New Tax Regime Slabs FY 2026-27
The new tax regime is the default for FY 2026-27. It has lower slab rates but allows fewer deductions -- only the Rs. 75,000 standard deduction applies automatically.
| Income Slab | Tax Rate | Tax on Slab |
|---|---|---|
| Up to Rs. 4 Lakh | 0% | Nil |
| Rs. 4L to Rs. 8L | 5% | Up to Rs. 20,000 |
| Rs. 8L to Rs. 12L | 10% | Up to Rs. 40,000 |
| Rs. 12L to Rs. 16L | 15% | Up to Rs. 60,000 |
| Rs. 16L to Rs. 20L | 20% | Up to Rs. 80,000 |
| Rs. 20L to Rs. 24L | 25% | Up to Rs. 1,00,000 |
| Above Rs. 24L | 30% | 30% of amount above Rs. 24L |
Section 87A rebate eliminates tax entirely for taxable incomes up to Rs. 12 Lakh. After adding the Rs. 75,000 standard deduction, this means zero tax up to a gross income of Rs. 12.75 Lakh.
Old Tax Regime Slabs FY 2026-27
The old regime allows deductions under 80C, 80D, HRA, home loan interest, and NPS. It is better when your total deductions are large enough to reduce taxable income significantly.
| Income Slab | Tax Rate |
|---|---|
| Up to Rs. 2.5 Lakh | 0% |
| Rs. 2.5L to Rs. 5L | 5% |
| Rs. 5L to Rs. 10L | 20% |
| Above Rs. 10L | 30% |
87A rebate of Rs. 12,500 applies if taxable income is below Rs. 5 Lakh under the old regime.
New vs Old Regime: When to Switch
| Situation | Better Choice |
|---|---|
| Income below Rs. 12.75L, no major deductions | New Regime (zero tax) |
| Income Rs. 12.75L to Rs. 15L, minimal investments | New Regime |
| Income Rs. 15L+ with 80C maxed, HRA claimed, home loan | Old Regime likely better |
| Income above Rs. 25L with full deductions | Compare both -- depends on deduction total |