Income Tax Slabs in India – FY 2025-26 (AY 2026-27) Complete Guide

Last updated: July 2026. This guide covers the slabs for FY 2025-26 (AY 2026-27) – the rates that apply to income tax returns being filed in 2026.

Income Tax Slabs for FY 2025-26 (AY 2026-27) – Complete Guide

Understanding the applicable income tax slabs is the first step in calculating your tax liability. For FY 2025-26, taxpayers can choose between the new regime (the default) and the old regime. Budget 2025 substantially rewrote the new regime: the nil slab moved up to Rs 4 lakh and the Section 87A rebate now makes taxable income up to Rs 12 lakh tax-free. Union Budget 2026 left these slabs unchanged, so the same structure also continues for FY 2026-27.

New Tax Regime Slabs – FY 2025-26

The new tax regime under Section 115BAC is the default regime. You need to specifically opt out if you prefer the old regime.

Key features of the new regime:

• Standard deduction of Rs 75,000 for salaried individuals and pensioners
• Rebate under Section 87A of up to Rs 60,000 – taxable income up to Rs 12 lakh pays zero tax (up to Rs 12.75 lakh gross for salaried taxpayers after the standard deduction)
• Marginal relief for taxable income slightly above Rs 12 lakh (up to roughly Rs 12.70 lakh)
• The 87A rebate does not apply to income taxed at special rates (e.g., equity LTCG under Section 112A)
• No deductions under Chapter VI-A (except employer NPS contribution under 80CCD(2)) and no HRA/LTA exemptions

Old Tax Regime Slabs – FY 2025-26

The old regime slabs are unchanged. Standard deduction is Rs 50,000, and the full set of deductions (80C, 80D, HRA, home loan interest, etc.) remains available.

For Individuals Below 60 Years and HUFs

For Senior Citizens (60-80 Years)

For Super Senior Citizens (Above 80 Years)

Surcharge Rates

Surcharge applies on the tax amount (not on income) when total income exceeds specified thresholds:

Under the new regime, the maximum surcharge is capped at 25% regardless of income level.

Health and Education Cess

A cess of 4% is levied on the total tax amount (including surcharge) under both regimes, for all taxpayers.

Tax Calculation Example – New Regime

For a salaried individual with gross income of Rs 10,00,000 in FY 2025-26:

• Gross Income: Rs 10,00,000
• Less: Standard Deduction: Rs 75,000
• Taxable Income: Rs 9,25,000
• Tax before rebate: Rs 20,000 (5% on Rs 4L-8L) + Rs 12,500 (10% on Rs 8L-9.25L) = Rs 32,500
• Section 87A rebate: Rs 32,500 (taxable income is under Rs 12 lakh)
• Total Tax: Rs 0

For a higher earner with gross income of Rs 18,00,000:

• Taxable Income: Rs 17,25,000 (after Rs 75,000 standard deduction)
• Tax: Rs 20,000 + Rs 40,000 + Rs 60,000 (15% on Rs 12L-16L) + Rs 25,000 (20% on Rs 16L-17.25L) = Rs 1,45,000
• Cess (4%): Rs 5,800
• Total Tax: Rs 1,50,800

Tax Calculation Example – Old Regime

For the Rs 10,00,000 earner with Section 80C (Rs 1.5L) and 80D (Rs 25,000) deductions:

• Gross Income: Rs 10,00,000
• Less: Standard Deduction: Rs 50,000
• Less: 80C + 80D: Rs 1,75,000
• Taxable Income: Rs 7,75,000
• Tax: Rs 12,500 (5% on Rs 2.5L-5L) + Rs 55,000 (20% on Rs 5L-7.75L) = Rs 67,500
• Cess: Rs 2,700
• Total Tax: Rs 70,200

In this scenario the new regime saves Rs 70,200 – the taxpayer pays nothing at all. See our detailed old vs new regime comparison for break-even analysis.

Rebate Under Section 87A

Under the new regime, if your taxable income is up to Rs 12 lakh, you get a rebate equal to the tax payable, capped at Rs 60,000 – making your tax nil. Marginal relief protects income slightly above Rs 12 lakh. Under the old regime, the rebate is unchanged: up to Rs 12,500 for taxable income up to Rs 5 lakh.

Previous Year Reference: FY 2024-25 (AY 2025-26) New Regime Slabs

If you are filing a belated or updated return for an earlier year, note that FY 2024-25 used different new-regime slabs: nil up to Rs 3 lakh, 5% up to Rs 7 lakh, 10% up to Rs 10 lakh, 15% up to Rs 12 lakh, 20% up to Rs 15 lakh, and 30% above – with the 87A rebate zeroing tax only up to Rs 7 lakh. Missed that year entirely? You can still file it via an updated return – see our ITR-U 48-month rule guide.

Calculate Your Exact Tax with FileWithUs.ai

FileWithUs.ai provides an instant tax calculator that shows your liability under both regimes, handling the Rs 12 lakh rebate, marginal relief, surcharge, and cess automatically. Enter your income and deductions to see exactly which regime saves you more before you file.