Income Tax Slabs FY 2026-27 (Tax Year): New vs Old Regime Rates
The 2025 Act did not change slab rates — those arrive through the annual Finance Act. The new regime now lives in Section 202 (formerly 115BAC) and is the default. You must opt out to use the old regime.
New Regime Slabs (Section 202) — DEFAULT
Standard deduction ₹75,000 (salaried) • Rebate up to ₹12L income = ZERO tax (Sec 87A → Sec 156) • Surcharge capped at 25% (vs 37% in old) • 4% Health & Education Cess on all
| Step | Amount |
|---|---|
| Gross Salary | ₹15,00,000 |
| − Standard Deduction | ₹75,000 |
| Taxable Income | ₹14,25,000 |
| ₹0–4L @ Nil | ₹0 |
| ₹4–8L @ 5% | ₹20,000 |
| ₹8–12L @ 10% | ₹40,000 |
| ₹12–14.25L @ 15% | ₹33,750 |
| Tax (no rebate — above 12L) | ₹93,750 |
| + 4% Cess | ₹3,750 |
| Total Tax | ₹97,500 |
Old Regime Slabs (you must opt in)
| Income Range | Below 60 | 60–79 yrs | 80+ yrs |
|---|---|---|---|
| Exemption limit | ₹2.5 L | ₹3 L | ₹5 L |
| Next slab (5%) | 2.5–5 L | 3–5 L | — |
| 20% slab | 5–10 L | 5–10 L | 5–10 L |
| 30% slab | 10 L + | 10 L + | 10 L + |
| Standard deduction | ₹50,000 | ₹50,000 | ₹50,000 |
| Rebate (87A→156) | up to ₹5L (max ₹12,500) | up to ₹5L | up to ₹5L |
The old regime allows deductions: Sec 123 (80C) ₹1.5L, Sec 124 (80D) health insurance, HRA exemption, home-loan interest ₹2L (self-occupied), NPS 80CCD(1B) ₹50k, etc.
• ₹2.5–5L @ 5% = ₹12,500
• ₹5–10L @ 20% = ₹1,00,000
• ₹10–14.5L @ 30% = ₹1,35,000
• Total = ₹2,47,500 + 4% cess = ₹2,57,400
Verdict (without deductions): New regime ₹97,500 vs Old ₹2,57,400 → the new regime saves ₹1,59,900!
Even with ₹1.5L (80C/123) + ₹50k NPS + ₹2L home-loan interest + ₹25k (80D/124), old-regime tax ≈ ₹1,63,800 — the new regime still wins. At ₹15L income, breakeven needs roughly ₹5.5 lakh of deductions. Test your own numbers →
Rules for Switching Regimes
- Salaried (no business income): you may switch every year — simply choose while filing your ITR
- Business income: once you leave the new regime, you can return only once — choose carefully
- If you do nothing, the New Regime applies automatically (it's the default)
- Tell your employer your chosen regime for TDS — otherwise TDS is cut assuming the new regime
By TaxSetu Editorial Team · Last reviewed: 7 October 2026
Based on the Income-tax Act 2025, Income Tax Rules 2026 and CBDT notifications; sections per the Income-tax Act 1961 (as amended) with 2025-Act mappings where notified · Verify on the official portal: incometax.gov.in