Income Tax Slabs India FY 2025-26 – Old & New Regime
Income Tax Slabs India FY 2025-26 – Old & New Regime is your practical guide to understanding the updated tax brackets, comparing both systems and estimating your annual income tax for assessment year 2026–27.
Income Tax Slabs India FY 2025-26 – Old & New Regime Calculator
Enter your annual income and eligible deductions to estimate tax under both regimes. The calculator applies FY 2025–26 slabs, relevant standard deductions, Section 87A rebate and 4% health and education cess.
Educational estimate for ordinary income up to ₹50 lakh. Surcharge, capital gains, lottery income, special-rate income, marginal relief relating to surcharge and complex deductions are not included. Section 87A is applied only for resident individuals.
Browse the Income Tax Slabs India FY 2025-26 – Old & New Regime Guide
Use this compact contents index to jump directly to tax rates, examples, deductions, rebates and common questions. Each section explains how the rules apply to annual taxable income rather than simply quoting a salary package.
New Income Tax Slabs for FY 2025–26
The Finance Act 2025 introduced revised new-regime income-tax brackets for FY 2025–26. These rates apply to the corresponding assessment year 2026–27.
Under the revised structure, ordinary taxable income up to ₹4 lakh falls within the zero-rate slab. The highest marginal rate of 30% begins above ₹24 lakh. Each rate applies only to the income falling within its corresponding band.
The new regime is generally the default system for eligible taxpayers. It offers lower slab rates but restricts several exemptions and deductions available under the old regime.
For eligible resident individuals, Section 87A can reduce ordinary income tax to zero when taxable income does not exceed ₹12 lakh. This rebate is separate from the basic exemption limit.
Refer to the Income Tax Department's official tax-rate guidance for the statutory framework.
| Annual taxable income | Income tax rate |
|---|---|
| Up to ₹4,00,000 | 0% |
| ₹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% |
Old Income Tax Slabs India FY 2025–26
The old regime retains its age-based basic exemption limits and permits eligible deductions and exemptions. It can remain useful for taxpayers with substantial qualifying investments, insurance payments, housing-related benefits or other deductions.
| Taxable income | Below 60 | Age 60–79 | Age 80+ |
|---|---|---|---|
| Up to ₹2,50,000 | 0% | 0% | 0% |
| ₹2,50,001 – ₹3,00,000 | 5% | 0% | 0% |
| ₹3,00,001 – ₹5,00,000 | 5% | 5% | 0% |
| ₹5,00,001 – ₹10,00,000 | 20% | 20% | 20% |
| Above ₹10,00,000 | 30% | 30% | 30% |
The old regime uses a basic exemption of ₹2.5 lakh for individuals below 60, ₹3 lakh for eligible resident senior citizens and ₹5 lakh for eligible resident super-senior citizens. Non-resident individuals do not receive the age-based higher exemption merely because they meet the age requirement.
For example, an individual below 60 with ₹8 lakh taxable income under the old regime pays ₹12,500 on the ₹2.5 lakh to ₹5 lakh portion and ₹60,000 on the next ₹3 lakh. The resulting income tax before cess is ₹72,500.
However, taxable income is determined after permitted deductions. If eligible deductions reduce the amount significantly, the final tax may be much lower. This is why comparing regimes using gross salary alone can be misleading.
Section 87A Rebate and the ₹12 Lakh Tax Threshold
One of the most important changes in Income Tax Slabs India FY 2025-26 – Old & New Regime is the enhanced Section 87A rebate available under the new regime. For eligible resident individuals, the rebate can eliminate ordinary income tax when total taxable income does not exceed ₹12 lakh.
The maximum rebate is ₹60,000 under the new regime. At exactly ₹12 lakh of ordinary taxable income, the slab-based tax is ₹60,000, which can be fully offset by the rebate. Consequently, the income tax and cess on that ordinary income become zero.
Does ₹12 Lakh Income Mean Zero Tax for Everyone?
No. The rule depends on taxable income, residency and the nature of income. Non-residents are not eligible for Section 87A. The enhanced rebate also cannot be used against tax payable on income taxed at special rates, such as certain capital gains.
For salaried taxpayers, the new-regime standard deduction of ₹75,000 can make ordinary gross salary of ₹12.75 lakh effectively tax-free when there is no other taxable income or adjustment that changes eligibility.
Important distinction: ₹12 lakh is the qualifying taxable-income threshold for the enhanced rebate, not the basic exemption limit. Income between ₹4 lakh and ₹12 lakh is still calculated using the applicable slabs before the rebate is considered.
