Income tax slabs for FY 2025-26 (AY 2026-27)
Every financial year, the government sets income ranges, called slabs, and taxes each range at a different rate. For FY 2025-26 (the year that started April 1, 2025 and ends March 31, 2026, filed as AY 2026-27), the new tax regime got a significant update that makes it the better default choice for most people. Here's what changed and how to read the slabs.
Before you read
This is an educational guide to help you understand the slab structure, not tax advice. Rates and rebates can be revised in future budgets, always confirm current figures on incometax.gov.in before filing.
India currently runs two parallel tax systems: the new regime and the old regime. The new regime has lower rates and a higher exemption limit, but you give up most deductions (like 80C investments or HRA). The old regime has higher rates but lets you claim a long list of deductions and exemptions. You choose one each year when you file, and salaried individuals can switch between them year to year.
New tax regime slabs, FY 2025-26 (the default regime)
- 1
Up to Rs 4,00,000: no tax
- 2
Rs 4,00,001 to Rs 8,00,000: 5%
- 3
Rs 8,00,001 to Rs 12,00,000: 10%
- 4
Rs 12,00,001 to Rs 16,00,000: 15%
- 5
Rs 16,00,001 to Rs 20,00,000: 20%
- 6
Rs 20,00,001 to Rs 24,00,000: 25%
- 7
Above Rs 24,00,000: 30%
The big change for FY 2025-26 is the rebate under Section 87A. If your total taxable income under the new regime is up to Rs 12,00,000, a rebate brings your tax payable down to zero. This isn't the same as the exemption limit, it means income is taxed slab by slab as shown above, but then a rebate wipes out the tax if your total taxable income doesn't cross Rs 12 lakh. For salaried individuals, a standard deduction of Rs 75,000 is applied before this calculation, so take-home salary up to roughly Rs 12.75 lakh can end up with zero tax payable.
Zero tax doesn't mean don't file
Even if the rebate brings your tax to zero, you still need to file a return if your income crosses the basic filing threshold. Read our guide on who should file a Nil ITR for the specifics.
Old tax regime slabs, FY 2025-26 (unchanged, still available)
- 1
Up to Rs 2,50,000: no tax
- 2
Rs 2,50,001 to Rs 5,00,000: 5%
- 3
Rs 5,00,001 to Rs 10,00,000: 20%
- 4
Above Rs 10,00,000: 30%
- 5
Rebate under Section 87A still applies if taxable income is up to Rs 5,00,000, bringing tax to zero
The old regime is where deductions live: Section 80C (up to Rs 1.5 lakh for PF, ELSS, life insurance, home loan principal), 80D (health insurance premiums), HRA exemption if you pay rent, and home loan interest under Section 24. If you have significant deductions to claim, the old regime can sometimes still work out cheaper, even with higher slab rates. It usually comes down to doing the math both ways.
Quick way to decide which regime fits you
0/4Quick check
Under the new regime for FY 2025-26, what happens to a salaried person's tax if their taxable income is exactly Rs 12,00,000?
Common questions
Key takeaways
FY 2025-26 (AY 2026-27) new regime slabs run from 0% up to Rs 4 lakh to 30% above Rs 24 lakh
A Section 87A rebate zeroes out tax for taxable income up to Rs 12,00,000 under the new regime
Salaried employees get a Rs 75,000 standard deduction under the new regime, pushing effective zero-tax salary higher
The old regime still exists with its 2.5 lakh exemption limit, for those with large deductions to claim
You can usually compare both regimes when filing and pick whichever results in lower tax, unless you have business income
Read next
What is Form 16?
Form 16 is the document your employer gives you every year as proof that tax was deducted from your salary. Here's everything it contains and why it matters.
Who should file a Nil ITR?
A Nil ITR is a tax return you file even when you owe zero tax. Here's who actually needs to file one, and why skipping it can cost you later.
Which ITR should you file?
There are seven ITR forms and picking the wrong one can get your return rejected. Here's a simple way to figure out which one applies to you.
Educational content only. Nothing here is tax advice. Always verify with a CA or the official Income Tax portal at incometax.gov.in.