Income Tax Slabs FY 2025-26 (AY 2026-27): New & Old Regime Rates
This guide covers every income tax slab rate for FY 2025-26 (Assessment Year 2026-27) under both the new and old regimes, the Section 87A rebate, marginal relief, surcharge, and a step-by-step tax calculation example.
New regime slab rates (FY 2025-26)
The new tax regime introduced in Budget 2025 and retained in Budget 2026 features the following progressive slabs:
| Income Range | Tax Rate | Tax on slab |
|---|---|---|
| Up to ₹4,00,000 | Nil | ₹0 |
| ₹4,00,001 – ₹8,00,000 | 5% | ₹20,000 |
| ₹8,00,001 – ₹12,00,000 | 10% | ₹40,000 |
| ₹12,00,001 – ₹16,00,000 | 15% | ₹60,000 |
| ₹16,00,001 – ₹20,00,000 | 20% | ₹80,000 |
| ₹20,00,001 – ₹24,00,000 | 25% | ₹1,00,000 |
| Above ₹24,00,000 | 30% | — |
Even though income between ₹4L and ₹12L attracts tax at 5% and 10%, the Section 87A rebate of ₹60,000 completely offsets this. If your net taxable income is ₹12 lakh or below, your total income tax is zero under the new regime. Salaried individuals earning up to ₹12.75 lakh gross also pay zero tax after the ₹75,000 standard deduction.
Old regime slab rates (FY 2025-26)
| Income Range | Below 60 yrs | Senior Citizen (60–80) | Super Senior (80+) |
|---|---|---|---|
| Up to ₹2.5 lakh | Nil | Nil | Nil |
| ₹2.5L – ₹3L | 5% | Nil | Nil |
| ₹3L – ₹5L | 5% | 5% | Nil |
| ₹5L – ₹10L | 20% | 20% | 20% |
| Above ₹10L | 30% | 30% | 30% |
Old regime 87A rebate: ₹12,500 for income up to ₹5 lakh.
Surcharge rates
| Income Range | Surcharge Rate |
|---|---|
| ₹50L to ₹1 crore | 10% |
| ₹1 crore to ₹2 crore | 15% |
| ₹2 crore to ₹5 crore | 25% (capped at 25% under new regime) |
| Above ₹5 crore | 25% (new regime) / 37% (old regime) |
Health and Education Cess: 4% on (tax + surcharge) for all taxpayers.
Marginal relief explained
Marginal relief prevents a sharp jump in tax when income crosses a threshold. For example, if your income is ₹12.1 lakh (just above the ₹12L zero-tax limit), the additional tax you pay cannot exceed the additional income of ₹10,000. This ensures that earning slightly more does not result in a disproportionately higher tax bill.
Step-by-step calculation example
Example: Rahul is a salaried employee with gross salary of ₹14,00,000. He opts for the new tax regime for FY 2025-26.
| Step | Amount |
|---|---|
| Gross Salary | ₹14,00,000 |
| Less: Standard Deduction (Sec 16) | –₹75,000 |
| Net Taxable Salary Income | ₹13,25,000 |
| Tax on first ₹12,00,000 | ₹60,000 (normal slabs) |
| Tax on ₹1,25,000 at 15% | ₹18,750 |
| Total tax before rebate | ₹78,750 |
| Section 87A rebate (income > ₹12L) | Nil |
| 4% Health & Education Cess | ₹3,150 |
| Total Tax Payable | ₹81,900 |
Use our free income tax calculator to compute your exact liability — just enter your income, HRA, and investment details.
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Under the new tax regime for FY 2025-26, a taxpayer with income of exactly ₹12 lakh pays zero income tax. Although the slabs would normally produce a tax of ₹60,000 (5% on ₹4L–8L and 10% on ₹8L–12L), the Section 87A rebate of ₹60,000 fully offsets this. The net tax payable is ₹0.
For a salaried individual with ₹15 lakh gross income under the new regime: subtract ₹75,000 standard deduction to get ₹14.25 lakh taxable income. Tax: nil on ₹4L, ₹20,000 on next ₹4L, ₹40,000 on next ₹4L, ₹33,750 on remaining ₹2.25L = ₹93,750 + 4% cess = approximately ₹97,500 total tax payable.
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