Income Tax Slabs FY 2025-26 & FY 2026-27 (New Regime and Old Regime Rates)
Income tax slabs are ranges of income set by the Act, each taxed at a different rate. India follows a progressive taxation system, wherein the tax rate increases with a rise in income. While the tax slabs under the old regime offer many deductions, the new tax regime offers relaxed tax slabs with limited deductions.
What are Income Tax Slabs?
Income Tax Slabs are income ranges determined by the Income Tax Act, taxed under different rates. Individuals can choose between the old and the new tax regime, and the option can be exercised at the time of filing ITR.
Under the new regime, the basic exemption limit is ₹4 lakh, with the highest tax rate of 30%. Under the old regime, the basic exemption limit is ₹2.5 lakhs, with a maximum tax rate of 30%. Slabs under the old regime are relaxed to ₹3 lakh and ₹5 lakh for resident senior and super senior citizens, respectively.
New Tax Regime Slabs For FY 2025-26 (AY 2026-27)
The new regime is the default tax regime for FY 2025-26 (AY 2026-27). The following are the tax slabs and rates under the new regime.
| New Tax Regime Slabs | New Tax Regime Rates |
| Up to Rs. 4 lakh | Nil |
| Rs. 4 lakh to Rs. 8 lakh | 5% |
| Rs. 8 lakh to Rs. 12 lakh | 10% |
| Rs. 12 lakh to Rs. 16 lakh | 15% |
| Rs. 16 lakh to Rs. 20 lakh | 20% |
| Rs. 20 lakh to Rs. 24 lakh | 25% |
| Above Rs. 24 lakh | 30% |
Key Features of the New Regime:
- Most of the Chapter VI-A deductions are not available under the new regime.
- Standard deduction of ₹75,000 available under the new regime.
- Income up to ₹12 lakh is effectively tax-free due to the rebate under section 87A.
Old Tax Regime Slabs FY 2025-26 (AY 2026-27)
| Income Tax Slabs | Income Tax Rate |
| Up to Rs. 2.5 lakh | Nil |
| Rs. 2.5 lakh to Rs. 5 lakh | 0.05 |
| Rs. 5 lakh to Rs. 10 lakh | 0.2 |
| Above Rs. 10 lakh | 0.3 |
Key Features of the Old Regime:
- Standard deduction of ₹50,000 available under the old regime.
- Income up to ₹5 lakhs can be effectively tax-free under the old regime due to the rebate.
- Various tax-saving deduction options are available
Rebate Under Section 87A
- The new tax regime offers a rebate of ₹60,000, effectively making the tax liability zero for an income up to ₹12 lakhs.
- This is not allowed on income chargeable at special rates, like capital gains, income from betting, lottery, gambling and sale of crypto assets
- However, the rebate under the old tax regime is up to ₹12,500, effectively resulting in zero tax liability for income up to ₹5 lakhs.
Marginal Relief on Rebate
When the income under the new tax regime slightly exceeds the ₹12 lakh limit and is thereby subject to tax, marginal relief on rebate ensures that the increase in income does not result in disproportionate tax liability.
Illustration:
Particulars | Amount |
| Taxable income | Rs. 12,10,000 |
| Rebate limit (tax free income) | Rs. 12,00,000 |
| Income exceeding limit | Rs. 10,000 |
| Tax as per slab rates (on Rs. 12,10,000) | Rs. 61,500 |
| Tax payable after marginal relief | Rs. 10,400 |
In this example, although the calculated tax is higher, marginal relief restricts the tax payable to ₹10,000, which is equal to the additional income above ₹12 lakh.
Standard Deduction
While a standard deduction of ₹75,000 is allowed against salary under the new regime, the limit under the old regime is fixed at ₹50,000. Under both the regimes, standard deduction is available against salary unconditionally.
How to Pay Zero Tax Using Standard Deduction and Tax Rebate?
