Tax slabs for Tax Year 2026-27
From 1 April 2026 the Income-tax Act, 2025 replaced the 1961 Act, and “previous year / assessment year” became a single tax year. Budget 2026 kept the slabs unchanged. The new regime is the default; you can choose the old regime when you file (salaried people can switch every year).
| Income | New regime |
|---|---|
| Up to ₹4 lakh | Nil |
| ₹4–8 lakh | 5% |
| ₹8–12 lakh | 10% |
| ₹12–16 lakh | 15% |
| ₹16–20 lakh | 20% |
| ₹20–24 lakh | 25% |
| Above ₹24 lakh | 30% |
| Income | Old regime, below 60 | 60 to 79 | 80 and above |
|---|---|---|---|
| Up to ₹2.5 lakh | Nil | Nil | Nil |
| ₹2.5–3 lakh | 5% | Nil | Nil |
| ₹3–5 lakh | 5% | 5% | Nil |
| ₹5–10 lakh | 20% | 20% | 20% |
| Above ₹10 lakh | 30% | 30% | 30% |
What each regime allows
| Item | New regime | Old regime |
|---|---|---|
| Standard deduction (salary/pension) | ₹75,000 | ₹50,000 |
| Rebate | Up to ₹60,000 if income ≤ ₹12 lakh | Up to ₹12,500 if income ≤ ₹5 lakh |
| 80C, 80D, HRA, home loan interest, LTA | No | Yes |
| Employer’s NPS contribution | Up to 14% of basic | Up to 10% of basic |
| Top surcharge | 25% | 37% |
So a salaried person earning up to ₹12,75,000 pays no tax in the new regime: ₹75,000 standard deduction brings taxable income to ₹12 lakh, and the rebate cancels the tax. Just above that, marginal relief ensures your tax is never more than the income above ₹12 lakh.
How to choose
The old regime wins only when your deductions are large: typically a home loan, full 80C, health insurance for parents and HRA in a big city. The calculator works out exactly how much more deduction you would need for the old regime to win. Note that the rebate does not apply to special-rate income such as capital gains on shares, which this calculator does not include.
Surcharge and cess
Above ₹50 lakh of income a surcharge of 10% of tax applies, 15% above ₹1 crore and 25% above ₹2 crore (old regime: 37% above ₹5 crore), with marginal relief at each step. A 4% health and education cess is added on top of tax and surcharge.
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Questions people ask
Is income up to ₹12 lakh tax-free?
In the new regime, yes: the rebate covers tax on taxable income up to ₹12 lakh. For salaried people that means a salary up to ₹12.75 lakh, after the ₹75,000 standard deduction. Special-rate income like capital gains is not covered by the rebate.
Can I switch between old and new regime?
Salaried people and pensioners can choose every year when filing the return. If you have business income, you can switch back to the old regime only once.
Is HRA allowed in the new regime?
No. HRA exemption, 80C, 80D and home loan interest on a self-occupied house are allowed only in the old regime.
What is Tax Year 2026-27?
Under the Income-tax Act, 2025, income earned from 1 April 2026 to 31 March 2027 belongs to Tax Year 2026-27. Earlier it would have been called FY 2026-27 / AY 2027-28. The return is filed in 2027.