all exemptions under the new tax regime?
   Most exemptions like HRA, LTA, and deductions under 80C are not available. However, you benefit from reduced slab rates.
3. Is the Automatic Income Tax Preparation Software free?
   Some versions may be free, while premium versions offer advanced features like Form 10E support.
4. Who benefits the most from the new tax regime?
   People without significant investments or exemptions usually benefit more due to the lower tax rates.
5. Do I still need to file income tax returns under the new regime?
   Yes, filing ITR is mandatory if your income exceeds the basic exemption limit, regardless of the regime you choose.

Download Automatic Income Tax Calculator All in One for the Government and Non-Government Employees with Form 10E in Excel for the F.Y.2025-26

   

Features of this Excel Utility are:-

+This Excel Calculator can prepare your Tax Computed Sheet as per Budget 2025

+ Inbuilt Salary Structure for both Govt and Non-Govt Employees

+ Automatic Salary Sheet

+ Automatic calculation of H.R.A. Exemption U/s 10(13A

+ Automatic calculate Income Tax Arrears Relief Calculation U/s 89(1) with Form 10E

+ Automatic Form 16 Part A and B

+ Automatic Income Tax Form 16 Part B

On September 09, 2025 by www.taxexcel.net

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Introduction

Do you sometimes feel that income tax calculations are like solving a tricky puzzle with too many missing pieces? You’re not alone! Every salaried employee—whether working in government or the private sector—struggles to keep up with the latest rules. Thankfully, Budget 2025 has once again simplified things with the Standard Deduction U/s 16(ia). Combine this with automatic income tax preparation software in Excel, and you’ll have a powerful tool to calculate taxes accurately for F.Y.2025-26. Let’s walk through the details together.

Table of Contents

Sr#	Headings
1	What is Standard Deduction U/s 16(ia)?
2	Key Highlights from Budget 2025
3	Standard Deduction Limit for F.Y.2025-26
4	Why is the Standard Deduction Important?
5	Applicability for Government Employees
6	Applicability for Non-Government Employees
7	Difference Between Old and New Regimes
8	How Automatic Income Tax Software in Excel Helps
9	Features of All-in-One Excel Tax Software
10	Using the Software with Form 10E
11	Step-by-Step Example of Tax Calculation
12	Common Mistakes to Avoid in Claiming Deductions
13	Benefits of Filing with Form 10E
14	Comparison of Manual vs. Automated Calculations
15	Conclusion

1. What is Standard Deduction U/s 16(ia)?
The Standard Deduction U/s 16(ia) allows every salaried individual and pensioner to claim a flat deduction. Moreover, it reduces taxable income automatically without requiring any bills or proof. Consequently, employees save time and effort while filing returns. In fact, you can think of it as a discount coupon applied directly to your salary—automatic, simple, and hassle-free.

2. Key Highlights from Budget 2025
The Union Budget 2025 once again emphasised the importance of standard deduction. Furthermore, the Finance Ministry reaffirmed this benefit while introducing other slab-related changes. As a result, crores of employees continue to enjoy a fixed deduction from their salary income. In addition, this move reduces paperwork, creates fairness, and promotes compliance. Above all, it demonstrates the government’s commitment to easing tax burdens.

3. Standard Deduction Limit for F.Y.2025-26
For the financial year 2025-26, the deduction under Section 16(ia) continues at ₹50,000. Therefore, both government and non-government employees can claim it equally. Similarly, pensioners receive the same relief. In other words, this flat deduction promotes equality among taxpayers. Finally, it ensures that everyone gets at least some form of guaranteed benefit.

4. Why is Standard Deduction Important?
The standard deduction matters because it provides instant relief without any paperwork. For example, imagine walking into a store where the cashier reduces your bill by ₹50,000 every single year—without asking questions. Likewise, income tax authorities apply this deduction automatically. Consequently, taxpayers feel less pressure and more confidence during return filing. Most importantly, it makes the tax system easier to understand for ordinary people.

5. Applicability for Government Employees
Government employees, including teachers, clerks, and officers, enjoy direct benefits from this provision. Moreover, the deduction reduces their taxable salary and improves financial relief. On the other hand, it also ensures parity with private-sector employees. Therefore, this flat benefit works as a bridge between different employment categories. Above all, government workers feel assured that they receive equal treatment.

6. Applicability for Non-Government Employees
Non-government employees also claim the same deduction. Whether you work for a multinational company or a small business, the ₹50,000 deduction applies automatically. Consequently, private employees enjoy the same advantages as government staff. In addition, this provision motivates employees to comply with tax rules more easily. Finally, it proves that the system treats all salaried individuals fairly and consistently.