The following illustration shows the instance in which the tax liability can be made zero using standard deduction and rebate under the new regime. Mr X earns a salary income of ₹12.75 lakh in FY 2025-26 and opts for the new tax regime. After the standard deduction of ₹75,000, his taxable income will be ₹12 lakh. Here’s how the Section 87A rebate works:
| Slab | Amount | Tax |
| Up to ₹4 lakh | ₹4 lakh @ 0% | Nil |
| ₹4 lakh to ₹8 lakh | ₹4 lakh @ 5% | 20000 |
| ₹8 lakh to ₹12 lakh | ₹4 lakh @ 10% | 40000 |
| Total Tax Before Rebate | 60000 | |
| Rebate u/s 87A | -60000 | |
| Net Tax Liability | 0 | |
Surcharge & Cess Rates
When your income crosses specified thresholds, you are liable to pay surcharge, which is calculated at a certain percentage of the income tax. Also, when your total income results in a tax liability, cess should be paid at 4% in all cases. The following table shows the surcharge levy at different rates.
| Income Limit | New Tax Regime | Old Tax Regime |
| Up to Rs. 50 lakh | Nil | Nil |
| Rs. 50 lakh to Rs. 1 Crore | 10% | 10% |
| Rs. 1 Crore to Rs. 2 Crore | 15% | 15% |
| Rs. 2 Crore to Rs. 5 Crore | 25% | 25% |
| Above Rs. 5 Crore | 25% | 37% |
Income Tax Slabs - Budget 2026 Updates
There are no significant changes made in the income tax slabs announced in budget 2026. Therefore, the slab rates for FY 2026-27 remain the same.
Income Tax Slabs for Senior and Super Senior Citizens
1. Income Tax Slabs For Senior Citizens (Aged 60 to 80)
| Income Tax Slabs | Income Tax Rate |
| Up to Rs. 3 lakh | Nil |
| Rs. 3 lakh to Rs. 5 lakh | 5% |
| Rs. 5 lakh to Rs. 10 lakh | 20% |
| Above Rs. 10 lakh | 30% |
2. Income Tax Slabs For Super Senior Citizens (Aged 80+ years)
| Income Tax Slabs | Income Tax Rate |
| Up to Rs. 5 lakh | Nil |
| Rs. 5 lakh to Rs. 10 lakh | 20% |
| Above Rs. 10 lakh | 30% |
Income Tax Calculator For FY 2025-26 (AY 2026-27)
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Old v/s New Tax Regime - The Most Beneficial Regime for FY 2025-26
While the most beneficial regime highly depends on your income and deduction levels, it can be perceived that the old regime suits the taxpayers who have numerous tax deductions and have done elaborate tax planning in advance; the new regime suits the taxpayers who do not have significant deductions to claim. The following table shows the major differences between the old and new regimes
| Feature | Old Tax Regime | New Tax Regime |
| Default Regime | No | Yes |
| Basic Exemption Limit | Rs. 2.5 lakh | Rs. 4 lakh |
| Rebate u/s 87A | Rs. 12,500 (income up to Rs. 5 lakh) | Rs. 60,000 (income up to Rs. 12 lakh) |
| Standard Deduction | Rs. 50,000 | Rs. 75,000 |
| Section 80C Deductions | Allowed | Not Allowed |
| HRA Exemption | Allowed | Not Allowed |
| Home loan interest (Self-occupied) | Allowed | Not Allowed |
| NPS Deduction | Fully Allowed | Only Employer Contribution |
| Set-off of House property losses | Allowed | Not Allowed |
| Section 80D Deduction | Allowed | Not Allowed |
Tax Payable for Different Salary Levels
The following comparison shows how much tax you pay under the new vs old tax regime at different income levels and the potential savings available.
