Income tax is a direct tax on your annual income. For FY 2025-26 (AY 2026-27) the new tax regime is the default, with slab rates from nil to 30%. Because of the enhanced Section 87A rebate, a resident with taxable income up to Rs 12 lakh pays zero tax under the new regime, and salaried taxpayers also get a Rs 75,000 standard deduction. The old regime (with 80C, 80D, HRA etc.) remains optional. Most individuals file ITR-1 or ITR-2 by 31 July 2026.
Income earned in FY 2025-26 (1 Apr 2025 to 31 Mar 2026) is assessed in AY 2026-27 and its return is filed by 31 July 2026 for non-audit cases. Figures below follow the rates applicable to this year; always confirm the latest position at the official portal before filing.
Income Tax Slabs FY 2025-26 (New Regime)
These are the default income-tax slabs under the new regime for AY 2026-27. Rates apply to income after the Rs 75,000 standard deduction (for salaried and pensioners).
| Taxable income (new regime) | Rate |
|---|---|
| Up to Rs 4,00,000 | Nil |
| Rs 4,00,001 – Rs 8,00,000 | 5% |
| Rs 8,00,001 – Rs 12,00,000 | 10% |
| Rs 12,00,001 – Rs 16,00,000 | 15% |
| Rs 16,00,001 – Rs 20,00,000 | 20% |
| Rs 20,00,001 – Rs 24,00,000 | 25% |
| Above Rs 24,00,000 | 30% |
Section 87A rebate makes tax nil for resident individuals with taxable income up to Rs 12 lakh under the new regime, so 5% and 10% effectively wash out at those levels. Plus 4% health & education cess; surcharge on higher incomes.
The full rebate applies up to Rs 12 lakh taxable income (Rs 12.75 lakh gross salary after standard deduction). Just above Rs 12 lakh, marginal relief limits the tax to roughly the amount by which income exceeds Rs 12 lakh — so a small overshoot does not trigger a large jump. Run your exact numbers in an income tax calculator.
Old vs New Tax Regime
The new regime is the default and gives lower slab rates but disallows most deductions. The old regime keeps higher rates but lets you claim Section 80C, 80D, HRA and home-loan interest. See our full old vs new regime comparison.
Old regime — deductions allowed
- 80C (Rs 1.5L), 80D, 80CCD(1B) available
- HRA, LTA & home-loan interest u/s 24(b)
- Standard deduction Rs 50,000 (salaried)
- Basic exemption Rs 2.5 lakh
- Best when total deductions are high
New regime (default) — lower rates
- Most deductions not available
- Only 80CCD(2) employer NPS & 80JJAA allowed
- Standard deduction Rs 75,000 (salaried)
- Nil tax up to Rs 12L taxable (87A rebate)
- Simpler — best with few deductions
If your deductions (80C + 80D + HRA + home-loan interest) are large, the old regime can still win. If they are modest, the new regime's lower rates, Rs 75,000 standard deduction and the Rs 12 lakh nil-tax band usually save more. Compare both for your numbers before you file.
Not sure which regime saves you more?
Compare with an expert →Key Deductions & Exemptions
Most deductions apply only if you opt for the old regime. The main ones individuals use:
| Section | What it covers | Limit | New regime? |
|---|---|---|---|
| 80C | PPF, ELSS, EPF, LIC, home-loan principal, tuition | Rs 1.5 lakh | No |
| 80CCD(1B) | Extra NPS (own) contribution | Rs 50,000 | No |
| 80D | Health-insurance premium (self / parents) | Rs 25,000 / 50,000 | No |
| 24(b) | Home-loan interest (self-occupied) | Rs 2 lakh | No |
| Std. deduction | Salary / pension | Rs 75k new · Rs 50k old | Yes |
| 80CCD(2) | Employer NPS contribution | 10% / 14% of salary | Yes |
Only the standard deduction, employer-NPS (80CCD(2)) and 80JJAA carry into the new regime; the rest need the old regime.
Who Must File & Which ITR Form
You must file an ITR if your gross total income exceeds the basic exemption limit, or in specified high-value cases (large deposits, foreign assets/income, high electricity or foreign-travel spend), or to claim a refund. Pick the right form:
| ITR form | Who files it |
|---|---|
| ITR-1 (Sahaj) | Resident salary / one house / other income up to Rs 50 lakh |
| ITR-2 | Capital gains, more than one house, foreign income — no business income |
| ITR-3 | Individuals / HUF with business or professional income |
| ITR-4 (Sugam) | Presumptive business income u/s 44AD / 44ADA / 44AE |
Due dates: 31 July 2026 for non-audit ITR-1 / ITR-2 filers, 31 August 2026 for non-audit ITR-3 / ITR-4 filers (business and professional income), 31 October 2026 for audit cases and 30 November 2026 for transfer-pricing. A belated return attracts a fee up to Rs 5,000 (Rs 1,000 if income is below Rs 5 lakh).
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