7. Difference Between Old and New Regimes

• Old Regime: You can claim the Standard Deduction along with HRA, 80C, and other exemptions.
• New Regime: Standard Deduction is allowed, but most exemptions are not.
  This flexibility helps taxpayers choose the system that works best for them.

8. How Automatic Income Tax Software in Excel Helps

Manual calculations can be stressful and error-prone. That’s where Automatic Income Tax Preparation Software in Excel steps in. It calculates tax liability in seconds, applying deductions like U/s 16(ia) automatically.

9. Features of All-in-One Excel Tax Software

• User-friendly interface
• Preloaded formulas for deductions and exemptions
• Compatible with both Govt and Non-Govt employees
• Integrated with Form 10E for arrears relief
• Instant tax computation

10. Using the Software with Form 10E

Form 10E is mandatory if you claim relief under Section 89(1) for salary arrears. The Excel software comes with this feature, ensuring compliance without confusion.

11. Step-by-Step Example of Tax Calculation

Let’s say your annual salary is ₹7,00,000.

• Subtract Standard Deduction ₹50,000 = ₹6,50,000
• Apply other eligible deductions like 80C, 80D, etc.
• Software calculates the exact tax liability and reliefs automatically.

12. Common Mistakes to Avoid in Claiming Deductions

• Forgetting to check eligibility under the chosen tax regime
• Not updating salary arrears with Form 10E
• Relying on outdated software without Budget 2025 updates

13. Benefits of Filing with Form 10E

Filing Form 10E avoids unnecessary notices from the Income Tax Department. It ensures your relief claims are valid, particularly when arrears or salary revisions are involved.

14. Comparison of Manual vs. Automated Calculations

• Manual: Time-consuming, prone to mistakes, needs tax knowledge
• Automated Excel Software: Quick, reliable, updated with the latest rules

15. Conclusion

In summary, Standard Deduction U/s 16(ia) for F.Y.2025-26 offers simple yet powerful tax relief to both government and non-government employees. With automatic income tax preparation software all in one in Excel, filing becomes stress-free. Add Form 10E, and you’ve got a complete tax solution—like having a smart assistant who never makes a mistake.

FAQs

1. What is the Standard Deduction U/s 16(ia) for F.Y.2025-26?
   It is a flat deduction of ₹50,000 available to all salaried individuals and pensioners.
2. Is the deduction different for government and non-government employees?
   No, both categories of employees can claim the same amount.
3. Can I claim the Standard Deduction in both Old and New Regimes?
   Yes, but the overall tax benefits vary depending on which regime you choose.
4. Why is Form 10E important for taxpayers?
   Form 10E is required when claiming arrears relief under Section 89(1). It ensures legal compliance.
5. How does Excel-based tax software help?
   It automates tax calculations, applies deductions like Standard Deduction U/s 16(ia), and integrates Form 10E for accurate results.

Download the Automatic Income Tax Calculator All in One in Excel for F.Y.2025-26, designed for both Government and Non-Government Employees with Form 10E.

Features of this Excel Utility are:-

• This Excel Calculator instantly prepares your Tax Computed Sheet as per Budget 2025, ensuring accuracy and saving time.
• Moreover, it includes an inbuilt Salary Structure for both Govt and Non-Govt employees, making it simple to customise.
• It also generates an Automatic Salary Sheet, which reduces manual errors.
• In addition, the tool automatically calculates H.R.A. Exemption U/s 10(13A) with precision.
• Furthermore, it computes Income Tax Arrears Relief U/s 89(1) seamlessly with Form 10E.
• Along with this, the software automatically generates Form 16 Part A and Part B.
• Finally, it prepares the Automatic Income Tax Form 16 Part B, completing the filing process effortlessly.

   

On September 04, 2025 by www.taxexcel.net

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Introduction

Taxes often feel like a puzzle, right? You sit with numbers, receipts, and rules that keep changing. But here’s the good news—Section 115BAC New Tax Regime for FY 2025-26 tries to make things easier by giving you simpler slabs and lower rates. Yes, there’s a catch—you give up most deductions and exemptions. But for many taxpayers, the trade-off works.

In this article, we’ll break down the Income Tax Section 115 BAC for F.Y.2025-26 in plain language. We’ll cover the latest tax slabs, available deductions, exemptions, benefits, and how it compare with the old regime. To make it practical, we’ll also show you how to calculate taxes using an Automatic Income Tax Preparation Excel Software, which makes the process almost effortless.

Let’s dive in!

