📅 Updated April 2026 — Budget 2025 | FY 2025-26 | AY 2026-27
Income Tax Slabs FY 2025-26 (AY 2026-27)
New Regime & Old Regime — Complete Guide
Zero tax up to ₹12 lakh. All slab rates, 87A rebate, surcharge, cess — everything explained simply.
Key Change in Budget 2025: Zero income tax for income up to ₹12 lakh under the new tax regime (₹12.75L for salaried employees with ₹75K standard deduction). This applies from FY 2025-26 (April 2025 onwards). New regime is now default.
🔵 New Tax Regime Slabs — FY 2025-26 (Default Regime)
The new tax regime has lower slab rates but no major deductions (no HRA, no 80C, no home loan interest). Only standard deduction of ₹75,000 for salaried employees is allowed.
| Annual Income (New Regime) | Tax Rate | Tax on Slab | Cumulative Tax |
|---|
| Up to ₹4,00,000 | 0% | ₹0 | ₹0 |
| ₹4,00,001 – ₹8,00,000 | 5% | ₹20,000 | ₹20,000 |
| ₹8,00,001 – ₹12,00,000 | 10% | ₹40,000 | ₹60,000 |
| ₹12,00,001 – ₹16,00,000 | 15% | ₹60,000 | ₹1,20,000 |
| ₹16,00,001 – ₹20,00,000 | 20% | ₹80,000 | ₹2,00,000 |
| ₹20,00,001 – ₹24,00,000 | 25% | ₹1,00,000 | ₹3,00,000 |
| Above ₹24,00,000 | 30% | 30% of excess | ₹3,00,000 + 30% |
+ 4% Health & Education Cess on total tax. Surcharge for income above ₹50L.
Zero Tax Magic: If your income is up to ₹12L, tax calculated above = ₹60,000. But Section 87A rebate = ₹60,000. So net tax = ₹0! For salaried: ₹75K standard deduction means zero tax up to ₹12.75L gross salary.
📋 Old Tax Regime Slabs — FY 2025-26
Old regime allows many deductions — HRA, 80C (₹1.5L), 80D (health insurance), home loan interest (₹2L under 24b), NPS (₹50K under 80CCD(1B)), etc. Beneficial only if your total deductions are large enough.
| Annual Income (Old Regime) | Tax Rate | For Individuals below 60 |
|---|
| Up to ₹2,50,000 | 0% | No tax |
| ₹2,50,001 – ₹5,00,000 | 5% | Max ₹12,500 (rebate 87A if income ≤₹5L) |
| ₹5,00,001 – ₹10,00,000 | 20% | Up to ₹1,00,000 |
| Above ₹10,00,000 | 30% | 30% on amount above ₹10L |
+ 4% Health & Education Cess. 87A rebate: zero tax if taxable income ≤ ₹5L under old regime.
🧮 Which Regime Saves More Tax for YOUR Salary?
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⚖️ New vs Old Regime — Which Saves More?
| Annual Salary | New Regime Tax | Old Regime Tax* | Better Choice |
|---|
| ₹8,00,000 | ₹0 (rebate) | ₹0 (rebate) | Same ✅ |
| ₹10,00,000 | ₹0 (rebate) | ₹20,800 (after 80C) | New Regime 🏆 |
| ₹12,00,000 | ₹0 (rebate) | ₹62,400 (after 80C) | New Regime 🏆 |
| ₹15,00,000 | ₹1,30,000 | ₹1,56,000 (after 80C+HRA) | New Regime 🏆 |
| ₹20,00,000 | ₹2,99,000 | ₹2,73,000 (with big deductions) | Old Regime 🏆 |
| ₹30,00,000 | ₹5,99,000 | ₹4,89,600 (max deductions) | Old Regime 🏆 |
*Old regime assumes ₹1.5L (80C) + ₹50K (80D) + ₹50K (NPS). For ₹20L+ with HRA and home loan, recalculate with our calculator.
🎁 Section 87A Rebate — Zero Tax up to ₹12 Lakh
Section 87A provides a tax rebate that reduces your tax liability to zero if your total income (after standard deduction) is ₹12 lakh or below under the new regime.
How 87A works (New Regime example):
Gross Salary: ₹12,75,000
Less: Standard Deduction: −₹75,000
Taxable Income: ₹12,00,000
Tax on ₹12L (as per slabs): ₹60,000
Less: 87A Rebate: −₹60,000
Net Tax Payable = ₹0 ✅
Important: 87A rebate is NOT available for special income like capital gains (LTCG, STCG), lottery winnings, or cryptocurrency gains. If you have such income, consult a CA.
👴 Senior Citizen Tax Slabs FY 2025-26
| Age Group | Old Regime — Basic Exemption | New Regime |
|---|
| Below 60 years | ₹2,50,000 | ₹4,00,000 (same for all) |
| Senior Citizen (60-80 years) | ₹3,00,000 | ₹4,00,000 |
| Super Senior Citizen (80+ years) | ₹5,00,000 | ₹4,00,000 |
Under new regime, age doesn't matter — all taxpayers get same slabs. Old regime benefits senior citizens with higher basic exemption.
💰 Real Salary Examples — Exact Tax Calculation
| Monthly Salary (CTC) | Annual Gross | New Regime Tax | Monthly In-Hand (approx) |
|---|
| ₹50,000/mo | ₹6,00,000 | ₹0 | ₹43,000 |
| ₹83,333/mo | ₹10,00,000 | ₹0 | ₹70,000 |
| ₹1,00,000/mo | ₹12,00,000 | ₹0 (with std. ded.) | ₹84,000 |
| ₹1,25,000/mo | ₹15,00,000 | ₹1,30,000/yr | ₹1,00,000 |
| ₹1,66,667/mo | ₹20,00,000 | ₹2,99,000/yr | ₹1,32,000 |
| ₹2,50,000/mo | ₹30,00,000 | ₹5,99,000/yr | ₹1,98,000 |
❓ Frequently Asked Questions
Is there really zero tax on ₹12 lakh income in 2025-26?▼
Yes! Under the new tax regime, income up to ₹12 lakh is effectively zero tax due to Section 87A rebate. For salaried employees, add ₹75,000 standard deduction, making zero tax applicable up to ₹12.75 lakh gross salary. You still need to file ITR if gross income exceeds ₹2.5L.
Should I choose new or old tax regime in 2025-26?▼
New regime is better for most people earning under ₹15L. Old regime wins if your deductions (HRA + 80C + 80D + home loan + NPS) exceed ~₹4-5L. Use our income tax calculator to compare both regimes with your actual salary and deductions.
When is the last date to file ITR for FY 2025-26?▼
The last date to file ITR for FY 2025-26 (AY 2026-27) is 31st July 2026 for individuals without audit requirement. For those requiring audit, the deadline is 31st October 2026. Filing late attracts ₹5,000 penalty (₹1,000 if income below ₹5L) plus 1% interest per month on tax due.
What is the surcharge on income tax 2025-26?▼
Surcharge (on tax amount): 10% if income ₹50L-₹1Cr | 15% if ₹1-2Cr | 25% if ₹2-5Cr | 37% if above ₹5Cr (old regime, reduced to 25% in new regime for ₹2-5Cr). Plus 4% Health & Education Cess on tax + surcharge.
Can I switch between new and old regime every year?▼
Salaried employees can switch between regimes every year while filing ITR. Business owners (with business income) can switch only once — from old to new. New regime is the default; you need to actively opt for old regime by submitting Form 10-IEA.
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