Income Tax Slab for FY 2026-27 (Tax Year 2026-27)

Tax Year 2026-27 is the financial year from 1 April 2026 to 31 March 2027, the same period people call FY 2026-27. It is the first year taxed under the Income-tax Act, 2025, which replaced the 1961 Act and uses one term, "tax year", instead of "previous year" and "assessment year". Under the old terms, the same income would have been assessed in AY 2027-28.

The slab rates, the standard deduction and the rebate are the same as in FY 2025-26, because Budget 2026 did not change them. To work out your own tax for this year, use the Income Tax Calculator.

The new tax regime has seven slabs from 0% to 30%, the same for every age. It is the default regime: you are taxed under it unless you choose the old regime.

A 4% health and education cess is added to the tax. A surcharge applies only above ₹50 lakh of taxable income.

Yes, in the new tax regime, if your taxable income is ₹12 lakh or less. The tax on ₹12 lakh by the slabs is ₹60,000, and the rebate under Section 156 of the Income-tax Act, 2025 (formerly Section 87A) cancels all of it.

For a salaried person, the ₹75,000 standard deduction comes first, so a salary of up to ₹12.75 lakh pays no income tax. The rebate does not cover income taxed at special rates, such as capital gains on shares and equity mutual funds, and it is not available in the old regime.

Marginal relief means the tax on income just above ₹12 lakh cannot be more than the amount by which that income exceeds ₹12 lakh. Without it, earning ₹1 more than ₹12 lakh would cost ₹60,000 in tax.

Example: a salary of ₹12.8 lakh gives taxable income of ₹12.05 lakh after the standard deduction. The slab tax is ₹60,750, but marginal relief limits it to ₹5,000, the amount above ₹12 lakh. With 4% cess, you pay ₹5,200. Marginal relief stops mattering at a taxable income of about ₹12.7 lakh, where the slab tax becomes the lower figure.

The old tax regime has four slabs from 0% to 30%, and the tax-free limit depends on your age. You must choose it yourself, and in return for higher rates you can claim deductions such as investments, health insurance, HRA and home loan interest.

The standard deduction is ₹50,000, and the rebate makes tax zero only when taxable income is ₹5 lakh or less.

Senior citizens (60 to 79) and super senior citizens (80 and above) get higher tax-free limits only in the old regime: ₹3 lakh and ₹5 lakh, against ₹2.5 lakh below 60. In the new regime everyone has the same slabs, so a pensioner with taxable income up to ₹12 lakh also pays no tax there.

Pension from a former employer is taxed as salary, so pensioners get the same standard deduction: ₹75,000 in the new regime and ₹50,000 in the old. Resident senior citizens with no business income do not have to pay advance tax.

The standard deduction in the new tax regime is ₹75,000 for salaried people and pensioners, against ₹50,000 in the old regime. It is a flat amount taken off your salary or pension before tax, with no proof or investment needed (formerly Section 16(ia) of the 1961 Act).

Family pension, received by a family member after an employee's death, has its own deduction of up to ₹25,000 in the new regime. Business and professional income gets no standard deduction.

The new tax regime allows only a few deductions. The main ones for salaried people are:

The deductions most people know are old-regime only: investments under Section 123 (formerly 80C, up to ₹1.5 lakh), health insurance under Section 126 (formerly 80D), HRA, home loan interest on the house you live in (up to ₹2 lakh) and the extra ₹50,000 for your own NPS contribution. Work out your HRA with the HRA Exemption Calculator.

The income tax rebate under Section 87A, now Section 156 of the Income-tax Act, 2025, cancels the tax of resident individuals with low taxable income. For FY 2026-27 it is:

The rebate is available to every resident individual, whether the income is salary, business or interest, but not to HUFs, firms or non-residents. It does not reduce tax on capital gains taxed at special rates.

To calculate income tax on salary, take your gross salary, subtract the standard deduction and any deductions your regime allows, apply the slab rates, subtract the rebate, and add 4% cess.

Example: ₹15 lakh salary, below 60, with ₹4.05 lakh of old-regime deductions (investments ₹1.5 lakh, health insurance ₹25,000, extra NPS ₹50,000, HRA ₹1.8 lakh):

The new regime saves ₹33,540 here even with ₹4.05 lakh of deductions. Enter your own salary in the Income Tax Calculator to see both regimes side by side.

The new regime is better for most salaried people. The old regime wins only if your deductions are larger than a break-even amount, which rises with your salary and stops rising at about ₹8 lakh.

Up to a salary of ₹12.75 lakh the new regime always wins, because it gives zero tax. The old regime can come out ahead only for people who claim large HRA, a home loan on the house they live in and full investment deductions together.

For a salaried person below 60, the old regime is better only if your total deductions, apart from the standard deduction, are more than:

Tax figures include 4% cess. Few people reach ₹5–8 lakh of deductions without both HRA and home loan interest.

Yes. If you have no business or professional income, you can choose the old or the new regime every year when you file your return, regardless of what you told your employer for TDS.

If you have business or professional income, the rules are stricter: you can leave the new regime by filing a declaration before the return due date, but you can return to it only once. Choose carefully if you run a business or practise a profession.

A surcharge is extra tax charged as a percentage of income tax when taxable income is above ₹50 lakh. For FY 2026-27 it is:

The 4% cess is charged on the tax plus surcharge. Marginal relief also applies at each surcharge threshold, so crossing ₹50 lakh by a small amount does not raise your tax by more than the extra income.

The Income-tax Act, 2025 applies to income earned from 1 April 2026, starting with Tax Year 2026-27. Income earned up to 31 March 2026 (FY 2025-26) is still taxed under the Income-tax Act, 1961, including returns filed for it during 2026.

For most taxpayers the change is in the names and numbers, not the amounts. Common sections were renumbered: investments (80C) are now Section 123, health insurance (80D) is Section 126, the rebate (87A) is Section 156 and the new-regime rules (115BAC) are Section 202. TDS on salary is now Section 392, and most other TDS is in Section 393; see the TDS Calculator. If you earn income outside your salary, read the advance tax guide for this year's due dates.