Income Tax Slabs FY 2025-26 (AY 2026-27): New and Old Regime Rates

What income tax slabs mean

Income tax slabs are the income ranges used to apply different tax rates. India follows a progressive system, so different parts of income can be taxed at different rates.

For AY 2026-27, the department guidance shows the default new regime and the optional old regime side by side. The new regime has broader slab bands and lower rates at many levels, while the old regime continues to allow the wider set of deductions and exemptions.

• New regime under section 115BAC is the default regime
• Old regime can still be chosen by eligible taxpayers
• Slab rates alone do not decide the final tax payable

New tax regime slabs for FY 2025-26

For individuals, the department portal shows the following slab structure under the default new regime for AY 2026-27:

• Up to Rs. 4,00,000: Nil
• Rs. 4,00,001 to Rs. 8,00,000: 5 percent
• Rs. 8,00,001 to Rs. 12,00,000: 10 percent
• Rs. 12,00,001 to Rs. 16,00,000: 15 percent
• Rs. 16,00,001 to Rs. 20,00,000: 20 percent
• Rs. 20,00,001 to Rs. 24,00,000: 25 percent
• Above Rs. 24,00,000: 30 percent

Old tax regime slabs for FY 2025-26

For individuals below 60 years of age, the portal shows the following slab structure under the old regime:

• Up to Rs. 2,50,000: Nil
• Rs. 2,50,001 to Rs. 5,00,000: 5 percent
• Rs. 5,00,001 to Rs. 10,00,000: 20 percent
• Above Rs. 10,00,000: 30 percent

Rebate under section 87A and standard deduction

Resident individuals are eligible for rebate under section 87A subject to the conditions shown in the department guidance. For AY 2026-27, the portal shows rebate up to Rs. 60,000 under the new regime where total income after eligible deductions does not exceed Rs. 12,00,000, and rebate up to Rs. 12,500 under the old regime where total income after eligible deductions does not exceed Rs. 5,00,000.

The department's deduction tables also show standard deduction under section 16(ia) at up to Rs. 75,000 in the new regime and up to Rs. 50,000 in the normal regime, subject to salary amount.

From these two rules taken together, a salaried taxpayer under the new regime may reach nil tax with salary up to Rs. 12.75 lakh if total income after the standard deduction comes down to Rs. 12 lakh and no special-rate income changes the result. That conclusion is a calculation from the published slab, rebate, and deduction rules.

Senior citizens, super senior citizens, and who gets a higher exemption limit

The higher basic exemption limits for senior citizens and super senior citizens are a feature of the old regime for resident individuals. The new regime slabs remain the same irrespective of age.

• Resident senior citizen aged 60 years or more but below 80 years in old regime: basic exemption up to Rs. 3,00,000
• Resident super senior citizen aged 80 years or more in old regime: basic exemption up to Rs. 5,00,000
• New regime: same slab structure irrespective of age
• Non-residents do not get the old-regime resident senior citizen relaxation

Surcharge, cess, and marginal relief

Health and education cess at 4 percent is payable on income tax plus surcharge, if any, in both regimes.

The department portal shows surcharge at 10 percent for income above Rs. 50 lakh up to Rs. 1 crore, 15 percent for income above Rs. 1 crore up to Rs. 2 crore, and 25 percent for income above Rs. 2 crore up to Rs. 5 crore in both regimes. Above Rs. 5 crore, surcharge is 25 percent in the new regime and 37 percent in the old regime.

Marginal relief is available around the surcharge thresholds so that the increase in tax plus surcharge does not exceed the income over the threshold by more than the permitted amount shown by the portal.

• 4 percent health and education cess applies in both regimes
• New regime surcharge above Rs. 5 crore: 25 percent
• Old regime surcharge above Rs. 5 crore: 37 percent
• For income under sections 111A, 112, 112A and dividend income, the enhanced 25 percent and 37 percent surcharge is not levied; the maximum surcharge on that tax is generally 15 percent, subject to the specific exceptions listed in the applicable tax-rate guidance

Some incomes are taxed at special rates

Normal slab rates do not apply to every type of income. The department's tax-rate tables separately list certain capital gains and other incomes that are taxed at special rates.

• Short-term capital gains under section 111A: 20 percent for the applicable transfers covered by the AY 2026-27 rate rules, subject to the section's conditions
• Long-term capital gains under section 112: 12.5 percent for transfers on or after 23 July 2024, subject to the specific law and exceptions
• Long-term capital gains under section 112A: 12.5 percent for transfers on or after 23 July 2024, subject to the threshold and conditions in that section
• Virtual digital assets under section 115BBH: 30 percent
• Lottery and similar winnings under section 115BB: 30 percent

How to estimate your tax correctly

A useful approach is to first compute income under each head, then apply the regime-specific deductions and exemptions, and only after that apply slab rates, rebate, surcharge, and cess.

• Start with gross total income
• Reduce allowed deductions and exemptions according to the regime chosen
• Compute taxable income
• Apply the slab rates or special rates, as relevant
• Apply rebate under section 87A if eligible
• Add surcharge and 4 percent cess
• Reduce prepaid taxes such as TDS, TCS, and advance tax to arrive at net payable or refund

How the Act connects slabs, rebate, and standard deduction

Section 115BAC contains the new-regime rate table. For AY 2026-27, the table starts with nil tax up to Rs. 4 lakh and then applies the successive rates shown above. These are slab rates: the higher rate applies only to the part of income that falls in that slab, not to the entire income.

Section 87A is a rebate, not a deduction. First compute tax under the applicable rules; then reduce that tax by the rebate when the resident-individual conditions are satisfied. Under the AY 2026-27 new-regime rules, the rebate can go up to Rs. 60,000 where total income does not exceed Rs. 12 lakh, subject to the statutory conditions and marginal-relief rules.

Section 16(ia) provides the standard deduction from salary. For AY 2026-27, the Act provides up to Rs. 75,000 where tax is computed under the new-regime provision, and up to Rs. 50,000 under the normal regime, subject to salary income. This is why a salary figure and taxable-income figure are not always the same.

The rebate does not automatically cover tax on every kind of income. Capital gains and other special-rate income must be checked separately, so a simple slab calculation may not produce the final tax payable.

• Slabs decide the tax rate for each income band.
• A rebate reduces tax after the tax calculation; it is not the same as a deduction.
• Standard deduction reduces salary income before taxable income is determined.
• Special-rate income can change the result even when normal slab income is within the rebate limit.