FY 2025-26 (AY 2026-27) · Source: Income Tax Act, 1961
Income tax is calculated by applying the applicable tax slab rates to your taxable income (gross income minus deductions). For FY 2025-26, the new regime has 7 slabs from 0% to 30%, and the old regime has 4 slabs. A 4% Health & Education Cess is added to the tax amount.
Under the new regime, if your taxable income is ₹12,00,000 or less, you get a full tax rebate (up to ₹60,000) — meaning zero tax payable. Under the old regime, the rebate applies if taxable income is ₹5,00,000 or less (up to ₹12,500).
If your total deductions (80C, 80D, HRA, home loan interest, etc.) exceed approximately ₹3.75 lakh, the old regime may save more tax. Otherwise, the new regime is typically better due to lower slab rates and higher rebate limit.
The standard deduction for salaried employees and pensioners is ₹75,000 for FY 2025-26 under both old and new tax regimes.
New regime slabs: ₹0-4L: 0%, ₹4-8L: 5%, ₹8-12L: 10%, ₹12-16L: 15%, ₹16-20L: 20%, ₹20-24L: 25%, Above ₹24L: 30%.