Table of Contents

Sr#	Headings
1	What is Section 115BAC and Why It Matters?
2	New Tax Regime 2025 – An Overview
3	Tax Slabs Under Section 115BAC for FY 2025-26
4	Tax Slabs for FY 2024-25 (Comparison)
5	Who Can Opt for Section 115BAC?
6	Major Deductions Allowed in the New Regime
7	Exemptions Still Available
8	Deductions & Exemptions Not Allowed
9	Old vs. New Tax Regime: Detailed Comparison
10	Understanding Rebate Under Section 87A
11	Switching Between Old and New Regimes
12	Tax Planning Tips for Section 115BAC
13	Practical Examples – When New Regime Wins
14	Practical Examples – When Old Regime Wins
15	Automatic Income Tax Preparation Excel Software
16	Conclusion
17	FAQs

1. What is Section 115BAC and Why It Matters?

Section 115BAC introduced the New Tax Regime with reduced tax slabs. In return, you need to give up most of your deductions and exemptions. Think of it as choosing between a buffet (old regime with many tax-saving dishes) and a set meal (new regime with fewer choices but lower prices).

The best part? You can decide each year which regime to pick—except in some cases for business income.

2. New Tax Regime 2025 – An Overview

Starting FY 2025-26, the New Regime under Section 115BAC has become the default tax regime. That means if you don’t actively choose the old regime, the system automatically applies the new one.

This regime is particularly attractive for those who don’t have large investments or expenses eligible for deductions. It reduces compliance stress, as you don’t need to track multiple exemption proofs.

3. Tax Slabs Under Section 115BAC for FY 2025-26

Here’s the latest slab structure:

Income Range	Tax Rate
Up to ₹4,00,000	Nil
₹4,00,001 – ₹8,00,000	5%
₹8,00,001 – ₹12,00,000	10%
₹12,00,001 – ₹16,00,000	15%
₹16,00,001 – ₹20,00,000	20%
₹20,00,001 – ₹24,00,000	25%
Above ₹24,00,000	30%

This clearly lowers tax liability for middle-income earners, especially those between ₹8–15 lakh.

4. Tax Slabs for FY 2024-25 (Comparison)

In FY 2024-25, the slabs were slightly different:

Income Range	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%

The FY 2025-26 update increases the basic exemption to ₹4 lakh and softens the burden across slabs.

5. Who Can Opt for Section 115BAC?

·         Applicable for: Individuals and Hindu Undivided Families (HUFs).

·         Not applicable for: Companies, partnership firms, LLPs.

·         Condition: If you want the old regime, you must opt for it while filing your return.

Business income taxpayers have stricter rules—they need to file Form 10-IEA and can switch back only once.

6. Major Deductions Allowed in the New Regime

Although most deductions vanish, some still remain:

·         Employer’s contribution to NPS under Sec. 80CCD(2) – up to 14% of salary.

·         Additional employee cost deduction (80JJAA).

·         Agniveer Corpus Fund deduction (80CCH).

·         Standard deduction of ₹75,000 for salaried and pensioners.

·         Exemptions on gratuity, leave encashment, and voluntary retirement.

7. Exemptions Still Available

Even under Section 115BAC, you can enjoy:

·         Transport allowance for specially-abled employees.

·         Travel allowance for job-related movement.

·         Daily allowance for duty-related work.

·         Gifts up to ₹50,000.

·         Family pension deduction up to ₹25,000.

8. Deductions & Exemptions Not Allowed

What disappears in the new regime?

·         80C investments (PF, ELSS, Life Insurance).

·         80D health insurance premiums.

·         HRA and LTA.

·         Interest on self-occupied home loan.

·         Professional tax and entertainment allowance.

This makes the regime less attractive for heavy investors and property owners.

9. Old vs. New Tax Regime: Detailed Comparison

Deduction/Exemption	Old Regime	New Regime (115BAC)
80C (PF, ELSS, LIC)	Available	Not Available
HRA	Available	Not Available
Standard Deduction	₹50,000	₹75,000
80D (Health Insurance)	Available	Not Available
Home Loan (Self-occupied)	₹2,00,000	Not Available

Clearly, the new regime benefits those who don’t rely on deductions.

10. Understanding Rebate Under Section 87A

For FY 2025-26:

·         If taxable income ≤ ₹7 lakh → Rebate ₹25,000.

·         If taxable income ≤ ₹5 lakh (old regime) → Rebate ₹12,500.

·         New regime 2025-26 expands rebate to ₹60,000, making it more attractive for low-income earners.

11. Switching Between Old and New Regimes

·         Salaried employees: Can switch every year while filing ITR.

·         Business income taxpayers: Can switch only once in their lifetime back to the new regime after opting out.

So, salaried individuals enjoy more flexibility.

12. Tax Planning Tips for Section 115BAC

·         Compare both regimes before finalising.

·         If you claim fewer deductions → New regime suits you.

