Proposed New Tax Regime Slabs+Home Loan Interest: How you can save Rs 1.38 lakh/year on Rs 25 lakh income and Rs 50 lakh home loan; see expert calculations
Revised Tax Slab, Repo Rate Cut: For taxpayers and home loan borrowers, two important announcements this month were revised new tax regime slabs and a 25 bps repo rate cut. The combination of both can help one save a significant amount in tax payment and home loan interest.
Revised Tax Slab, Repo Rate Cut: Finance Minister Nirmala Sitharaman made an important announcement on February 1, 2025, when she revised new tax regime slabs and increased income tax to Rs 12 lakh for the non-salaried class and Rs 12.75 lakh for the salaried class. Days later, newly appointed Reserve Bank of India Governor Sanjay Malhotra announced a 25 bps repo rate cut after the Monetary Policy Meeting. Such a change will cut home loan floating interest rates by 0.25 per cent. Amid such a scenario, a person in the income tax bracket and having a home loan can save a substantial amount every year. As per a recent study by a leading fintech firm, a person with Rs 25 lakh annual income and Rs 50 lakh home loan can save approximately Rs 1.38 lakh/year after both announcements. Here, in a detailed study, see how much yearly and monthly amounts a year taxpayers in different tax slabs and with different amounts of home loans can save.
Photos: Unsplash/Pexels/Pixabay
Existing New Regime Tax Slabs
| Existing tax regime | |
| Tax Slab for FY 2024-25 | Tax Rate |
| Up to Rs 3 lakh | NIL |
| Rs 3 lakh - Rs 7 lakh | 5% |
| Rs 7 lakh - Rs 10 lakh | 10% |
| Rs 10 lakh - Rs 12 lakh | 15% |
| Rs 12 lakh - Rs 15 lakh | 20% |
| Above Rs 15 lakh | 30% |
Revised New Tax Regime, Applicable from FY2526
| Proposed Tax Regime | |
| Income Tax Slabs | Tax Rate |
| Upto Rs. 4,00,000 | NIL |
| Rs. 4,00,001 - Rs. 8,00,000 | 5% |
| Rs. 8,00,001 - Rs. 12,00,000 | 10% |
| Rs. 12,00,001 - Rs. 16,00,000 | 15% |
| Rs. 16,00,001 - Rs. 20,00,000 | 20% |
| Rs. 20,00,001 - Rs. 24,00,000 | 25% |
| Above Rs. 24,00,000 | 30% |
Home Loan and Income Tax Conditions
The home loan assumed as 2x salary for 240 months at a 9 per cent with 12 EMIs paid, and the 13th EMI starts from April 2025 with a 25 BPS cut. The revised tax slab will also be applicable from April 1, 2025.
Savings on Rs 25 lakh income
In the existing new tax regime, the tax in this income slab is Rs 4,34,200. In the revised, it will be Rs 3,19,799. There will savings of Rs 1,14,401.
Adhil Shetty, Founder BankBazaar, says, "Assuming the rate kicks in from April 1 after 12 EMIs of this loan have been paid, we get per-lakh interest savings of Rs 3,002 from the rest of the year. On a loan of Rs 50 lakh, this implies savings of Rs 1.50 lakh for the second year of the loan.
"Someone earning a gross salary of Rs 25 lakh, the tax savings are likely to be Rs 1.14 lakh, and with a Rs 50 lakh home loan for 20 years with 19 years left, the interest savings as mentioned above are Rs 1.50 lakh. This gives us total savings of Rs 2.64 lakh for the year, or Rs 22,000 a month."
Savings on Rs 50 lakh home loan
For the same person with a Rs 50 lakh home loan, the interest amount for the home loan prior rate cut was Rs 4,37,416. After a 25 bps rate cut, the interest amount will be Rs 4,14,282. Savings from loan will be Rs 23,134/year. The cumulative amount saved through income tax and loan interest in a year will be Rs 1,37,535, which is equal to Rs 11,461.
Savings on Rs 30 lakh income
In the existing new tax regime, the tax in this income slab is Rs 5,90,200. In the revised, it will be Rs 4,75,799. There will savings of Rs 1,14,401.
Savings on Rs 60 lakh home loan
For the same person with a Rs 60 lakh home loan, the interest amount for the home loan prior rate cut was Rs 5,24,900. After a 25 bps rate cut, the interest amount will be Rs 4,97,139. Savings from loan will be Rs 27,761/year. The cumulative amount saved through income tax and loan interest in a year will be Rs 1,42,162, which is equal to Rs 11,847.
Shetty says, "If you have a 20-year home loan at a rate of 8.75% and had paid 12 EMIs by March, with a rate cut of 25 bps kicking in from April, your interest savings will improve by Rs 8,417 per lakh. For example, on a loan of Rs 50 lakh, you’ll save Rs 4.20 lakh at this rate, with 10 EMIs being shaved off the loan tenure, all other parameters remaining constant.
