New Tax Regime: Section 115BAC becomes Section 202 in the new tax bill; slabs, rates, details here

The provisions of the new tax regime outlined in Section 115BAC of the Income-Tax Act, 1961 will move to Section 202 in the new Income-Tax Bill 2025, which will take effect from April 1, 2026.

The new bill aims to simplify various provisions of the Income-Tax Act, 1961. While there are no changes to the policy regarding slabs and rates, the bill introduces a dedicated section for the new tax regime applicable to individual taxpayers, domestic companies, cooperative societies, and other eligible taxpayers.

Income-tax slabs and rates under Section 202

Further, there is also a rebate of up to 60,000 which will make normal incomes up to ₹12 lakh tax-free for taxpayers in the new regime. This rebate is provided separately under section 156 of the new bill. In the Income-tax Act 1961, this rebate is provided under section 87A.

What Section 156 says for the tax rebate in new tax regime

• If the total income of a resident individual assessee is chargeable to tax under the new tax regime, then from income-tax (computed before allowing the deduction) following deductions shall be allowed, if —

• the income does not exceed ₹12 lakh, 100% of the income-tax payable or ₹60,000, whichever is less;

• the income exceeds ₹12 lakh, the income-tax payable on the total income, reduced by total income which is in excess of ₹12 lakh

For those opting for the old tax regime, section 156 will provide a rebate of up to ₹12,500 if the total income does not exceed ₹5 lakh.