Income Tax Slabs in India for FY 2026-27, Explained Simply
New vs old regime slabs, rebates, and worked examples for salaried taxpayers.
For FY 2026-27, income tax slabs are unchanged from FY 2025-26. Under the New Tax Regime, income up to ₹4 lakh is tax-free, and a ₹60,000 Section 87A rebate makes taxable income up to ₹12 lakh effectively zero tax. Salaried individuals get a ₹75,000 standard deduction, pushing the tax-free gross salary ceiling to ₹12.75 lakh.
New Tax Regime slabs for FY 2026-27
The New Tax Regime is the default: nil up to ₹4 lakh, 5% from ₹4–8 lakh, 10% from ₹8–12 lakh, 15% from ₹12–16 lakh, 20% from ₹16–20 lakh, 25% from ₹20–24 lakh, and 30% above ₹24 lakh. It allows minimal deductions but includes a ₹75,000 standard deduction for salaried individuals and pensioners.
Old Tax Regime slabs and who should consider it
The Old Regime keeps a ₹2.5 lakh basic exemption (₹3 lakh for senior citizens, ₹5 lakh for super seniors) with slabs at 5%, 20%, and 30%. It supports 70+ deductions including 80C, 80D, HRA, and home loan interest. It often suits taxpayers with large deduction claims above roughly ₹4–4.5 lakh.
Surcharge, cess, and a ₹15 lakh salary example
Both regimes add surcharge above ₹50 lakh income and 4% Health & Education Cess on tax plus surcharge. On a ₹15 lakh gross salary under the New Regime: after the ₹75,000 standard deduction, tax before cess is about ₹93,750, or roughly ₹97,500 including cess.
Choosing between regimes each year
Non-business taxpayers can switch regimes annually while filing. Business income taxpayers need Form 10-IEA to exit the New Regime and can re-enter only once in a lifetime. The reliable approach is to compute both regimes with your actual numbers before filing.
Frequently Asked Questions
Yes, for resident individuals under the New Tax Regime. Section 87A rebate of up to ₹60,000 offsets tax on taxable income up to ₹12 lakh. With the ₹75,000 standard deduction, that extends to a gross salary of ₹12.75 lakh.
No. Slabs, exemption limits, standard deduction, and the Section 87A rebate carry over unchanged from FY 2025-26.
Yes, if you have no business or professional income. Business taxpayers face additional Form 10-IEA requirements and a once-in-a-lifetime restriction on re-entering the New Regime.
No. Higher senior-citizen exemptions apply only under the Old Regime.
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This article is written and reviewed by practicing Chartered Accountants of DSS Corp Advisory in Chennai. Information is aligned with the latest Finance Act notifications.