Tax slabs for tax year 2026-27
Budget 2026 kept the rates the same as last year. These apply to resident individuals.
| Taxable income | Rate |
|---|---|
| Up to ₹4 lakh | Nil |
| ₹4 – 8 lakh | 5% |
| ₹8 – 12 lakh | 10% |
| ₹12 – 16 lakh | 15% |
| ₹16 – 20 lakh | 20% |
| ₹20 – 24 lakh | 25% |
| Above ₹24 lakh | 30% |
| Taxable income | Rate |
|---|---|
| Up to ₹2.5 lakh | Nil |
| ₹2.5 – 5 lakh | 5% |
| ₹5 – 10 lakh | 20% |
| Above ₹10 lakh | 30% |
In the old regime, the nil band is ₹3 lakh for people aged 60 to 79, and ₹5 lakh for those 80 or older. The new regime has the same slabs for every age.
How the calculation works
Start with your gross income and subtract the deductions your regime allows to get taxable income. Apply the slab rates, subtract the rebate if you qualify, add surcharge if income is above ₹50 lakh, then add 4% health and education cess.
For a ₹15 lakh salary with ₹1,50,000 in 80C and ₹25,000 in health insurance, the new regime gives a tax of ₹97,500 and the old regime ₹2,02,800. The old regime would need about ₹5,44,000 of deductions in total to come out ahead.
Rebate and marginal relief
In the new regime, if your taxable income is up to ₹12 lakh, a rebate of up to ₹60,000 brings your tax to zero. Just above ₹12 lakh, marginal relief makes sure the tax is never more than the income above ₹12 lakh, so earning a little more never leaves you worse off. In the old regime, the rebate is up to ₹12,500 for taxable income up to ₹5 lakh.
Surcharge
Surcharge is added to the tax: 10% above ₹50 lakh, 15% above ₹1 crore, 25% above ₹2 crore, and in the old regime 37% above ₹5 crore (the new regime stops at 25%). Marginal relief applies at each step.
Questions people ask
Which regime is the default?
The new regime is the default. Salaried people can choose the old regime each year when filing their return (and should tell their employer for TDS). People with business income can switch back only once.
Is income up to ₹12 lakh really tax-free?
Under the new regime, the rebate cancels the tax when taxable income is up to ₹12 lakh. With the ₹75,000 standard deduction, that means a salary of up to ₹12.75 lakh. The rebate does not cover income taxed at special rates, such as equity capital gains.
Which deductions work in the new regime?
Only a few: the ₹75,000 standard deduction for salaried people and pensioners, and your employer’s contribution to NPS. 80C, 80D, HRA and home-loan interest on a self-occupied house are not allowed.
What changed with the Income-tax Act, 2025?
The new Act took effect on 1 April 2026 and uses "tax year" instead of "assessment year". Section numbers changed (the 87A rebate is now section 156), but Budget 2026 kept the tax rates and slabs the same.
Does this include capital gains?
No. This calculator taxes all income at slab rates. Capital gains on shares and mutual funds have their own rates, so check those separately.
Method and sources
Rates and limits from the Income-tax Act, 2025 as in force for tax year 2026-27, unchanged by the Finance Act 2026. Deductions are capped at their limits (80C ₹1.5 lakh, 80D ₹25,000 or ₹50,000 for seniors, 80CCD(1B) ₹50,000, home loan interest ₹2 lakh). The employer NPS amount is taken as entered; it is limited to 14% of basic salary in the new regime and 10% in the old. All income is taxed at slab rates. This is an estimate, not tax advice. How we calculate.
Last reviewed 22 Oct 2026 by the WealthFeedz team.