Marginal Relief Just Above ₹12 Lakh
Marginal relief prevents the income tax immediately above the threshold from exceeding the additional taxable income above ₹12 lakh. For example, at ₹12.10 lakh taxable ordinary income, slab tax before relief is ₹61,500, while the excess income is only ₹10,000.
The applicable relief reduces tax before cess to ₹10,000 in this example. Health and education cess of 4% then produces an estimated liability of ₹10,400. This protection does not mean all income above ₹12 lakh remains tax-free.
Under the old regime, eligible resident individuals with taxable income up to ₹5 lakh can receive a rebate of up to ₹12,500. Read the Section 87A rebate calculator for additional context.
Tax Deductions Under the Old and New Regime
Income-tax slabs tell you how rates apply, but deductions determine the amount on which those rates operate. For salaried employees, the standard deduction is an important starting point. Under FY 2025–26 rules, eligible salary income receives a ₹75,000 standard deduction in the new regime and ₹50,000 in the old regime.
Most common Chapter VI-A deductions are unavailable under the new regime, although specified exceptions remain. The old regime allows a wider selection of deductions and exemptions, subject to eligibility, documentation and statutory limits.
Common Old-Regime Deductions
- Section 80C: Up to ₹1.5 lakh in aggregate for eligible items such as qualifying provident fund contributions, life insurance premiums, PPF and certain other investments.
- Section 80D: Eligible health insurance premiums and specified medical expenses, with limits depending on the persons covered and their ages.
- HRA exemption: Available where applicable, based on actual HRA received, rent paid, eligible salary and the relevant city category.
- Section 80CCD(1B): An additional deduction of up to ₹50,000 for qualifying individual NPS contributions under the old regime.
- Housing loan interest: Potential deductions subject to property use, financing conditions and the relevant statutory limits.
Do not assume every amount invested is deductible. A deduction must satisfy the applicable conditions, and some expenses may already be included within a combined limit. For example, employee provident fund contributions and eligible life insurance premiums both use the overall Section 80C ceiling.
What Is Allowed Under the New Regime?
The new regime permits the applicable standard deduction for salary income, eligible employer NPS contributions under Section 80CCD(2), and certain other specified deductions. Normal HRA exemption and ordinary personal Section 80C investments generally do not reduce new-regime taxable income.
For someone who pays significant rent or has a housing loan, the old regime may deserve closer analysis. The HRA exemption guide can help explain one of the most commonly misunderstood salary benefits.
Income Tax Slabs India FY 2025-26 – Old & New Regime Examples
Worked examples make progressive taxation easier to understand. The following calculations assume an eligible resident individual below 60, ordinary income, no surcharge and no special-rate income. Figures include 4% cess where tax remains payable.
Example 1: ₹8 Lakh Taxable Income
Under the new regime, the first ₹4 lakh is taxed at zero and the next ₹4 lakh at 5%, creating ₹20,000 tax before rebate. Since eligible taxable income is within ₹12 lakh, the Section 87A rebate reduces ordinary income tax to zero.
Under the old regime, if taxable income is already ₹8 lakh after all deductions, the tax is ₹72,500 before cess and ₹75,400 including cess. This illustrates why the same taxable income can produce very different outcomes.
Example 2: ₹15 Lakh Taxable Income
Under the new regime, tax is ₹20,000 on the ₹4 lakh to ₹8 lakh band, ₹40,000 on the next ₹4 lakh and ₹45,000 on income between ₹12 lakh and ₹15 lakh. The total is ₹1,05,000 before cess and ₹1,09,200 including cess.
For an individual below 60 with ₹15 lakh taxable income under the old regime, tax before cess is ₹2,62,500. Including 4% cess, the amount is ₹2,73,000. These are comparisons of equal taxable income, not necessarily equal gross income.
Example 3: ₹20 Lakh Taxable Income
Under the new regime, progressive slab tax is ₹2 lakh before cess, resulting in ₹2,08,000 after 4% cess. Under the old regime for an individual below 60, the corresponding tax is ₹4,12,500 before cess and ₹4,29,000 after cess.
These examples show the effect of slab rates alone. An actual regime decision must calculate taxable income separately under each system because the permitted deductions differ. Use the calculator above with your own figures instead of relying on an example as a personal tax estimate.