Savings on Rs 35 lakh income
In the existing new tax regime, the tax in this income slab is Rs 7,64,200. In the revised, it will be Rs 6,31,799. There will savings of Rs 1,14,401.
Savings on Rs 70 lakh home loan
For the same person with a Rs 70 lakh home loan, the interest amount for the home loan prior rate cut was Rs 6,12,383. After a 25 bps rate cut, the interest amount will be Rs 5,79,995. Savings from loan will be Rs 32,388/year. The cumulative amount saved through income tax and loan interest in a year will be Rs 1,46,789, which is equal to Rs 12,232.
Amount saving on Rs 40 lakh income
In the existing new tax regime, the tax in this income slab is Rs 9,02,200. In the revised, it will be Rs 7,87,799. There will savings of Rs 1,14,401.
Savings on Rs 80 lakh home loan
For the same person with a Rs 80 lakh home loan, the interest amount for the home loan prior rate cut was 6,99,866. After a 25 bps rate cut, the interest amount will be Rs 6,62,852. Savings from loan will be Rs 37,015/year. The cumulative amount saved through income tax and loan interest in a year will be Rs 1,51,416, which is equal to Rs 12,618.
Savings on Rs 45 lakh income
In the existing new tax regime, the tax in this income slab is Rs 10,58,200. In the revised, it will be Rs 9,43,799. There will savings of Rs 1,14,401.
Savings on Rs 90 lakh home loan
For the same person with a Rs 90 lakh home loan, the interest amount for the home loan prior rate cut was 7,87,350. After a 25 bps rate cut, the interest amount will be Rs 7,45,708. Savings from loan will be Rs 41,642/year. The cumulative amount saved through income tax and loan interest in a year will be Rs 1,51,043, which is equal to Rs 13,004.
Savings on Rs 50 lakh income
In the existing new tax regime, the tax in this income slab is Rs 12,14,200. In the revised, it will be Rs 10,99,799. There will savings of Rs 1,14,401.
Savings on Rs 1 crore home loan
For the same person with a Rs 1 crore home loan, the interest amount for the home loan prior rate cut was 8,74,833. After a 25 bps rate cut, the interest amount will be Rs 8,28,564. Savings from loan will be Rs 46,268/year. The cumulative amount saved through income tax and loan interest in a year will be Rs 1,60,699, which is equal to Rs 13,389.
Calculation chart
| 2025 Bonanza - Income Tax Savings + Home Loan Interest Savings | ||||||||||
| Gross Salary | Tax Savings In FY25-26 Over Last Year's Tax On Same Income | Home Loan Interest Savings* In FY25-26 | Net Savings | |||||||
| Taxes Last Year | Taxes This Year | Savings | Home Loan (2x Salary) | Interest For FY25-26 Without Rate Cut | Principal Left After 1 Year | Interest For FY25-26 With 25 BPS Cut | Interest Savings In FY25-26 | Tax Savings + Interest Savings For FY25-26 | Monthly Savings | |
| ₹ 25,00,000 | ₹ 4,34,200 | ₹ 3,19,799 | ₹ 1,14,401 | ₹ 50,00,000 | ₹ 4,37,416 | ₹ 49,06,364 | ₹ 4,14,282 | ₹ 23,134 | ₹ 1,37,535 | ₹ 11,461 |
| ₹ 30,00,000 | ₹ 5,90,200 | ₹ 4,75,799 | ₹ 1,14,401 | ₹ 60,00,000 | ₹ 5,24,900 | ₹ 58,87,637 | ₹ 4,97,139 | ₹ 27,761 | ₹ 1,42,162 | ₹ 11,847 |
| ₹ 35,00,000 | ₹ 7,46,200 | ₹ 6,31,799 | ₹ 1,14,401 | ₹ 70,00,000 | ₹ 6,12,383 | ₹ 68,68,910 | ₹ 5,79,995 | ₹ 32,388 | ₹ 1,46,789 | ₹ 12,232 |
| ₹ 40,00,000 | ₹ 9,02,200 | ₹ 7,87,799 | ₹ 1,14,401 | ₹ 80,00,000 | ₹ 6,99,866 | ₹ 78,50,183 | ₹ 6,62,852 | ₹ 37,015 | ₹ 1,51,416 | ₹ 12,618 |
| ₹ 45,00,000 | ₹ 10,58,200 | ₹ 9,43,799 | ₹ 1,14,401 | ₹ 90,00,000 | ₹ 7,87,350 | ₹ 88,31,456 | ₹ 7,45,708 | ₹ 41,642 | ₹ 1,56,043 | ₹ 13,004 |
| ₹ 50,00,000 | ₹ 12,14,200 | ₹ 10,99,799 | ₹ 1,14,401 | ₹ 1,00,00,000 | ₹ 8,74,833 | ₹ 98,12,729 | ₹ 8,28,564 | ₹ 46,268 | ₹ 1,60,669 | ₹ 13,389 |
| Loan assumed as 2x salary for 240 months at 9% with 12 EMIs paid, and the 13th EMI starts from April 2025 with a 25 BPS cut. |