New tax regime slabs, FY 2025-26 (AY 2026-27)
The new regime got a serious makeover in Budget 2025. The zero-tax band now stretches to ₹4 lakh, the slabs are wider, and the rebate does the heavy lifting up to ₹12 lakh. Here is exactly how your income is taxed.
| Income slab | Tax rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Even though the slab shows tax in that band, the Section 87A rebate wipes it out entirely for anyone with taxable income up to ₹12 lakh. You only start actually paying once you cross that line.
Old tax regime slabs, FY 2025-26
The old regime kept its familiar structure. What makes it worthwhile is everything you can subtract before these rates apply — 80C, HRA, home loan interest and more.
| Income slab (below 60) | Tax rate |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Higher exemption for senior citizens
Age still matters under the old regime. The point at which tax kicks in rises with it:
- Below 60: basic exemption of ₹2,50,000.
- 60 to 80 (senior citizen): ₹3,00,000.
- Above 80 (super senior): ₹5,00,000.
The new regime, by contrast, uses the same ₹4,00,000 exemption for everyone regardless of age.
How your tax is calculated, step by step
Whichever regime you're on, the income tax department follows the same sequence. Understanding it makes the final number far less mysterious.
- Add up gross income from salary, house property, capital gains, business and other sources.
- Subtract the standard deduction — ₹75,000 new, ₹50,000 old — and, on the old regime, your other deductions.
- Apply the slab rates to the taxable income that's left.
- Apply the Section 87A rebate if you qualify, which can bring the tax to zero.
- Add surcharge if your income is high, then 4% cess on the total.
Rather than do this by hand, drop your salary into the income tax calculator — it runs every step above and shows the breakdown line by line.
Tax at a glance for common salaries (new regime)
To give you a feel for the numbers, here's the approximate tax a salaried person pays under the new regime, after the ₹75,000 standard deduction and rebate.
| Gross salary | Approx. tax (new regime) |
|---|---|
| ₹8,00,000 | ₹0 |
| ₹12,00,000 | ₹0 |
| ₹13,00,000 | ~₹26,000 |
| ₹16,00,000 | ~₹1,13,000 |
| ₹20,00,000 | ~₹1,92,000 |
| ₹25,00,000 | ~₹3,20,000 |
These are estimates for illustration. Your exact figure depends on your deductions and other income — check it on the calculator.
Related reading
Frequently asked questions
What is the basic exemption limit in the new regime for FY 2025-26?
Under the new regime, income up to 4,00,000 is completely tax-free for everyone, regardless of age. On top of that, the Section 87A rebate makes tax zero for taxable income up to 12,00,000.
Are the tax slabs different for senior citizens?
Only under the old regime, where the basic exemption is 3,00,000 for those aged 60 to 80 and 5,00,000 for those above 80. The new regime uses the same 4,00,000 exemption for all ages.
How much is the surcharge on high incomes?
Surcharge is 10% above 50 lakh, 15% above 1 crore and 25% above 2 crore. The new regime caps surcharge at 25%. A 4% health and education cess applies on top in both regimes.