How to Calculate Income Tax Step by Step
Calculating tax under Income Tax Slabs India FY 2025-26 – Old & New Regime requires more than multiplying salary by a single percentage. Indian personal income tax is progressive, meaning different portions of taxable income are taxed at different rates.
- Identify the financial year. FY 2025–26 covers income earned between 1 April 2025 and 31 March 2026. Its assessment year is 2026–27.
- Determine total income. Include applicable salary, pension, interest, rental income and other taxable income according to the relevant provisions.
- Apply permitted exemptions. Calculate exemptions available under the selected regime and relevant income category.
- Subtract eligible deductions. Use the correct standard deduction and other qualifying deductions without double counting.
- Calculate slab-wise tax. Apply each marginal rate only to the taxable amount within its bracket.
- Apply eligible rebate or relief. Consider Section 87A and marginal relief where the statutory conditions are met.
- Add cess and applicable surcharge. Health and education cess is generally 4% of income tax plus surcharge, subject to the applicable rules.
Income Tax Calculation Formula
Taxable income = applicable total income − eligible exemptions and deductions.
Basic income tax = sum of tax calculated separately for each applicable income slab.
Estimated final tax = tax after eligible rebate and relief + applicable surcharge + health and education cess.
Tax deducted at source is generally a credit against the eventual income-tax liability, not a separate additional tax. Compare estimated liability with eligible TDS, advance tax and other credits when preparing your return.
The monthly salary TDS calculator can help explain why payroll withholding may differ from a simple annual-tax-divided-by-twelve estimate.
Common Mistakes When Comparing Tax Regimes
The most frequent mistake is treating annual CTC as taxable income. CTC may include employer provident fund contributions, insurance costs, gratuity provisions and variable pay. Taxable salary must be determined from the actual compensation structure and applicable tax provisions.
Another error is applying the highest tax bracket to an entire salary. A taxpayer whose taxable income reaches the 20% bracket does not pay 20% on every rupee. Only the relevant portion within that bracket attracts that marginal rate.
Taxpayers also sometimes assume that the new regime automatically eliminates tax for every person earning less than ₹12 lakh. Section 87A eligibility depends on resident-individual status and the relevant income classification. Capital gains and other special-rate income require separate attention.
Under the old regime, claiming investments without checking statutory limits can overstate savings. Deductions for insurance, provident fund, NPS, HRA and housing loans follow different rules. Keep evidence of payments and use actual eligible figures rather than estimated maximum deductions.
Finally, remember that the default regime and the ability to switch regimes are not identical for all taxpayers. Individuals with business or professional income face additional conditions and procedural requirements. The tax regime savings comparison calculator provides a related planning perspective.
Old vs New Regime: Key Differences
The better regime depends on your taxable income, permitted deductions and personal circumstances. Compare the full tax liability rather than choosing a system solely because its slab rates appear lower.
| Feature | New regime | Old regime |
|---|---|---|
| Default regime | Generally yes | Requires eligible opt-out |
| Basic exemption below age 60 | ₹4,00,000 | ₹2,50,000 |
| Salary standard deduction | ₹75,000 | ₹50,000 |
| Section 87A threshold | ₹12 lakh | ₹5 lakh |
| Maximum Section 87A rebate | ₹60,000 | ₹12,500 |
| Normal Section 80C deduction | Not available | Available if eligible |
| Normal HRA exemption | Not available | Available if eligible |
| Highest marginal slab rate | 30% | 30% |
The new regime is often attractive where deductions are limited, particularly because of its expanded rebate and wider lower-rate slabs. The old regime may be competitive where substantial eligible deductions and exemptions reduce taxable income. No single conclusion applies to every taxpayer.
One Income. Two Tax Systems. Different Outcomes.
Before filing, check the factors that can change your income-tax liability. The right calculation starts with accurate income classification and ends with a comparison of both permitted regimes.
Related Income Tax and Salary Calculators
Use these related resources when you need a more focused estimate for deductions, salary withholding, tax rebates or employment income.
Tax Regime Savings Comparison
Compare estimated liabilities and identify the effect of eligible deductions.
Income Tax Rebate 87A
Understand the rebate and the qualifying income thresholds.
TDS Calculator
Explore tax deducted at source on applicable income.
Salary TDS Monthly Deduction
Understand how annual tax estimates relate to payroll deductions.
HRA Calculator
Estimate qualifying house rent allowance exemptions.
Salary Breakup Calculator
Separate salary components before calculating taxable pay.
CTC Versus Gross Salary
Understand why employer cost differs from gross earnings.
