What Is the Tax Exemption Limit for 2025 in India?
What Is the Tax Exemption Limit for 2025 in India?
Updated Guide for FY 2024–25 | AY 2025–26
When the financial year begins, one of the most essential things every taxpayer wants to know is:
“How much income is tax-free this year?”
In simple terms, this is called the tax exemption limit—the portion of your income on which you don’t have to pay any tax.
In this article, we explain the tax exemption limit for FY 2024–25 (AY 2025–26) under both the Old Tax Regime and the New Tax Regime, and what it means for salaried individuals, senior citizens, and small taxpayers.
📘 What Is a Tax Exemption Limit?
The tax exemption limit is the basic threshold of income up to which an individual is not liable to pay income tax. Any income above this limit becomes taxable based on the applicable slab rates.
✅ Tax Exemption Limit Under Old Tax Regime (FY 2024–25)
| Category of Individual | Basic Exemption Limit |
| Individuals below 60 years | ₹2,50,000 |
| Senior Citizens (60–79 years) | ₹3,00,000 |
| Super Senior Citizens (80+ years) | ₹5,00,000 |
💡 Under the old regime, you can also claim deductions like:
- ₹1.5 lakh under Section 80C (PF, PPF, LIC, ELSS, etc.)
- ₹25,000–₹50,000 under 80D (Health Insurance)
- HRA, LTA, Home Loan Interest, and more
With smart tax planning, you can make income up to ₹6–7 lakh completely tax-free in the old regime.
✅ Tax Exemption Limit Under New Tax Regime (FY 2024–25)
| Annual Income | Tax Rate |
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 – ₹6,00,000 | 5% |
| ₹6,00,001 – ₹9,00,000 | 10% |
| ₹9,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
But here’s the good news:
✅ Full Rebate up to ₹7 lakh under Section 87A
If your total income is up to ₹7,00,000, you get a rebate of up to ₹25,000, making your effective tax = zero under the new regime.
Also, the standard deduction of ₹50,000 is allowed under both regimes now.
📅 What to Expect in 2026: New Tax Bill Changes
As per the proposed Income Tax Bill 2025 (to be applicable from FY 2026–27), the exemption limit is expected to increase:
- Up to ₹4,00,000: Nil tax
- With standard deduction of ₹75,000, effective tax-free income = ₹12.75 lakh
However, these changes do not apply for FY 2024–25.
🧠 Old Regime or New Regime – Which Is Better?
| Situation | Recommended Regime |
| You claim multiple deductions (80C/80D) | Old Regime |
| You have no investments or HRA | New Regime |
| Your income is below ₹7 lakh | New Regime (Zero tax) |
| You earn rent or home loan interest | Old Regime |
Final Words
For FY 2024–25, the tax exemption limit is:
- ₹2.5 lakh (Old Regime – regular taxpayers)
- ₹3 lakh (New Regime – universal)
- ₹7 lakh (New Regime – effective zero tax via Section 87A rebate)
- ₹5 lakh (Old Regime – for super senior citizens)
Understanding these limits helps you plan your salary structure, investments, and tax-saving strategies efficiently.
💡 Tip: Don’t wait until March to plan your taxes—start in April to take advantage of exemptions and deductions.