·         If you invest heavily (insurance, PF, ELSS, NPS) → Old regime saves more.

·         Use an Excel-based Income Tax Software to calculate accurately.

13. Practical Examples – When New Regime Wins

Example: Salary = ₹12.5 lakh, low deductions.

·         Old regime tax = ₹1,31,851

·         New regime tax = ₹79,300

Savings: ₹52,551 under Section 115BAC.

14. Practical Examples – When Old Regime Wins

Example: Salary = ₹10 lakh, with HRA + Health Insurance deductions.

·         Old regime tax = ₹49,941

·         New regime tax = ₹44,200

Here, old regime saves ₹5,741, making it more beneficial.

15. Conclusion

The Income Tax Section 115 BAC for F.Y.2025-26 offers relief through simpler slabs and reduced rates. It’s best for those who don’t claim many deductions. On the other hand, the old regime still shines if you maximize exemptions and investments.

The smart move? Compare both regimes each year and pick the one that minimizes your tax liability. And don’t forget—using an Automatic Excel Tax Calculator makes the job faster and error-free.

16. FAQs

Q1. What is Section 115BAC in simple terms?
Section 115BAC gives taxpayers the option to pay lower taxes under the new regime but without most deductions and exemptions.

Q2. Can I switch between old and new regimes every year?
Yes, salaried individuals can switch every year, but those with business income have restrictions.

Q3. What is the rebate under Section 115BAC for FY 2025-26?
Individuals with income up to ₹7 lakh get up to ₹60,000 rebate under the new regime.

Q4. Is HRA allowed in the new tax regime?
No, HRA is not available under Section 115BAC.

Q5. How does Excel-based tax preparation software help?
It automates tax computation, HRA exemption, arrears relief, and Form 16 generation—saving both time and mistakes.

Download Automatic Income Tax Preparation Excel Software for theF.Y.2025-26 as per Budget 2025-26

To save time and errors, you can use Automatic Excel-based Tax Software.

Features include:

·         Auto Tax Computation as per Budget 2025.

·         Inbuilt Salary Structures (Govt & Non-Govt).

·         Automatic Salary Sheet generation.

·         Auto HRA Exemption under Sec. 10(13A).

·         Income Tax Arrears Relief U/s 89(1) with Form 10E.

·         Automatic Form 16 (Part A & B).

This tool is like a tax calculator on steroids, simplifying everything for salaried employees.

Download Automatic Income Tax Preparation Excel Software for F.Y. 2025-26 as per Budget 2025-26

To save valuable time and avoid costly errors, simply use the Automatic Excel-based Tax Software. Moreover, this tool not only calculates taxes but also streamlines the entire process.

Key features include:

·         It automatically computes tax as per Budget 2025.

·         It provides inbuilt salary structures for both Government and Non-Government employees.

·         It generates salary sheets instantly without manual effort.

·         It calculates HRA exemptions automatically under Section 10(13A).

·         It prepares arrears relief calculations under Section 89(1) along with Form 10E.

·         It creates Form 16 (Part A & Part B) automatically.

In short, this software acts like a power-packed tax calculator on steroids, and therefore, it makes tax preparation effortless for salaried employees.

First of all, filing taxes can feel overwhelming when you try to manage everything manually. However, with the Automatic Excel-based Tax Software, you can complete the process quickly and accurately. Instead of wasting hours on calculations, you simply enter your details and let the tool do the rest.

Secondly, the software works as per Section 115BAC New Tax Regime for F.Y. 2025- 26   Which means you always stay updated with the latest rules. Whether you belong to the Government sector or the Non-Government sector, the inbuilt salary structure makes it easy to fit your income into the right tax brackets.

How Does It Simplify Your Work?

·         Instead of calculating manually, the tool automatically computes your tax liability as per the latest Budget 2025.

·         Rather than preparing multiple sheets, you instantly generate an automatic salary sheet in just a few clicks.

·         Moreover, you no longer need to worry about missing exemptions—because the software calculates HRA exemptions under Section 10(13A) for you.

·         Additionally, if you have arrears, the software prepares relief under Section 89(1) along with Form 10E automatically.

·         Finally, when you finish your calculations, the tool creates Form 16 (Part A & B) without any extra effort.

A Game-Changer for Salaried Employees

In conclusion, this software doesn’t just help—it transforms how you file taxes. Think of it as having a personal tax assistant in Excel format. By combining accuracy with automation, it reduces stress, saves time, and ensures you never miss out on essential compliance requirements.

So, if you want to stay stress-free this year, download the Automatic Income Tax Preparation Excel Software for F.Y. 2025-26 and experience how simple tax filing can become.

On September 03, 2025 by www.taxexcel.net

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