Old vs New Tax Regime
Read more about the trade-offs between both tax systems.
Frequently Asked Questions About FY 2025–26 Income Tax
Answers to common questions about the new slabs, the old regime, rebate eligibility and calculating tax on salary.
01 What are the new income tax slabs for FY 2025–26? +
The new regime applies 0% up to ₹4 lakh, 5% from ₹4 lakh to ₹8 lakh, 10% from ₹8 lakh to ₹12 lakh, 15% from ₹12 lakh to ₹16 lakh, 20% from ₹16 lakh to ₹20 lakh, 25% from ₹20 lakh to ₹24 lakh and 30% above ₹24 lakh. These are progressive rates.
02 Is income up to ₹12 lakh tax-free? +
Eligible resident individuals with ordinary taxable income up to ₹12 lakh under the new regime can receive a Section 87A rebate that eliminates ordinary income tax. The rebate does not apply to tax on special-rate income, and non-residents are ineligible.
03 What is the standard deduction for FY 2025–26? +
The standard deduction for eligible salary income is ₹75,000 under the new regime and ₹50,000 under the old regime. These amounts are not generally available against ordinary interest income merely because the taxpayer is an individual.
04 What is the assessment year for FY 2025–26? +
Income earned from 1 April 2025 through 31 March 2026 belongs to FY 2025–26 and is assessed in AY 2026–27. Confusing the financial year with the assessment year can lead to selecting the wrong slab table.
05 Can I claim Section 80C in the new regime? +
Normal Section 80C deductions for investments such as PPF and qualifying life insurance premiums are generally unavailable under the new regime. The old regime permits eligible Section 80C deductions within the combined ₹1.5 lakh ceiling.
06 Do senior citizens receive higher exemptions? +
Eligible resident senior citizens receive age-based higher basic exemption limits under the old regime. The new regime uses the same basic slab structure regardless of age. Age alone does not establish eligibility for an old-regime resident senior exemption.
07 Is the new tax regime compulsory? +
The new regime is generally the default, but eligible taxpayers can choose the old regime. Individuals with business or professional income must pay particular attention to the prescribed option procedures and restrictions on switching.
08 How is 4% cess calculated? +
Health and education cess is generally 4% of income tax plus any applicable surcharge after the relevant rebate or relief calculation. For example, ₹50,000 of tax after rebate with no surcharge produces ₹2,000 cess.
09 Which tax regime is better for ₹15 lakh salary? +
The answer depends on taxable salary and eligible deductions. The new regime has lower progressive rates, but substantial old-regime exemptions and deductions can change the comparison. Calculate taxable income separately under both regimes before deciding.
10 Does the calculator include capital gains tax? +
No. The calculator estimates tax on ordinary income only. Capital gains and other special-rate income require separate calculations and may not qualify for the enhanced Section 87A rebate. They should not be entered as ordinary income in this estimator.
11 Can TDS be higher than my final tax liability? +
Yes. Payroll withholding is based on estimated tax liability and available declarations. Your final liability may differ because of other income, deductions or tax credits. Any eligible excess tax credit is addressed through the income-tax return process.
12 Where can I verify Income Tax Slabs India FY 2025-26 – Old & New Regime? +
Use official Income Tax Department guidance and the Finance Act 2025. Confirm that the material refers to FY 2025–26 or AY 2026–27 rather than the preceding assessment year. The official references below provide starting points for verification.
Make Your Income Tax Decision With Confidence.
Income Tax Slabs India FY 2025-26 – Old & New Regime provides the rates, rebate rules and calculation examples needed for an informed comparison. Use your actual taxable income and verified deductions, then reconcile the result with official tax guidance before filing.
The most useful comparison is not simply which system has lower published rates. It is which permitted regime produces the lower lawful tax liability for your complete income profile.
Calculate your tax again →Financial and tax information notice: This guide and calculator are educational resources, not personalised tax, accounting or legal advice. Results depend on residency, income classification, age, deductions, surcharge, special-rate income, rebates, relief, tax credits and statutory conditions. The calculator deliberately excludes several complex tax provisions. Verify material calculations before filing a return or making financial decisions.
Official references: Income Tax Department — Tax Rates and Computation; Income Tax e-Filing Portal — Individual Returns; Union Budget 2025–26 — Budget Highlights.
Tax-year reference: FY 2025–26 / AY 2026–27. This page does not imply that an income-tax return has been filed or verified by the Income Tax Department.