For
the Financial
Year 2026-27 (Assessment Year 2027-28), the Union Budget 2026
announced no changes to the existing income tax slabs. The
rates and thresholds remain exactly the same as the previous year, even though
the new, simplified Income Tax Act, 2025 goes into effect on
April 1, 2026.
Here
are the detailed tax slabs for both the default New Tax Regime and the optional
Old Tax Regime.
1. New Tax Regime (Default)
The
New Tax Regime continues to be the default option. It offers lower slab rates
but does not allow you to claim most traditional deductions (like Section 80C,
HRA, etc.).
|
Annual Taxable Income |
Tax Rate |
|
₹0
– ₹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
Benefits of the New Regime:
- Tax-Free Income Limit: Thanks to the Section 87A
rebate, if your total taxable income is up to ₹12 Lakh, you
pay zero tax.
- Standard Deduction: Salaried individuals and
pensioners receive a standard deduction of ₹75,000.
- Effective Tax-Free Salary: If you are a salaried
employee, you can earn a gross salary of up to ₹12.75 Lakh (₹12L
limit + ₹75k deduction) without paying any income tax
2. Old Tax Regime (Optional)
The
Old Tax Regime remains available as an optional choice. It features higher tax
slab rates but allows you to claim various exemptions and deductions (such as
Section 80C, 80D, HRA, and Home Loan Interest) to lower your taxable income.
|
Annual Taxable Income |
Tax Rate (Non-Seniors) |
Seniors (60-80 yrs) |
Super Seniors (80+ yrs) |
|
Up
to ₹2.5 Lakh |
Nil |
Nil
(up to ₹3L) |
Nil
(up to ₹5L) |
|
₹2,50,001
– ₹5,00,000 |
5% |
5% |
Nil |
|
₹5,00,001
– ₹10,00,000 |
20% |
20% |
20% |
|
Above
₹10,00,000 |
30% |
30% |
30% |
Key
Details for the Old Regime:
- Standard Deduction: Remains at ₹50,000 for
salaried individuals.
- Tax-Free Rebate Limit: Under Section 87A, the
rebate is only available for a taxable income of up to ₹5 Lakh.
If your income exceeds this, you pay tax according to the slabs.
- Deductions Allowed: You must actively opt
into this regime if you want to claim deductions like PPF, LIC, ELSS,
health insurance, and rent.
Summary Comparison for FY 2026-27
|
Feature |
New Regime (Default) |
Old Regime (Optional) |
|
Basic
Exemption |
₹4,00,000 |
₹2,50,000 |
|
Standard
Deduction |
₹75,000 |
₹50,000 |
|
Tax-Free
Income Limit (Rebate) |
₹12,00,000 |
₹5,00,000 |
|
Major
Deductions |
Not
Allowed |
Allowed
(80C, 80D, HRA, etc.) |
Note:
A 4% Health and Education Cess is added to the final tax amount calculated
under both regimes.
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