Income Tax Basic Exemption Limit FY 2025-26

Updated: 3 June 2026 | Income-tax Act 2025 | New & Old Regime

New regime (FY 2025-26): Nil tax on 0–₹4L + 87A rebate for income ≤ ₹12L → effectively zero tax up to ₹12.75L salary. Old regime: ₹2.5L general, ₹3L senior citizens (60-79), ₹5L super senior (80+). Companies and firms have no basic exemption.

Basic Exemption Limit — All Categories FY 2025-26

Taxpayer Category	Old Regime	New Regime	Effective Zero-Tax Limit
Individual (below 60 yrs)	₹2,50,000	₹4,00,000 (nil slab)	₹12L (87A) / ₹12.75L salary
Senior Citizen (60-79 yrs)	₹3,00,000	₹4,00,000 (nil slab)	₹12L (87A) / ₹12.75L salary
Super Senior Citizen (80+)	₹5,00,000	₹4,00,000 (nil slab)	₹12L (87A) / ₹12.75L salary
HUF (Hindu Undivided Family)	₹2,50,000	₹4,00,000 (nil slab)	₹12L (87A)
NRI (non-resident)	₹2,50,000	₹4,00,000 (nil slab, no 87A)	₹4L (no 87A for NRI)
Domestic Company	Nil (tax from ₹1)	Not applicable	No exemption
Partnership Firm / LLP	Nil (30% from ₹1)	Not applicable	No exemption

₹12.75L

Zero income tax on gross salary up to ₹12.75 lakh (new regime FY 2025-26).
₹12L income - ₹75K standard deduction = ₹12L taxable → 87A rebate ₹60K wipes out all tax.

Basic Exemption Limit — Historical Trend

Financial Year	General (Old)	Senior Citizen (Old)	New Regime Zero-Tax Limit
FY 2021-22	₹2,50,000	₹3,00,000	₹2,50,000 (old nil slab)
FY 2022-23	₹2,50,000	₹3,00,000	₹2,50,000 (nil slab 0-2.5L)
FY 2023-24	₹2,50,000	₹3,00,000	₹7,00,000 (87A ₹25K)
FY 2024-25	₹2,50,000	₹3,00,000	₹7,00,000 (87A ₹25K)
FY 2025-26	₹2,50,000	₹3,00,000	₹12,00,000 (87A ₹60K)

When Must You File ITR Despite Income Below Exemption Limit?

Condition	ITR Filing Required?
Cash deposit > ₹1 crore in current accounts	Yes
Foreign travel expenditure > ₹2 lakh	Yes
Electricity bill > ₹1 lakh in year	Yes
TDS deducted — want refund	Yes (voluntary; required for refund)
Foreign assets / foreign income	Yes (mandatory)
Business loss to carry forward	Yes (must file to claim)
Director in company or unlisted equity shareholder	Yes

Frequently Asked Questions

What is the basic exemption limit for FY 2025-26?

FY 2025-26 basic exemption limits: New regime: ₹4,00,000 (nil slab 0-4L) for all individuals. With Section 87A rebate of ₹60,000: zero tax if total income ≤ ₹12,00,000. With standard deduction ₹75,000: zero tax on gross salary up to ₹12,75,000. Old regime: ₹2,50,000 for individuals below 60 years; ₹3,00,000 for senior citizens (60-79 years); ₹5,00,000 for super senior citizens (80+ years). 87A rebate: ₹12,500 for income ≤ ₹5L in old regime. Note: For new regime, the 87A rebate at ₹12L is far more beneficial than the old regime exemption for most taxpayers.

Is income below the basic exemption limit required to file ITR?

If income is below the basic exemption limit, ITR filing is generally NOT mandatory — but may still be required if: (1) You have deposited > ₹1 crore in current accounts during the year; (2) Foreign travel expenditure > ₹2 lakh; (3) Electricity bill > ₹1 lakh; (4) TDS/TCS deducted and you want a refund; (5) You have foreign assets or foreign income; (6) You have loss to carry forward (must file to claim). Voluntary filing recommended: to get TDS refund, build financial history for visa/loan applications, and to avoid future scrutiny.

Does the basic exemption limit apply to non-residents (NRI)?

NRIs get a basic exemption limit under the old regime (₹2.5L), but NOT under the new regime. However, NRIs cannot use the 87A rebate — so even if income is ≤ ₹12L, they pay tax from ₹2.5L onwards (old) or from ₹4L (new regime slabs apply, but no 87A rebate). Key NRI tax rules: LTCG on equity/MF: taxed at 12.5% without indexation; STCG: 20%; FD interest: 30% TDS; Rental income: 30% TDS. NRIs must also check DTAA with their country of residence for treaty benefits.

What is the basic exemption limit for companies and firms?

Basic exemption limit applies ONLY to individual taxpayers (and HUF). Companies and firms have NO basic exemption — they pay tax from the first rupee of profit. Tax rates: Domestic company: 25% (turnover ≤ ₹400Cr) or 30% (others); New companies under Sec 115BAB: 15%; Partnership firm/LLP: 30% flat; Cooperative society: slab rates starting 10%; AOP/BOI: at maximum marginal rate in most cases. Only individuals, HUF, and AOP/BOI (in certain cases) get the basic exemption benefit — all other entities do not.

How does the basic exemption limit work for HUF?

Hindu Undivided Family (HUF) gets the same basic exemption limit as an individual: Old regime: ₹2,50,000 (HUF has no senior citizen benefit regardless of karta's age). New regime: ₹4,00,000 nil slab + 87A rebate for ≤₹12L. HUF is a separate tax entity from its members — it files its own ITR. Family members can transfer ancestral property to HUF to create a separate income stream (though clubbing provisions may apply if property gifted from individual to HUF). ITR form: ITR-2 (no business income) or ITR-3 (business income).

Tax Slabs 2025-26 Section 87A Rebate New Tax Regime File ITR Senior Citizen Tax Tax Calculator

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