Home Taxes Income Tax Income Tax Slab For A Y 2026 27

Income Tax Slab For A Y 2026 27

January 16, 2026

Income Tax Slabs for Tax Year 2026‑27 (FY 2026‑27)

From 1 April 2026, income is taxed in the same year as earned (Tax Year concept replacing Assessment Year under the new Income‑tax Act, 2025). For practical purposes, slab structures for Tax Year 2026‑27 broadly follow the liberalised new regime pattern notified for FY 2025‑26, with the traditional old regime continuing alongside.

New Tax Regime – Slab Rates (Applicable to All Individuals & HUFs)

Under the new regime, a common slab structure applies to all individuals (resident and non‑resident) and HUFs, without separate higher basic exemption for senior citizens.

Slab Rates – New Regime (TY 2026‑27)

Total Income (₹)	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%

Key points:

The new regime is the default; the old regime is available only if specifically opted for in the prescribed manner.
Rebate under Section 87A is enhanced so that lower‑middle incomes remain effectively tax‑free up to the prescribed threshold (aligned to FY 2025‑26 policy, which shields income roughly around ₹12 lakh in the new regime).
Only a limited set of exemptions/deductions are allowed (standard deduction, certain NPS employer contributions, Agniveer 80CCH, family pension deduction, etc.); popular Chapter VI‑A deductions like 80C/80D/80G are generally not available.

Old Tax Regime – Slab Rates (Resident Individuals)

The old regime continues with higher basic exemption limits for resident senior and super‑senior citizens and full access to Chapter VI‑A deductions such as 80C, 80D, 80G, home‑loan interest (self‑occupied within limits), etc.

(A) Individuals Below 60 Years (Residents & Non‑Residents)

Total Income (₹)	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%

(B) Resident Senior Citizens (60 Years or More but Below 80 Years)

Total Income (₹)	Tax Rate
Up to 3,00,000	Nil
3,00,001 – 5,00,000	5%
5,00,001 – 10,00,000	20%
Above 10,00,000	30%

(C) Resident Super Senior Citizens (80 Years or More)

Total Income (₹)	Tax Rate
Up to 5,00,000	Nil
5,00,001 – 10,00,000	20%
Above 10,00,000	30%

Under the old regime, rebate under Section 87A continues to make tax effectively nil for resident individuals with total income up to ₹5 lakh.

New vs Old Regime – Snapshot

Comparison for Individual Below 60 Years (TY 2026‑27)

Income Level (₹)	Old Regime Rate Band	New Regime Rate Band	Illustrative Comment
Up to 2,50,000	Nil	Nil (within 0–4L)	No tax under both regimes.
2,50,001–4,00,000	5% on income above 2.5L	Nil (still within 0–4L)	New regime lighter where no big deductions exist.
4,00,001–5,00,000	5%	5% on income above 4L	Effective liability similar; 87A rebate structure is key.
5,00,001–8,00,000	5–20% blended	5% (4–8L slab)	New regime usually better for deduction‑light taxpayers.
8,00,001–12,00,000	20% on 5–10L then 30% above	10% (8–12L slab)	New regime favours salaried professionals without heavy 80C/80D.
Above 12,00,000	30% marginal rate	15–30% marginal	Choice becomes case‑specific, depending on size of deductions.

Surcharge and Health & Education Cess

Surcharge and cess apply identically to both regimes, with minor structural differences at the top end.

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Health & Education Cess: 4% on income tax plus surcharge in all cases.
Surcharge (old regime – standard structure for individuals):
- 10% where total income exceeds ₹50 lakh up to ₹1 crore.
- 15% where total income exceeds ₹1 crore up to ₹2 crore.
- 25% where total income exceeds ₹2 crore up to ₹5 crore (excluding certain capital gains categories).
- 37% where total income exceeds ₹5 crore (subject to marginal relief and special rates for specified capital gains).
Surcharge (new regime): Capped at 25% on high incomes (no 37% slab), resulting in a lower effective peak rate compared to the old regime for very high‑income taxpayers.

Worked Examples – Tax Year 2026‑27

Example 1 – Resident Individual, Total Income ₹7,00,000

Assumptions:

Income from salary/business only.
Standard deduction available as per regime.

