Income tax slabs for FY 2025-26 (AY 2026-27)

Under the new regime, income up to Rs 4,00,000 is nil; Rs 4-8 lakh is taxed at 5%; Rs 8-12 lakh at 10%; Rs 12-16 lakh at 15%; Rs 16-20 lakh at 20%; Rs 20-24 lakh at 25%; and income above Rs 24,00,000 at 30%. A 4% health and education cess applies on the tax.

The 87A rebate makes tax nil for total income up to Rs 12,00,000 in the new regime — a rebate of up to Rs 60,000. With the Rs 75,000 standard deduction for salaried people on top, a salary up to about Rs 12,75,000 can come to zero tax.

Under the old regime, income up to Rs 2,50,000 is nil; Rs 2.5-5 lakh is taxed at 5%; Rs 5-10 lakh at 20%; and income above Rs 10,00,000 at 30%, plus 4% cess. The basic exemption is higher for seniors — Rs 3,00,000 for those 60-80, and Rs 5,00,000 for those above 80.

In the old regime the 87A rebate makes tax nil only up to Rs 5,00,000 of total income (up to Rs 12,500), and the standard deduction is Rs 50,000. The new regime's higher Rs 75,000 standard deduction and Rs 12,00,000 rebate ceiling are a large part of why it suits most people.

On top of the slab tax and cess, a surcharge applies once total income crosses defined high-income thresholds, stepping up at each level. Most taxpayers aren't affected, but high earners should factor the surcharge in when comparing regimes and planning.