Income Tax Slab 2025-26 — New & Old Regime Rates, Zero Tax up to ₹12 Lakh
Updated: 3 June 2026 | FY 2025-26 / AY 2026-27 | Budget 2025 | Income-tax Act, 2025
For FY 2025-26 (AY 2026-27), the new regime tax slabs are: ₹0–4L: 0%, ₹4–8L: 5%, ₹8–12L: 10%, ₹12–16L: 15%, ₹16–20L: 20%, ₹20–24L: 25%, above ₹24L: 30%. Section 87A rebate: ₹25,000 (effective zero tax up to ₹12L). Standard deduction ₹75,000 for salaried. Old regime slabs unchanged. New regime is the default — opt for old regime only if deductions exceed ~₹3.75L.
₹12 Lakh
Effective zero tax income in new regime — after ₹25,000 Section 87A rebate (Budget 2025).
Salaried: ₹12.75L gross − ₹75K std deduction = ₹12L → 87A rebate → zero tax. No investment needed.
Salaried: ₹12.75L gross − ₹75K std deduction = ₹12L → 87A rebate → zero tax. No investment needed.
New Regime Slabs — FY 2025-26
| Income Range | Tax Rate | Tax on Slab | Cumulative Tax |
|---|---|---|---|
| ₹0 – ₹4,00,000 | 0% | ₹0 | ₹0 |
| ₹4,00,001 – ₹8,00,000 | 5% | ₹20,000 | ₹20,000 |
| ₹8,00,001 – ₹12,00,000 | 10% | ₹40,000 | ₹60,000 |
| ₹12,00,001 – ₹16,00,000 | 15% | ₹60,000 | ₹1,20,000 |
| ₹16,00,001 – ₹20,00,000 | 20% | ₹80,000 | ₹2,00,000 |
| ₹20,00,001 – ₹24,00,000 | 25% | ₹1,00,000 | ₹3,00,000 |
| Above ₹24,00,000 | 30% | — | — |
Add 4% Health & Education Cess on total tax. Surcharge applies above ₹50L. 87A rebate of ₹25,000 reduces tax to zero for income ≤ ₹12L.
Old Regime Slabs — FY 2025-26 (Unchanged)
| Income Range | Tax Rate |
|---|---|
| ₹0 – ₹2,50,000 | 0% |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Old regime: Standard deduction ₹50,000. 87A rebate ₹12,500 if income ≤ ₹5L. Allows deductions: 80C (₹1.5L), 80D, HRA, home loan interest (₹2L), 80CCD(1B) NPS (₹50K), etc.
New vs Old Regime — Quick Decision Table
| Income | New Regime Tax | Old Regime Tax (typical deductions ₹3.75L) | Recommended |
|---|---|---|---|
| ₹8,00,000 | ₹0 (87A) | ₹0 (87A, after deductions) | New (simpler) |
| ₹12,00,000 | ₹0 (87A) | ₹44,200 (after ₹3.75L deductions) | New |
| ₹15,00,000 | ₹1,09,200 | ₹78,000 (after ₹3.75L deductions) | Old (if deductions ≥ ₹3.75L) |
| ₹20,00,000 | ₹2,08,000 | ₹1,60,000 (after ₹5L deductions) | Old (if deductions ≥ ₹5L) |
| ₹30,00,000 | ₹5,20,000 | ₹5,72,400 (after ₹3.75L deductions) | New |
Frequently Asked Questions
What are the income tax slabs for FY 2025-26 under the new regime?
New regime tax slabs for FY 2025-26 (AY 2026-27): ₹0–4 lakh: 0%, ₹4–8 lakh: 5%, ₹8–12 lakh: 10%, ₹12–16 lakh: 15%, ₹16–20 lakh: 20%, ₹20–24 lakh: 25%, above ₹24 lakh: 30%. Standard deduction: ₹75,000. Section 87A rebate: ₹25,000 (income ≤ ₹12 lakh → zero tax). New regime is default from FY 2025-26.
What are the income tax slabs for FY 2025-26 under the old regime?
Old regime tax slabs for FY 2025-26: ₹0–2.5 lakh: 0%, ₹2.5–5 lakh: 5%, ₹5–10 lakh: 20%, above ₹10 lakh: 30%. Standard deduction ₹50,000. Section 87A rebate ₹12,500 if income ≤ ₹5 lakh. Old regime allows deductions: 80C (₹1.5L), 80D (health insurance), HRA, home loan interest (₹2L), 80CCD(1B) NPS (₹50K extra), 80G, etc.
What is the tax-free income limit for FY 2025-26?
New regime: Income up to ₹12 lakh is effectively tax-free after Section 87A rebate of ₹25,000. For salaried employees: gross salary ₹12.75 lakh minus ₹75K standard deduction = ₹12L net taxable → zero tax. Old regime: Income up to ₹5 lakh is tax-free (₹12,500 rebate under Section 87A). Note: These exemption limits do NOT apply to special rate incomes like STCG (equity), LTCG (equity), and lottery winnings.
Should I choose old or new tax regime for FY 2025-26?
New regime is better if your total deductions are below ₹3.75 lakh (approximate break-even for most income levels). If you have: HRA of ₹1.5L+ AND 80C ₹1.5L AND 80D ₹25K AND home loan interest ₹2L = total ₹5.25L → old regime may be better. For those with no deductions or low deductions, new regime is significantly more beneficial after Budget 2025 changes. Use TaxClue's Old vs New Regime Calculator to compare.
What is the surcharge on income tax for FY 2025-26?
Surcharge for FY 2025-26 (new regime cap at 25%): Income ₹50L–₹1Cr: 10% surcharge; ₹1Cr–₹2Cr: 15%; ₹2Cr–₹5Cr: 25% (new regime); >₹5Cr: 25% (new regime, capped). Old regime: >₹5Cr attracts 37% surcharge (not capped). Plus 4% Health & Education Cess on (tax + surcharge) for all categories. Marginal relief available when surcharge creates tax > income increase.
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