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.
Tax at common salaries
Salaried resident below 60. Old regime column assumes no deductions other than the ₹50,000 standard deduction.
| Salary | New regime | Old regime |
|---|---|---|
| ₹7 lakh | ₹0 | ₹44,200 |
| ₹8 lakh | ₹0 | ₹65,000 |
| ₹10 lakh | ₹0 | ₹1,06,600 |
| ₹12 lakh | ₹0 | ₹1,63,800 |
| ₹12.75 lakh | ₹0 | ₹1,87,200 |
| ₹13 lakh | ₹26,000 | ₹1,95,000 |
| ₹15 lakh | ₹97,500 | ₹2,57,400 |
| ₹18 lakh | ₹1,50,800 | ₹3,51,000 |
| ₹20 lakh | ₹1,92,400 | ₹4,13,400 |
| ₹25 lakh | ₹3,19,800 | ₹5,69,400 |
| ₹30 lakh | ₹4,75,800 | ₹7,25,400 |
Work out your own tax, with deductions, in the income tax calculator, or see the break-even table for when the old regime wins.
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.