Income Tax Slabs in India (FY 2025-26 / AY 2026-27) – Old vs New Tax Regime
Understanding income tax slabs in India is essential for calculating your tax liability and planning your finances. The Income Tax Department provides different slab rates depending on whether you choose the old tax regime or the new tax regime.
This guide explains the latest income tax slabs for FY 2025-26 (AY 2026-27) along with examples to help taxpayers understand how much tax they need to pay.
Income Tax Slabs Under New Tax Regime (FY 2025-26)
The new tax regime offers lower tax rates but removes most deductions and exemptions.
| Income Range | Tax Rate |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 – ₹6,00,000 | 5% |
| ₹6,00,001 – ₹9,00,000 | 10% |
| ₹9,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
Key features of the new regime:
Standard deduction ₹50,000 available
Most deductions like 80C, 80D, HRA are not allowed
Default tax regime for individuals
Income Tax Slabs Under Old Tax Regime
The old tax regime allows many deductions and exemptions.
| 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% |
Additional benefits include deductions under:
Section 80C (up to ₹1.5 lakh)
Section 80D (health insurance)
HRA exemption
Home loan interest deduction
Example: Tax on ₹10 Lakh Salary
Let’s compare both tax regimes.
New Tax Regime
Income: ₹10,00,000
Standard deduction: ₹50,000
Taxable income: ₹9,50,000
Estimated tax: around ₹52,500 + cess
Old Tax Regime
Income: ₹10,00,000
Assume deductions:
80C: ₹1,50,000
80D: ₹25,000
Standard deduction: ₹50,000
Taxable income: ₹7,75,000
Tax payable: about ₹67,500 + cess
In this example, new regime is slightly cheaper.
Which Tax Regime is Better?
Choosing the right regime depends on how many deductions you claim.
New regime is usually better for:
salaried individuals with few deductions
freelancers
professionals
Old regime is better for:
people with home loans
those investing under 80C
individuals claiming HRA
Rebate Under Section 87A
Taxpayers with income up to:
₹7,00,000 under new regime
may get rebate up to ₹25,000, meaning no tax liability.
How to Calculate Your Income Tax
You can calculate your tax liability using the Income Tax Calculator available on Cashiwali.
Estimate advance tax liability using our
👉 Advance Tax Calculator
Calculate HRA exemption easily using our
👉 HRA Calculator
Check your net salary using the
👉 Salary Calculator
This tool helps estimate:
total tax payable
tax savings
tax regime comparison
Income Tax Planning Tips
To legally reduce your tax liability, consider:
investing under Section 80C
purchasing health insurance
contributing to National Pension System
claiming home loan interest deduction
Tax planning should ideally be done before the financial year ends.
Need Help With Income Tax Planning?
If you need professional assistance with income tax planning or filing returns, you can consult CA Shiwali.
📞 Phone: 9266032777
🌐 Website: https://cashiwali.com
Frequently Asked Questions
What is the basic exemption limit in India?
Under the new tax regime, income up to ₹3 lakh is exempt from tax.
Which tax regime is default?
The new tax regime is the default regime unless taxpayers opt for the old regime.
Can I switch between tax regimes?
Salaried individuals can choose their regime every year when filing their return.
Do I need to pay tax if income is ₹7 lakh?
Under the new regime, Section 87A rebate may reduce tax liability to zero.
Related Income Tax Guides
Disclaimer
This article is for general informational purposes only. Tax calculations may vary depending on individual circumstances. Taxpayers should consult a qualified professional before making financial decisions.
