New tax regime slabs for FY 2026-27 (AY 2027-28)
Budget 2026 did not change income tax rates. For FY 2026-27 the new regime (the default) taxes income as follows: up to ₹4 lakh nil, ₹4–8 lakh 5%, ₹8–12 lakh 10%, ₹12–16 lakh 15%, ₹16–20 lakh 20%, ₹20–24 lakh 25% and above ₹24 lakh 30%. A rebate under section 87A of up to ₹60,000 makes the tax zero when taxable income is ₹12 lakh or less, and salaried people also get a ₹75,000 standard deduction, so a salary of up to ₹12.75 lakh pays no tax. Just above ₹12 lakh, marginal relief caps the tax at the amount by which income exceeds ₹12 lakh, which this calculator applies. Health and education cess of 4% is added on tax plus surcharge.
| Taxable income (new regime) | 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% |
Old regime: when deductions still win
The old regime keeps the ₹2.5 lakh exemption (₹3 lakh for ages 60–79, ₹5 lakh for 80+), slabs of 5%, 20% and 30%, a ₹50,000 standard deduction and a rebate of up to ₹12,500 when taxable income is ₹5 lakh or less. In exchange you can claim section 80C (up to ₹1.5 lakh: EPF, PPF, ELSS, life insurance, home loan principal), 80D health insurance, HRA exemption, home loan interest on a self-occupied house (up to ₹2 lakh) and the extra ₹50,000 for NPS under 80CCD(1B). Enter your actual figures; the tool compares both regimes side by side and tells you which costs less. In practice the old regime only wins for people with large deductions, typically HRA plus a home loan plus full 80C.
How the calculation works
- Gross salary minus the standard deduction, plus other income such as interest.
- Minus eligible deductions (most are only allowed in the old regime; employer NPS contribution under 80CCD(2) is allowed in both, up to 14% of salary in the new regime and 10% in the old for private employers).
- Slab tax on the result, minus the 87A rebate.
- Surcharge for income above ₹50 lakh (10%), ₹1 crore (15%) and ₹2 crore (25%; 37% above ₹5 crore in the old regime only), with marginal relief.
- 4% cess on tax plus surcharge.
Example
A salary of ₹15 lakh in the new regime gives taxable income of ₹14.25 lakh. Slab tax is ₹60,000 + 15% of ₹2.25 lakh = ₹93,750, plus 4% cess = ₹97,500 a year, about ₹8,125 a month. In the old regime the same person would need deductions of roughly ₹4 lakh or more to come out ahead.
Assumption date: slabs, rebate and surcharge checked on 3 November 2026 against the Income Tax Department's published tax rates and the Finance Bill 2026 memorandum, which states that rates are unchanged for 2026-27. Special-rate income such as capital gains is not handled here. This tool is for information only and is not tax advice; confirm with a chartered accountant or the official e-filing portal. More money tools at Credit Card Customer Care.
Frequently asked questions
Is income up to ₹12 lakh tax free in FY 2026-27?
Yes in the new regime: the 87A rebate makes tax zero when taxable income is ₹12 lakh or less. Salaried people get a further ₹75,000 standard deduction, so salary up to ₹12.75 lakh pays no tax.
Did Budget 2026 change tax slabs?
No. The Finance Bill 2026 memorandum states there is no change in tax rates for 2026-27.
Which regime is better for me?
The new regime is usually better unless your total deductions (80C, HRA, home loan interest, 80D, NPS) are large. Enter your numbers above to compare.
What is marginal relief at ₹12 lakh?
If taxable income is slightly above ₹12 lakh, the tax payable cannot exceed the income above ₹12 lakh, which removes the sudden jump.
Does this include capital gains?
No. Capital gains and other special-rate income are taxed differently and are not included.