Income Tax Guide for Salaried Individuals (FY 2024-25)

Introduction

If you’re a salaried individual, income tax is likely deducted from your salary every month under TDS (Tax Deducted at Source). While this automates tax payments, it’s crucial to understand how your income is taxed, how to save taxes legally, and what benefits you can claim.

This blog will help you understand the basics of income tax applicable to salaried persons for Financial Year 2024–25 (AY 2025–26).

Key Highlights

Two Tax Regimes: Old vs New
Tax Slabs for FY 2024–25
Tax-saving Options (Old Regime)
Common Allowances and Deductions
ITR Filing and Form 16
Tips to Minimize Tax Legally

Old vs New Tax Regime

The government now offers two tax regimes:

1. Old Regime – Higher tax rates, but with deductions & exemptions

2. New Regime – Lower tax rates, but no common deductions

Income Slab	Old Regime	New Regime (Default from FY 24–25)
₹0 – ₹2.5 lakh	Nil	Nil
₹2.5 – ₹5 lakh	5%	5%
₹5 – ₹7.5 lakh	20%	10%
₹7.5 – ₹10 lakh	20%	15%
₹10 – ₹12.5 lakh	30%	20%
₹12.5 – ₹15 lakh	30%	25%
Above ₹15 lakh	30%	30%

Rebate u/s 87A is available in both regimes if total income is up to ₹7 lakh (new) or ₹5 lakh (old), making your tax liability zero.

Common Deductions (Old Regime)

You can reduce taxable income using these popular deductions:

Section	Description	Maximum Limit
80C	LIC, PPF, ELSS, EPF, Home Loan (principal)	₹1,50,000
80D	Medical insurance premium	₹25,000 (₹50,000 for senior parents)
24(b)	Home loan interest	₹2,00,000
80E	Education loan interest	No limit (8 years)
HRA	Rent paid (conditions apply)	Varies
Standard Deduction	Flat deduction on salary income	₹50,000

Note: These are not allowed in the New Regime, except for Standard Deduction (from FY 24–25) and employer’s NPS contribution.

Understanding Form 16

Your employer issues Form 16 at the end of the financial year. It contains:

Salary break-up
Deductions claimed
TDS deducted
PAN details

Use this to file your Income Tax Return (ITR-1) on the Income Tax e-filing portal.

Tips to Save Tax Legally

Choose the correct tax regime – Calculate under both and select wisely.
Utilize full 80C limit – Invest in PPF, ELSS, or pay LIC premiums.
Claim HRA – If you’re paying rent, keep receipts and PAN of landlord.
Buy medical insurance – Not just for tax benefit, but financial safety.
Plan for long term – Invest in tax-saving options early in the year.

Important Deadlines

Task	Due Date (FY 2024–25)
Investment proof submission to employer	Jan–Feb 2025
ITR Filing (without penalty)	31st July 2025
ITR Filing (with penalty)	Up to 31st Dec 2025

Conclusion

Understanding income tax isn’t just for professionals—it empowers every salaried individual to make better financial decisions. Whether you choose the old or new regime, staying compliant and planning ahead can help you save more and stress less.

Need help with tax planning or ITR filing? Consult a Chartered Accountant or reach out to a platform like VG AccounTax for expert support.

AccounTax