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Income Tax Slab Rate 2025-26
AY 2026–27 Updated
📊 Income Tax Slabs FY 2025–26:
📊 Income Tax Slabs FY 2025–26:
Complete Guide to New vs Old Tax Regime
Introduction
Income tax in India is designed in a structured way where individuals with higher earnings are required to pay tax at higher rates. This system is known as a progressive tax structure, ensuring fairness in taxation.
For the financial year 2025–26 (assessment year 2026–27), taxpayers have two distinct paths:
New Tax Regime
Lower tax rates but fewer deductions.
Old Tax Regime
Higher tax rates but multiple deductions and exemptions.
Although the Income Tax Act 2025 has come into force from 1st April 2025, the provisions of the 1961 Act continue to apply for AY 2026–27 as it relates to income earned up to 31st March 2026.
What are Income Tax Slabs?
Income tax slabs refer to predefined income ranges that determine the rate at which an individual’s income is taxed. Instead of applying one flat rate to the entire income, different portions are taxed at different rates.
Lower income → lower tax
Higher income → higher tax
New Tax Regime Slabs (FY 2025–26)
Under the new tax regime, income up to ₹4,00,000 is completely tax-free. It is designed to be streamlined and simple.
| Income Range | 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% |
Standard Deduction
Salaried individuals get a deduction of ₹75,000.
Tax Rebate (Sec 87A)
Taxable income up to ₹12 lakh becomes Zero Tax.
Deductions Disallowed
80C (LIC/PPF), HRA, and LTA are not available here.
Old Tax Regime Slabs (FY 2025–26)
| Income Range | 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% |
Key Features of Old Regime
- Multiple Deductions: Claim 80C (₹1.5L), 80D (Medical), and Section 24 (Home Loan).
- Exemptions: HRA, LTA, and Education Loans are allowed.
- Best for: Individuals with heavy tax-saving investments.
New vs Old Tax Regime
| Feature | New Regime | Old Regime |
|---|---|---|
| Tax Rates | Lower | Higher |
| Deductions | Limited | Multiple |
| Simplicity | High | Moderate |
| Best For | Low investment | High investment |
Which Regime Should You Choose?
Choose New If:
- Fewer deductions available
- Prefer simple calculation
- Minimal investments
Choose Old If:
- Claiming 80C, 80D, etc.
- Have Home Loan interest
- Paying high House Rent
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