| Taxable Income | Tax (New Tax Regime) | Tax (Old Tax Regime) | Savings |
| Rs. 8 lakh | Nil (Rebate 87A) | Rs. 75,400 | Rs. 75,400 |
| Rs. 10 lakh | Nil (Rebate 87A) | Rs. 1,17,000 | Rs. 1,17,000 |
| Rs. 12 lakh | Nil (Rebate 87A) | Rs. 1,79,400 | Rs. 1,79,400 |
| Rs. 13 lakh | Rs. 78,000 | Rs. 2,10,600 | Rs. 1,32,600 |
| Rs. 15 lakh | Rs. 1,09,200 | Rs. 2,73,000 | Rs. 1,63,800 |
| Rs. 20 lakh | Rs. 2,08,000 | Rs. 4,29,000 | Rs. 2,21,000 |
| Rs. 25 lakh | Rs. 3,43,200 | Rs. 5,85,000 | Rs. 2,41,800 |
| Rs. 30 lakh | Rs. 4,99,200 | Rs. 7,41,000 | Rs. 2,41,800 |
How to Calculate Income Tax For FY 2025-26?
The following steps can be undertaken to calculate the tax liability for FY 2025-26.
- Calculate your Gross Total Income by adding income from salary, house property, business or profession, capital gains, and other sources.
- Subtract eligible deductions and exemptions based on the tax regime you have chosen.
- Compute your taxable income after reducing the applicable deductions.
- Apply the relevant income tax slab rates to calculate your tax liability under the chosen regime.
- Claim the applicable tax rebate, if you are eligible.
- Add 4% Health and Education Cess (and surcharge, if applicable) to arrive at your total tax liability.
- Adjust TDS, TCS, and advance tax already paid to determine whether you have additional tax to pay or are eligible for a refund.
Income Tax Calculation Example
Example 1
Mr Raj has a salary income of Rs. 15 lakhs. His taxable income and tax liability for FY 2025-26 (AY 2026-27) will be computed as follows under the new tax regime to save taxes:
| Particulars | Amount |
| Income From Salary | 1500000 |
| (-) Standard Deduction | -75000 |
| Taxable Income for FY 2025-26 (AY 2026-27) | 1425000 |
The tax liability of Mr. Raj will be calculated as follows:
| Income Tax Slabs | Tax Liability | |
| Up to Rs. 4 lakh | Rs. 4 lakh @ 0% | - |
| Rs. 4 lakh to Rs. 8 lakh | Rs. 4 lakh @ 5% | 20,000 |
| Rs. 8 lakh to Rs. 12 lakh | Rs. 4 lakh @ 10% | 40,000 |
| Rs. 12 lakh to Rs. 14.25 lakh | Rs. 2.25 lakh @ 15% | 33,750 |
| Total | 93,750 | |
| Add: Health & Education Cess @ 4% | 3,750 | |
| Total Tax Liability (New Tax Regime) | 97,500 | |
Therefore, the tax liability of Mr. Raj for FY 2025-26 (AY 2026-27) under the new tax regime is ₹97,500.
Example 2
Mr. Anban for FY 2025-26 has the following incomes, exemptions and deductions.
Salary - ₹25 lakh
HRA Exemption ₹4 lakh
80C Deduction - ₹1.5 lakh
80D Deduction - ₹25,000
His taxable income and tax liability for FY 2025-26 (AY 2026-27) will be computed as follows:
| Particulars | New Tax Regime | Old Tax Regime |
| Income From Salary | 25,00,000 | 25,00,000 |
| (-) Standard Deduction | (75,000) | (50,000) |
| (-) HRA Exemption | (4,00,000) | |
| 24,25,000 | 20,40,000 | |
| Less: Other deductions | ||
| (-) Section 80C | (1,50,000) | |
| (-) Section 80D | (25,000) | |
| Taxable Income | 24,25,000 | 18,75,000 |
Mr. Anban's Tax Liability will be calculated as follows:
1. Under New Tax Regime
| Income Tax Slabs | Tax Liability | |
| Up to Rs. 4 lakh | Rs. 4 lakh @ 0% | - |
| Rs. 4 lakh to Rs. 8 lakh | Rs. 4 lakh @ 5% | 20,000 |
| Rs. 8 lakh to Rs. 12 lakh | Rs. 4 lakh @ 10% | 40,000 |
