Income tax slabs for FY 2026-27
Budget 2026 kept the slab rates of both regimes unchanged. From 1 April 2026 the Income-tax Act, 2025 replaces the 1961 Act and uses the term "tax year", but the rates below still apply. The new regime is the default, so you must choose the old regime yourself when filing if it suits you better.
| New regime: income | Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
In the new regime, a rebate makes tax zero if your taxable income is up to ₹12 lakh. Salaried people also get a ₹75,000 standard deduction, so a salary of up to ₹12.75 lakh pays no tax.
| Old regime: income | Below 60 | 60–79 | 80+ |
|---|---|---|---|
| Up to ₹2,50,000 | Nil | Nil | Nil |
| ₹2,50,001 – ₹3,00,000 | 5% | Nil | Nil |
| ₹3,00,001 – ₹5,00,000 | 5% | 5% | Nil |
| ₹5,00,001 – ₹10,00,000 | 20% | 20% | 20% |
| Above ₹10,00,000 | 30% | 30% | 30% |
In the old regime, the rebate makes tax zero if taxable income is up to ₹5 lakh, and salaried people get a ₹50,000 standard deduction. In both regimes, 4% cess is added to the tax, and a surcharge applies on income above ₹50 lakh.
Worked example
Which regime should you choose?
- The new regime usually wins if you have few deductions, don't pay rent, or don't have a home loan.
- The old regime can win if you claim large deductions together: full 80C, health insurance, HRA and home loan interest. The calculator above shows how much you'd need to claim to break even.
- Salaried people can switch every year when filing the return. People with business income can switch back to the old regime only once.
Frequently asked questions
Is income up to ₹12 lakh really tax-free in the new regime?
Yes, for regular income such as salary and interest. The rebate removes the tax completely up to ₹12 lakh of taxable income. It does not cover income taxed at special rates, such as capital gains on shares.
What happens if my income is just above ₹12 lakh?
Marginal relief applies. Your tax cannot be more than the amount by which your income exceeds ₹12 lakh. For example, at ₹12,10,000 taxable income you pay at most ₹10,000 plus cess. The calculator applies this automatically.
Have the section numbers like 80C changed?
The Income-tax Act, 2025, in force from 1 April 2026, renumbers most sections. Section 80C, for example, becomes Section 123. The deductions and their limits stay the same, and most people still use the familiar names, which is why this page does too.
Which deductions can I claim in the new regime?
Only a few: the ₹75,000 standard deduction for salaried people, your employer's NPS contribution, and some specific allowances. Popular ones such as 80C, 80D, HRA and home loan interest on a self-occupied house are not allowed.
How do I tell my employer which regime I want?
Tell your employer at the start of the year so they deduct the right TDS from your salary. If you change your mind, you can still pick the other regime when you file your return, as long as you have no business income.