Here are the latest Income Tax Slabs for Financial Year (FY) 2025–26 (Assessment Year 2026–27) under both the New and Old Tax Regimes in India, as announced in the Union Budget 2025.
New Tax Regime (Default from FY 2025–26)
The New Tax Regime offers simplified tax slabs with lower rates but limited exemptions and deductions.
Income Tax Slabs and Rates:
| Annual 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 Features:
- Rebate under Section 87A: Increased to ₹60,000 for individuals with income up to ₹12,00,000, effectively resulting in zero tax liability for such taxpayers.
- Standard Deduction: ₹75,000 for salaried individuals and pensioners.
- Default Regime: The New Tax Regime is now the default; however, taxpayers can opt for the Old Regime when filing returns.
Old Tax Regime
The Old Tax Regime allows various exemptions and deductions, such as those under Sections 80C, 80D, HRA, etc.
Income Tax Slabs and Rates:
| Annual 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% |
Rebate under Section 87A:
- ₹12,500 for individuals with income up to ₹5,00,000, resulting in zero tax liability for such taxpayers.
Choosing Between New and Old Regimes
- Opt for the New Regime if you prefer lower tax rates and have minimal investments in tax-saving instruments.
- Opt for the Old Regime if you have significant deductions and exemptions to claim, which can reduce your taxable income substantially.
For a detailed comparison and to calculate your tax liability under both regimes, you can use the Income Tax Calculator provided by the Income Tax Department.