New regime

Particulars	Amount (₹)
Gross Total Income	7,00,000
Less: Standard deduction	75,000 (aligned to FY 2025‑26)
Net Taxable Income	6,25,000

Tax under new regime:

Component	Computation	Tax (₹)
0 – 4,00,000 @ 0%	4,00,000 × 0%	0
4,00,001 – 6,25,000 @ 5%	2,25,000 × 5%	11,250
Total tax before rebate		11,250
Less: Rebate u/s 87A (up to new‑regime limit)	11,250	11,250
Tax after rebate		0
Add: 4% H&EC	0	0
Total tax payable		0

Old regime (individual below 60; assume 80C = ₹1,50,000, 80D = ₹25,000)

Particulars	Amount (₹)
Gross Total Income	7,00,000
Less: Standard deduction	50,000
Income after standard deduction	6,50,000
Less: 80C	1,50,000
Less: 80D	25,000
Net Taxable Income	4,75,000

Tax under old regime:

Component	Computation	Tax (₹)
0 – 2,50,000 @ 0%	2,50,000 × 0%	0
2,50,001 – 4,75,000 @ 5%	2,25,000 × 5%	11,250
Total tax before rebate		11,250
Less: Rebate u/s 87A (up to 5L)	11,250	11,250
Tax after rebate		0
Add: 4% H&EC	0	0
Total tax payable		0

Example 2 – Resident Salaried, Total Income ₹12,00,000

Assumptions (old regime style, based on widely used illustrations):

HRA exemption: ₹60,000.
LTA exemption: ₹20,000.
Professional tax: ₹2,400.
80C: ₹1,50,000.
80D: ₹50,000.
80E: ₹25,000.

Old regime

Particulars	Amount (₹)
Gross Salary	12,00,000
Less: HRA exemption	60,000
Less: LTA exemption	20,000
Less: Professional tax	2,400
Less: Standard deduction	50,000
Income after exemptions & standard deduction	10,67,600
Less: 80C	1,50,000
Less: 80D	50,000
Less: 80E	25,000
Net Taxable Income	8,42,600

Tax under old regime:

Component	Computation	Tax (₹)
0 – 2,50,000 @ 0%	2,50,000 × 0%	0
2,50,001 – 5,00,000 @ 5%	2,50,000 × 5%	12,500
5,00,001 – 8,42,600 @ 20%	3,42,600 × 20%	68,520
Total tax before cess		81,020
Add: 4% H&EC	3,241	3,241
Total tax payable (approx.)		84,261

New regime

Most exemptions and deductions (HRA, LTA, 80C, 80D, 80E) are not available; only the standard deduction and permitted items are considered.

Particulars	Amount (₹)
Gross Salary	12,00,000
Less: Standard deduction	75,000
Net Taxable Income	11,25,000

Tax under new regime:

Component	Computation	Tax (₹)
0 – 4,00,000 @ 0%	4,00,000 × 0%	0
4,00,001 – 8,00,000 @ 5%	4,00,000 × 5%	20,000
8,00,001 – 11,25,000 @ 10%	3,25,000 × 10%	32,500
Total tax before rebate		52,500
Less: Rebate u/s 87A (as per new‑regime threshold)	52,500	52,500
Tax after rebate		0
Add: 4% H&EC	0	0
Total tax payable		0

Example 3 – Professional / Business Income ₹22,00,000

Assumptions:

Total income taxable at slab: ₹22,00,000.
80C: ₹1,50,000; 80D: ₹25,000 under old regime.

Old regime

Particulars	Amount (₹)
Gross Total Income	22,00,000
Less: 80C + 80D	1,75,000
Net Taxable Income	20,25,000

Tax under old regime:

Component	Computation	Tax (₹)
0 – 2,50,000 @ 0%	2,50,000 × 0%	0
2,50,001 – 5,00,000 @ 5%	2,50,000 × 5%	12,500
5,00,001 – 10,00,000 @ 20%	5,00,000 × 20%	1,00,000
10,00,001 – 20,25,000 @ 30%	10,25,000 × 30%	3,07,500
Total tax before cess		4,20,000
Add: 4% H&EC	16,800	16,800
Total tax payable (approx.)		4,36,800

New regime

Particulars	Amount (₹)
Gross Total Income	22,00,000
Net Taxable Income (no 80C/80D)	22,00,000

Tax under new regime:

Component	Computation	Tax (₹)
0 – 4,00,000 @ 0%	4,00,000 × 0%	0
4,00,001 – 8,00,000 @ 5%	4,00,000 × 5%	20,000
8,00,001 – 12,00,000 @ 10%	4,00,000 × 10%	40,000
12,00,001 – 16,00,000 @ 15%	4,00,000 × 15%	60,000
16,00,001 – 20,00,000 @ 20%	4,00,000 × 20%	80,000
20,00,001 – 22,00,000 @ 25%	2,00,000 × 25%	50,000
Total tax before cess		2,50,000
Add: 4% H&EC	10,000	10,000
Total tax payable (approx.)		2,60,000