In short: for tax year 2026-27 (the year from 1 April 2026 to 31 March 2027), the new tax regime is the default. Income up to ₹12 lakh is effectively tax-free because of the rebate, which means ₹12.75 lakh for salaried employees once the ₹75,000 standard deduction is added. Budget 2026 did not change the slabs, so they are the same as for 2025-26.
This page gives the current slabs under both regimes, worked examples, what changed under the new Income-tax Act, 2025, and the older slabs for anyone checking a past year. Figures are as of September 2026.
These apply to individuals of any age under the new regime, which applies unless you choose the old regime.
| Taxable income | Tax rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
| Who | No tax up to (new regime) |
|---|---|
| Salaried employee or pensioner | ₹12,75,000 gross salary (₹12 lakh + ₹75,000 standard deduction) |
| Other individuals (business, profession, other income) | ₹12,00,000 taxable income |
Under the old regime the limit is much lower: rebate applies up to ₹5 lakh of taxable income.
Taxable income is ₹12,75,000 − ₹75,000 = ₹12,00,000. Tax on the slabs is ₹20,000 (5% of ₹4 lakh) + ₹40,000 (10% of ₹4 lakh) = ₹60,000. The rebate of ₹60,000 cancels it. Tax payable: nil.
Taxable income is ₹12,10,000. Tax on the slabs would be ₹60,000 + ₹1,500 (15% of ₹10,000) = ₹61,500. Because income is only ₹10,000 above ₹12 lakh, marginal relief limits the tax to ₹10,000. Add 4% cess: ₹10,400.
Taxable income is ₹17,25,000.
Tax ₹1,45,000 + 4% cess ₹5,800 = ₹1,50,800 for the year, or about ₹12,567 a month deducted as TDS.
To check your own numbers, including the old regime, use our free income tax calculator for 2026-27.
You can still choose the old regime, which keeps deductions such as 80C (up to ₹1.5 lakh), 80D, HRA, LTA and home-loan interest. Its slabs have not changed for several years.
| Taxable income | Below 60 | 60 to 79 | 80 and above |
|---|---|---|---|
| Up to ₹2,50,000 | Nil | Nil | Nil |
| ₹2,50,001 – ₹3,00,000 | 5% | Nil | Nil |
| ₹3,00,001 – ₹5,00,000 | 5% | 5% | Nil |
| ₹5,00,001 – ₹10,00,000 | 20% | 20% | 20% |
| Above ₹10,00,000 | 30% | 30% | 30% |
For most salaried employees, the new regime now gives lower tax, because its slabs are wider and the rebate covers income up to ₹12 lakh. The old regime can still work out cheaper if you claim large deductions, typically a combination of full 80C, HRA on high rent, home-loan interest and 80D. The only reliable way to decide is to calculate both with your actual figures; the calculator does this side by side.
Salaried employees choose a regime with their employer at the start of the year for TDS purposes, and can switch when filing their return. People with business income can switch back to the old regime only once.
| Total income | Surcharge (new regime) | Surcharge (old regime) |
|---|---|---|
| ₹50 lakh – ₹1 crore | 10% | 10% |
| ₹1 crore – ₹2 crore | 15% | 15% |
| ₹2 crore – ₹5 crore | 25% | 25% |
| Above ₹5 crore | 25% | 37% |
Marginal relief also applies at each surcharge threshold.
The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. The slabs above carried over unchanged, but some names changed:
Employers must estimate each employee’s tax for the year under the regime the employee chose, and deduct it evenly from monthly salary. Deposit TDS by the 7th of the following month (30 April for March), file the quarterly return on Form 138, and give employees Form 130 by 15 June after the year ends. Payroll software such as HivePayroll’s TDS management does the monthly calculation, collects investment declarations and produces the returns; it is free for up to 10 employees.
| New regime | FY 2023-24 | FY 2024-25 | FY 2025-26 and 2026-27 |
|---|---|---|---|
| Nil | up to ₹3 lakh | up to ₹3 lakh | up to ₹4 lakh |
| 5% | ₹3–6 lakh | ₹3–7 lakh | ₹4–8 lakh |
| 10% | ₹6–9 lakh | ₹7–10 lakh | ₹8–12 lakh |
| 15% | ₹9–12 lakh | ₹10–12 lakh | ₹12–16 lakh |
| 20% | ₹12–15 lakh | ₹12–15 lakh | ₹16–20 lakh |
| 25% | – | – | ₹20–24 lakh |
| 30% | above ₹15 lakh | above ₹15 lakh | above ₹24 lakh |
| Standard deduction | ₹50,000 | ₹75,000 | ₹75,000 |
| Rebate: no tax up to | ₹7 lakh | ₹7 lakh | ₹12 lakh |
Under the new regime, no tax is payable on taxable income up to ₹12 lakh because of the rebate, or up to ₹12.75 lakh of salary after the ₹75,000 standard deduction. The basic exemption limit itself is ₹4 lakh.
No. The slabs, standard deduction and rebate for 2026-27 are the same as for 2025-26.
No. It is the default, but individuals can choose the old regime. Salaried employees inform their employer for TDS and can change their choice when filing the return.
Under the new regime, taxable income is ₹14,25,000. Tax is ₹20,000 + ₹40,000 + ₹33,750 (15% of ₹2,25,000) = ₹93,750, plus 4% cess of ₹3,750, so ₹97,500 for the year.
For 2025-26, yes, as Form 16. From tax year 2026-27, the same certificate is called Form 130.
This page reflects the Income-tax Act, 2025 and Budget 2026 as of 26 September 2026. It is general information, not tax advice; for complex cases, consult a chartered accountant.
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