Income Tax Slabs for Tax Year 2026-27
Updated June 2026 · VerifiedWhat Are the New Regime Tax Slabs for Tax Year 2026-27?
The new tax regime is the default regime under the Income-tax Act, 2025. Taxpayers do not need to opt in; they are automatically covered unless they specifically choose the old regime.
| Income Slab | 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% |
What Are the Old Regime Tax Slabs for Tax Year 2026-27?
The old regime continues to be available for taxpayers who opt for it. It allows a wider range of deductions and exemptions such as HRA, LTA, and Section 80C investments.
| Income Slab | Tax Rate (Below 60 yrs) | Tax Rate (60-80 yrs) | Tax Rate (Above 80 yrs) |
|---|---|---|---|
| Up to ₹2,50,000 | Nil | Nil | Nil |
| ₹2,50,001 – ₹3,00,000 | 5% | Nil | Nil |
| ₹3,00,001 – ₹5,00,000 | 5% | 5% | Nil |
| ₹5,00,001 – ₹10,00,000 | 20% | 20% | 20% |
| Above ₹10,00,000 | 30% | 30% | 30% |
What Is the Surcharge on Income Tax?
Surcharge is an additional tax levied on taxpayers whose total income exceeds certain thresholds. The surcharge rates for Tax Year 2026-27 are:
| Total Income | Surcharge (Old Regime) | Surcharge (New Regime) |
|---|---|---|
| ₹50 lakh – ₹1 crore | 10% | 10% |
| ₹1 crore – ₹2 crore | 15% | 15% |
| ₹2 crore – ₹5 crore | 25% | 25% |
| Above ₹5 crore | 37% | 25% (capped) |
What Is the Health & Education Cess?
A 4% Health & Education Cess is levied on the total of income tax plus surcharge. This applies to both old and new regimes and is used to fund health and education initiatives across India.
Total tax payable = Income Tax + Surcharge + 4% Cess on (Income Tax + Surcharge)
Who Should Choose the New Regime?
The new regime is generally better if:
- Your total deductions and exemptions are less than ₹3,75,000.
- You prefer a simplified tax filing process.
- You do not have HRA claims, home loan interest, or large 80C investments.
- You want to benefit from the ₹12 lakh rebate threshold.
Conversely, the old regime may save more if your deductions under 80C, 80D, HRA, and home loan interest exceed the break-even point.
Frequently Asked Questions
What is the basic exemption limit under the new regime for Tax Year 2026-27?
Under the new tax regime, the basic exemption limit is ₹4,00,000. Income up to this amount is not taxable.
Is the old tax regime still available in Tax Year 2026-27?
Yes. Although the new regime is the default under the Income-tax Act, 2025, taxpayers can opt for the old regime while filing their return. Salaried individuals need to intimate their employer to deduct TDS under the old regime.
What is the maximum rebate under the new regime?
If your total taxable income does not exceed ₹12,00,000, your full tax liability is rebated under the new regime. For salaried individuals, the effective threshold is ₹12,75,000 after accounting for the ₹75,000 standard deduction.
What changed from the Income-tax Act, 1961 to the Income-tax Act, 2025?
The Income-tax Act, 1961 was repealed effective 01-Apr-2026. The Income-tax Act, 2025 simplifies the tax code, updates section numbering (e.g., Section 192 is now Section 392 for TDS on salary), and makes the new regime the default. Tax concepts like “Assessment Year” and “Financial Year” are replaced by “Tax Year.”
Is surcharge capped under the new regime?
Yes. Under the new regime, the maximum surcharge rate is capped at 25%, even for incomes above ₹5 crore. In the old regime, incomes above ₹5 crore attract a 37% surcharge.
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