Income tax slabs FY 2025-26 (AY 2026-27)
The income tax slabs for FY 2025-26 remain unchanged from the previous year, as confirmed by the Income Tax Department at incometax.gov.in. The Union Budget 2026, presented by Finance Minister Nirmala Sitharaman, did not introduce any changes to the tax structure for salaried individuals. The new tax regime, made default under Section 115BAC by Finance Act 2023, offers lower rates with fewer deductions.
Yes. Under the new tax regime, resident individuals with taxable income up to ₹12 lakh pay zero tax due to the Section 87A rebate of ₹60,000. Salaried individuals receive an additional standard deduction of ₹75,000, making gross salary up to ₹12.75 lakh effectively tax-free. This was introduced in Union Budget 2025 and confirmed unchanged in Budget 2026.
New tax regime slabs (default)
| Income slab | Tax rate | Tax on slab |
|---|---|---|
| Up to ₹4,00,000 | Nil | ₹0 |
| ₹4,00,001 — ₹8,00,000 | 5% | Up to ₹20,000 |
| ₹8,00,001 — ₹12,00,000 | 10% | Up to ₹40,000 |
| ₹12,00,001 — ₹16,00,000 | 15% | Up to ₹60,000 |
| ₹16,00,001 — ₹20,00,000 | 20% | Up to ₹80,000 |
| ₹20,00,001 — ₹24,00,000 | 25% | Up to ₹1,00,000 |
| Above ₹24,00,000 | 30% | — |
Source: Section 115BAC of the Income Tax Act, as amended by Finance Act 2025. Standard deduction: ₹75,000 for salaried (Section 16(ia)). Rebate: ₹60,000 under Section 87A for taxable income up to ₹12 lakh.
Old tax regime slabs (optional)
| Income slab (below 60) | 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% |
Deductions available only in old regime: Section 80C (up to ₹1.5 lakh — PPF, ELSS, EPF, LIC), Section 80D (health insurance — ₹25,000-₹1 lakh), HRA exemption under Section 10(13A), home loan interest under Section 24(b) (up to ₹2 lakh), and standard deduction of ₹50,000 for salaried.
Which regime is better for you?
According to CBDT (Central Board of Direct Taxes) data, approximately 62% of individual taxpayers chose the old tax regime in AY 2025-26, primarily to claim HRA, Section 80C, and home loan interest deductions. However, the new regime is more beneficial if your total deductions are less than approximately ₹3.75 lakh per year.
Rule of thumb: If you're a salaried individual with annual income below ₹15 lakh and don't pay rent or have a home loan, the new regime almost always saves more. If you pay significant rent (₹15,000+/month), invest ₹1.5 lakh in 80C instruments, AND have a home loan, the old regime is likely better. Use the "Compare both" tab above to see the exact difference.
Calculate your HRA exemption
If you pay rent, see how much HRA you can claim under the old regime.
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