New regime slabs for FY 2026-27
Budget 2026 left the new-regime slabs unchanged from the previous year.
| Taxable income | 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% |
Salaried taxpayers get a ₹75,000 standard deduction. The Section 87A rebate (up to ₹60,000) makes taxable income up to ₹12 lakh tax-free, so a salary of up to ₹12.75 lakh pays nothing. Just above ₹12 lakh, marginal relief limits your tax to the amount by which you exceed ₹12 lakh. The only other common deduction is the employer's NPS contribution under Section 80CCD(2), up to 14% of basic pay.
Old regime slabs
| Taxable income | 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% |
The old regime offers a ₹50,000 standard deduction and a rebate up to ₹12,500 for taxable income up to ₹5 lakh, but allows deductions the new regime does not: 80C up to ₹1.5 lakh, 80D for health insurance, HRA exemption, home-loan interest up to ₹2 lakh on a self-occupied house, professional tax and more. Seniors aged 60 to 80 have a ₹3 lakh exemption limit and those over 80 have ₹5 lakh.
Which regime should you choose?
Compare the tax under both regimes with your real deductions. As a rule of thumb, for salaries above about ₹27 lakh the old regime only wins if your total deductions beyond the standard deduction exceed roughly ₹8 lakh, which is difficult without a large home loan and high rent. At lower salaries, the break-even point is lower but still well above what 80C and 80D alone provide. The salary examples show the break-even deduction for each package.
Salaried people without business income can choose either regime every year when filing their return, even if they told their employer something different for TDS.
Surcharge and cess
A 4% health and education cess applies to all tax. Surcharge applies above ₹50 lakh of income: 10% up to ₹1 crore, 15% up to ₹2 crore and 25% above that in the new regime (the old regime goes up to 37% above ₹5 crore), with marginal relief at each threshold.
Frequently asked questions
Is income up to ₹12 lakh tax-free in FY 2026-27?
Yes, under the new regime. The Section 87A rebate covers tax on taxable income up to ₹12 lakh; with the ₹75,000 standard deduction, salary up to ₹12.75 lakh is tax-free.
Did Budget 2026 change the tax slabs?
No. The new-regime slabs, the ₹75,000 standard deduction and the ₹12 lakh rebate limit continue unchanged for FY 2026-27.
Is the new regime the default?
Yes. If you do not opt for the old regime, your employer deducts TDS under the new regime.
Can I claim HRA in the new regime?
No. HRA exemption, 80C and 80D are available only in the old regime. The employer's NPS contribution under 80CCD(2) is allowed in both.