For FY 2025-26 (AY 2026-27) the new tax regime is the default: income is nil up to Rs 4 lakh, then taxed in 5%–30% bands. Because the Section 87A rebate was raised to Rs 60,000, anyone with taxable income up to Rs 12 lakh pays zero tax — Rs 12.75 lakh for salaried people after the Rs 75,000 standard deduction. The old regime (basic exemption Rs 2.5 lakh, 5%/20%/30% slabs, with deductions like 80C and HRA) is still available if you opt in.
New Regime Income Tax Slabs FY 2025-26
The new regime under the simplified tax law is the default — you do not have to opt in. The same slabs apply to all individuals regardless of age (no separate senior-citizen slabs). Use our income tax calculator to see your exact liability.
| Taxable Income | Tax 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% |
Standard deduction Rs 75,000 for salaried/pensioners. Add applicable surcharge and 4% health & education cess on top.
The Section 87A rebate for the new regime was increased so that a resident individual with taxable income up to Rs 12 lakh gets the full computed tax rebated — effective tax nil. For salaried taxpayers the Rs 75,000 standard deduction lifts the zero-tax salary to about Rs 12.75 lakh. The rebate is not available in the old regime beyond Rs 5 lakh, and marginal relief smooths the jump just above Rs 12 lakh.
Old Regime Income Tax Slabs FY 2025-26
The old regime keeps a Rs 2.5 lakh basic exemption and rewards deductions — Section 80C, 80D, HRA and home-loan interest. It has age-based exemption limits for senior citizens. You must actively choose it when filing (salaried taxpayers should intimate their employer for TDS).
| Taxable Income | Below 60 | 60–80 (senior) | 80+ (super senior) |
|---|---|---|---|
| Up to Rs 2,50,000 | Nil | Nil | Nil |
| Rs 2,50,001 – Rs 3,00,000 | 5% | Nil | Nil |
| Rs 3,00,001 – Rs 5,00,000 | 5% | 5% | Nil |
| Rs 5,00,001 – Rs 10,00,000 | 20% | 20% | 20% |
| Above Rs 10,00,000 | 30% | 30% | 30% |
Basic exemption Rs 3,00,000 for age 60–80 and Rs 5,00,000 for 80+. Standard deduction Rs 50,000 (salaried); 87A rebate up to Rs 5 lakh income.
New regime (default)
- Nil up to Rs 4 lakh, then 5–30%
- Rs 12 lakh income tax-free via 87A
- Standard deduction Rs 75,000
- Almost no other deductions (80C, HRA, 80D disallowed)
- Simpler — best with few deductions
Old regime (opt-in)
- Nil up to Rs 2.5 lakh, then 5/20/30%
- 87A rebate only up to Rs 5 lakh income
- Standard deduction Rs 50,000
- Full 80C, 80D, HRA, 24(b) home-loan interest
- Best when deductions are high
Old or new — which one taxes you less? Get it compared properly.
Talk to a Tax Expert →Surcharge & Health & Education Cess
Above Rs 50 lakh a surcharge is added on the tax, and a 4% health & education cess applies to the tax-plus-surcharge in both regimes. The new regime caps the top surcharge at 25% (vs 37% in the old regime).
| Total Income | Surcharge (Old) | Surcharge (New) |
|---|---|---|
| Rs 50 lakh – Rs 1 crore | 10% | 10% |
| Rs 1 crore – Rs 2 crore | 15% | 15% |
| Rs 2 crore – Rs 5 crore | 25% | 25% |
| Above Rs 5 crore | 37% | 25% capped |
Marginal relief applies just above each threshold so the extra tax never exceeds the income over the limit.
Total tax = Income Tax + Surcharge + 4% Cess on (Income Tax + Surcharge).
New Regime Tax on Rs 16 Lakh Salary
A salaried person earning Rs 16 lakh gets the Rs 75,000 standard deduction, leaving Rs 15.25 lakh taxable. Tax is computed slab by slab (no 87A rebate above Rs 12 lakh):
New regime · Rs 16L salary
Nil-tax · Rs 12L income
The Rs 12 lakh nil-tax is a rebate, not an exemption band. Cross Rs 12 lakh taxable income and the rebate disappears, so tax is charged from the Rs 4 lakh slab onward. Marginal relief limits the shock for incomes just over Rs 12 lakh, but plan deductions and timing carefully near that line.
Want an exact, regime-optimised computation for your income?
Get ITR Filing Help →Which Regime Should You Choose?
New regime usually wins if
- Your total deductions are modest (under ~Rs 3.75 lakh)
- Taxable income is up to Rs 12 lakh (fully rebated)
- You have no HRA, home-loan interest or big 80C
- You want the simplest filing
Old regime can win if
- You claim large 80C + 80D + HRA + home-loan interest
- Deductions push you below the break-even point
- You are a senior citizen with tax-saving investments
- You want to keep long-standing exemptions
- Form 16 / salary breakup
- 80C proofs (PPF, ELSS, LIC, EPF)
- 80D health-insurance premium receipts
- HRA rent receipts / rent agreement
- Home-loan interest certificate (24b)
- Interest & capital-gains statements
- Old vs new comparison done
- Regime chosen before filing due date
If you have no business income you can switch between old and new every year. With business income the choice is more restricted — form 10-IEA is needed to opt for the old regime. Non-audit ITR for AY 2026-27 is generally due 31 July 2026.
Income Tax Slabs — Frequently Asked Questions
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