| Rs. 12 lakh to Rs. 16 lakh | Rs. 4 lakh @ 15% | 60,000 |
| Rs. 16 lakh to Rs. 20 lakh | Rs. 4 lakh @ 20% | 80,000 |
| Rs. 20 lakh to Rs. 24 lakh | Rs. 4 lakh @ 25% | 1,00,000 |
| Rs. 24 lakh to Rs. 24.25 lakh | Rs. 25,000 @ 30% | 7,500 |
| Total | 3,07,500 | |
| Add: Health & Education Cess @ 4% | 12,300 | |
| Total Tax Liability (New Tax Regime) | 3,19,800 |
2. Under Old Tax Regime
| Income Tax Slabs | Tax Liability | |
| Up to Rs. 2.5 lakh | Rs. 2.5 lakh @ 0% | - |
| Rs. 2.5 lakh to Rs. 5 lakh | Rs. 2.5 lakh @ 5% | 12,500 |
| Rs. 5 lakh to Rs. 10 lakh | Rs. 5 lakh @ 20% | 1,00,000 |
| Above Rs. 10 lakh | Rs. 8.75 lakh @ 30% | 2,62,500 |
| Total | 3,75,000 | |
| Add: Health & Education Cess @ 4% | 15,000 | |
| Total Tax Liability (Old Tax Regime) | 3,90,000 |
Therefore, tax liability of Mr. Anban for FY 2025-26 (AY 2026-27) is as follows:
| Tax Regime | Tax Liability |
| New Tax Regime | 3,19,800 |
| Old Tax Regime | 3,90,000 |
Income Tax Slabs Comparison for FY 2023-24, FY 2024-25 & FY 2025-26
| Income Tax Slab | FY 2023-24 | FY 2024-25 | FY 2025-26 |
| Up to Rs. 3 lakh | Nil | Nil | Nil |
| Rs. 3 lakh to Rs. 4 lakh | 5% | 5% | Nil |
| Rs. 4 lakh to Rs. 6 lakh | 5% | 5% | 5% |
| Rs. 6 lakh to Rs. 7 lakh | 10% | 5% | 5% |
| Rs. 7 lakh to Rs. 8 lakh | 10% | 10% | 5% |
| Rs. 8 lakh to Rs. 9 lakh | 10% | 10% | 10% |
| Rs. 9 lakh to Rs. 10 lakh | 15% | 10% | 10% |
| Rs. 10 lakh to Rs. 12 lakh | 15% | 15% | 10% |
| Rs. 12 lakh to Rs. 15 lakh | 20% | 15% | 15% |
| Rs. 15 lakh to Rs. 16 lakh | 30% | 20% | 15% |
| Rs. 16 lakh to Rs. 20 lakh | 30% | 20% | 20% |
| Rs. 20 lakh to Rs. 24 lakh | 30% | 30% | 25% |
| Above Rs. 24 lakh | 30% | 30% | 30% |
Special Income Tax Rates
Not all the income is chargeable under the applicable slab rates. There are incomes specified under the Income Tax Act, which need to be charged under the special rates, tabulated below.
| Income Type | Tax Rate |
| Short-term Capital Gains (Section 111A) | 20% |
| Long-term Capital Gains | 13% |
| Lottery or Game show winnings | 30% |
| Crypto or Virtual Digital Assets | 30% |
Income Tax Slabs for Women, NRIs, and HUFs
1. Income Tax Slabs for Women
There are no differences between the tax slabs for women and men. Under the Indian Income Tax Act, assessees are taxed at par, irrespective of gender.
2. Income Tax Slabs for NRIs
While there are no differences in taxation of NRIs under the new tax regime, the beneficial tax slabs available for resident senior citizens and super senior citizens under the old regime are not available for NRI assessees.
3. Income Tax Slabs for HUF
The default tax regime, basic exemption limit, and other provisions are often similar for individuals and HUF. Though the determination of residential status differs between individuals and HUF, the taxability, deduction eligibility, and other provisions remain similar in most cases.
How to File ITR for FY 2025-26?
After gathering all the necessary documents, it is necessary to choose the right ITR form depending on the income levels, assessee’s legal status, and other criteria. Filing the returns within the applicable due date can avoid late fees, penalties, delay in refund processing, and other adverse consequences.
