Income Tax Slabs FY 2025-26
Income tax slabs and rates for FY 2025-26 (AY 2026-27) under both the new and old tax regimes. Compare slabs, standard deduction, Section 87A rebate, and key deductions to choose the right regime.
India's income tax system now operates on two parallel regimes: the new (default) tax regime with lower slab rates but fewer deductions, and the old tax regime with higher rates but a rich set of exemptions and deductions. As of FY 2025-26, the new regime is the default — you must actively opt for the old regime at the time of filing. Understanding both helps you make the right choice.
New Tax Regime — Slabs for FY 2025-26 (AY 2026-27)
The new regime is the default for individual taxpayers from FY 2023-24 onwards.
| Income Range | Tax Rate |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 – ₹7,00,000 | 5% |
| ₹7,00,001 – ₹10,00,000 | 10% |
| ₹10,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
Standard deduction under new regime: ₹75,000 (from FY 2024-25 onwards — Budget 2024).
Section 87A rebate: Full tax rebate for net taxable income up to ₹7 lakh. Effective tax = ₹0 for income ≤ ₹7.75 lakh (after standard deduction).
Note: The new regime does not allow deductions under Sections 80C, 80D, HRA (10-13A), LTA, or most other Chapter VI-A deductions.
Old Tax Regime — Slabs for FY 2025-26
| 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% |
For senior citizens (60–79 years): basic exemption ₹3 lakh. For super seniors (80+ years): basic exemption ₹5 lakh.
Section 87A rebate (old regime): Full rebate for net taxable income up to ₹5 lakh.
Key Deductions Available Under the Old Regime
| Section | Deduction | Maximum Limit |
|---|---|---|
| 80C | PF, PPF, ELSS, life insurance, home loan principal, school fees | ₹1,50,000 |
| 80CCD(1B) | Additional NPS contribution | ₹50,000 |
| 80D | Health insurance premiums | ₹25,000 (₹50,000 for seniors) |
| 80TTA | Interest on savings account | ₹10,000 |
| 80TTB | Interest income for senior citizens | ₹50,000 |
| HRA (Sec 10-13A) | House Rent Allowance | Least of: actual HRA, 50%/40% of salary, rent paid minus 10% of salary |
| Standard deduction | For salaried individuals | ₹50,000 |
| Home loan interest (Sec 24b) | Interest on self-occupied property | ₹2,00,000 |
| LTA (Sec 10-5) | Leave Travel Allowance | Actual travel cost (2 journeys in 4-year block) |
New Regime vs Old Regime — Which is Better?
The right choice depends entirely on your eligible deductions:
| Scenario | Likely Better Regime |
|---|---|
| Salaried with no major investments or HRA | New regime |
| HRA + 80C (maxed) + 80D + home loan | Old regime |
| Income > ₹15 lakh, deductions < ₹3.75 lakh | New regime |
| Income > ₹15 lakh, deductions > ₹3.75 lakh | Old regime |
| Business income (not eligible for most allowances) | New regime often wins |
Rule of thumb for the 30% bracket: If total eligible deductions exceed ₹3.75 lakh (= ₹1.5L 80C + ₹50K NPS + ₹50K 80D + ₹2L home loan interest + standard deduction difference), the old regime generally results in lower tax.
Surcharge and Cess
In addition to basic income tax, the following are levied:
| Income | Surcharge (New Regime) | Surcharge (Old Regime) |
|---|---|---|
| Up to ₹50 lakh | Nil | Nil |
| ₹50 lakh – ₹1 crore | 10% | 10% |
| ₹1 crore – ₹2 crore | 15% | 15% |
| ₹2 crore – ₹5 crore | 25% | 25% |
| Above ₹5 crore | 25% | 37% |
Health and Education Cess: 4% on (income tax + surcharge) — applicable under both regimes.
Income Tax Return (ITR) Filing Deadlines
| Taxpayer type | Due Date |
|---|---|
| Individuals (not audited) | 31 July |
| Businesses requiring audit | 31 October |
| Transfer pricing cases | 30 November |
| Belated / revised return | 31 December |
Frequently Asked Questions
Q. Can I switch between old and new regime every year? Salaried individuals (no business income) can switch between regimes every year when filing their ITR. Those with business income can switch only once — once they opt back to the old regime, they cannot switch again.
Q. What is the tax on ₹10 lakh income under the new regime? After the ₹75,000 standard deduction, taxable income = ₹9.25 lakh. Tax: nil on ₹3L, 5% on ₹4L (₹20,000), 10% on ₹2.25L (₹22,500). Total = ₹42,500 + 4% cess = ₹44,200.
Q. Is there any tax on income up to ₹7 lakh under the new regime? Effectively no. The Section 87A rebate covers full tax for income up to ₹7 lakh. Adding the ₹75,000 standard deduction, a salaried person earning up to ₹7.75 lakh gross pays zero income tax under the new regime.
Related Resources
Frequently Asked Questions
What are the income tax slabs for FY 2025-26 under the new tax regime?+
Under the new tax regime for FY 2025-26 (AY 2026-27), income up to ₹3 lakh is nil; ₹3–7 lakh at 5%; ₹7–10 lakh at 10%; ₹10–12 lakh at 15%; ₹12–15 lakh at 20%; above ₹15 lakh at 30%. A standard deduction of ₹75,000 is available under the new regime.
Which tax regime is better — old or new?+
The new regime offers lower slab rates and a ₹75,000 standard deduction but disallows most deductions (80C, HRA, LTA, etc.). The old regime suits taxpayers with significant eligible deductions and allowances. As a rule of thumb, if your total deductions exceed ₹3.75 lakh (30% bracket), the old regime may save more tax.
What is the income tax rebate under Section 87A for FY 2025-26?+
Under the new tax regime, individuals with net taxable income up to ₹7 lakh get a full rebate under Section 87A, making their effective tax liability zero. Under the old regime, the rebate is available for income up to ₹5 lakh.
What is the surcharge on income tax for FY 2025-26?+
Surcharge is levied at 10% for income between ₹50 lakh and ₹1 crore; 15% for ₹1–2 crore; 25% for ₹2–5 crore; and 37% for income above ₹5 crore (only under old regime; capped at 25% under new regime). A 4% health and education cess is levied on total tax including surcharge.