The New Tax Regime Exemption list for 2025 allows individuals and Hindu Undivided Families (HUFs) to opt for a simpler income tax system with lower rates and fewer deductions/exemptions. A tax exemption allows taxpayers to reduce their taxable income, and many are eligible for various exemptions. Below is the updated list for 2025.
Revised Income Tax Slab Rates for New Tax Regime 2025-26
In 2025-26, the income tax structure has changed to include 5 tax slabs, adjusting from the previous 6. Individuals with an income of up to Rs. 7 lakhs will not pay any tax, making this regime advantageous for lower-middle-income earners.
The tax slabs for the new tax regime, as announced for the 2025 budget, are as follows:
- Rs 0 to Rs 3 lakh - 0% tax rate
- Rs 3 lakh to Rs 6 lakh - 5%
- Rs 6 lakh to Rs 9 lakh - 10%
- Rs 9 lakh to Rs 12 lakh - 15%
- Rs 12 lakh to Rs 15 lakh - 20%
- Above Rs 15 lakh - 30%
New Tax Regime Exemption List and Deductions Not Allowed
Below are the exemptions and deductions that are not available under Section 115BAC of the Income Tax Act:
- Leave Travel Concession (LTC)
- House Rent Allowance (HRA)
- The standard deduction for salaried individuals
- Entertainment allowance and professional tax deductions
- Deductions under Section 80C, including life insurance premiums and PPF contributions, among others. (Note: Employer contribution under Section 80CCD(2) remains deductible.)
- Other deductions under Sections 80D, 80DD, 80E, and more, including various allowances.
List of Tax Deductions and Allowances Retained in the New Tax Regime
Some allowances are still available under Section 115BAC:
- Transport Allowance for disabled employees
- Conveyance Allowance for official duties
- Any travel allowance during work tours
- Daily Allowance for personal expenses incurred while away from normal duty
List of Deductions Allowed Under New Tax Regime
- Retirement benefits and gratuity
- Commutation of pension
- Leave encashment on retirement
- Retrenchment compensation
- VRS benefits
- Employer contributions to EPFO
- NPS withdrawal benefits
- Educational scholarships
- Public interest awards
For further details about the new tax regime exemption list for 2025, please visit the official Income Tax Department of India website: Income Tax Department.
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