Income tax slabs, FY 2026-27

These are the income tax slabs for FY 2026-27 (assessment year 2027-28), for both the new and old tax regimes. Budget 2026 made no changes to income tax, so every figure here carries forward directly from Budget 2025. This page is the plain-language reference; the calculators elsewhere on this site apply these same rules to your actual numbers.

New regime slabs (default)

The new regime also carries a ₹75,000 standard deduction and a Section 87A rebate that zeroes out tax entirely for taxable income up to ₹12,00,000 — which means gross salary up to roughly ₹12,75,000 is effectively tax-free once the standard deduction is applied. Beyond the standard deduction and employer NPS contributions under Section 80CCD(2), no other deduction is allowed — no HRA, no 80C, no home loan interest, and professional tax isn't deductible either.

Old regime slabs (opt-in)

The basic exemption is higher for older taxpayers: ₹3,00,000 for ages 60-79, ₹5,00,000 for 80 and above. The rates and band widths above the exemption stay the same — the whole structure just shifts up to start from the higher exemption point. Standard deduction is ₹50,000, and the 87A rebate only zeroes out tax up to ₹5,00,000 taxable income — a much lower threshold than the new regime's ₹12,00,000. In exchange, the old regime allows real deductions the new one doesn't: HRA exemption, up to ₹1,50,000 under Section 80C, an additional ₹50,000 under 80CCD(1B) for NPS, and up to ₹2,00,000 in self-occupied home loan interest under Section 24(b).

Marginal relief: the part most calculators get wrong

Rebates create a cliff-edge problem. Without a fix, someone earning exactly at the new regime's ₹12,00,000 rebate threshold pays zero tax, but someone earning ₹12,10,000 would pay tax on the full slab calculation — around ₹63,960 — for just ₹10,000 more income. Marginal relief exists to prevent exactly that: it caps tax at no more than the amount by which your income exceeds the threshold.

Worked example: taxable income of ₹12,10,000 produces a slab tax of ₹61,500. The excess over ₹12,00,000 is only ₹10,000, so marginal relief caps the tax at that ₹10,000 instead. Add 4% cess and the real tax is ₹10,400 — not the ₹63,960 a naive slab-only calculation would produce. This taper continues for a stretch above the threshold until the normal slab tax naturally drops below the income-over-threshold figure, at which point relief stops applying because it's no longer needed.

Surcharge, and its own marginal relief

Above ₹50,00,000 taxable income, a surcharge adds further tax on top of the slab calculation: 10% above ₹50L, 15% above ₹1Cr, and 25% above ₹2Cr under the new regime — which caps there, with no 37% band. The old regime adds a 37% band above ₹5Cr that the new regime doesn't have. Just like the rebate, surcharge has marginal relief at every threshold: (tax + surcharge) can never exceed (tax + surcharge at the threshold) plus the amount your income exceeds it by. Without this, someone earning ₹50,00,100 would pay dramatically more than someone earning exactly ₹50,00,000 — a cliff this relief exists specifically to prevent.

Cess, on top of everything

A 4% Health and Education Cess applies to (tax + surcharge) under both regimes, calculated last, after every rebate and relief has already been applied. It's the final step in the calculation, not a rate baked into the slabs themselves.

Employer NPS: a cap that depends on more than just your regime

If your employer contributes to your NPS account, Section 80CCD(2) governs how much of that counts as tax-free. It's easy to assume the cap only depends on your regime, but it actually depends on your regime and your employer type together. Under the new regime, both private and government employees get a 14% of basic-plus-DA cap. Under the old regime, private-sector employees are capped at 10%, while government employees keep the 14% cap — a distinction Budget 2024 introduced specifically to make the new regime more attractive for private-sector employees. Anything your employer contributes above the applicable cap becomes a taxable perquisite rather than a tax-free benefit.

There's a second, separate limit that applies regardless of the 80CCD(2) cap: under Section 17(2)(vii), employer contributions to recognized provident fund, NPS, and approved superannuation fund — added together — are tax-free only up to ₹7,50,000 in a financial year. This aggregate ceiling can bite even when your NPS contribution alone comfortably passes its own 80CCD(2) test, if your employer's provident fund contribution pushes the combined total past ₹7,50,000. It only becomes relevant at high basic salaries, but at that level it's a real, easy-to-miss add-back to taxable income that a surprising number of calculators skip entirely.

A few worked examples across income levels

At ₹8,00,000 taxable income under the new regime, tax comes to zero — comfortably under the ₹12,00,000 rebate threshold. At ₹16,00,000, slab tax works out to ₹1,20,000, and since that's already less than the ₹4,00,000 by which income exceeds the ₹12,00,000 threshold, no marginal relief is needed — cess brings the final figure to ₹1,24,800. At ₹24,00,000, the same logic applies further out: slab tax is ₹3,00,000, and after 4% cess the total is ₹3,12,000, with no surcharge since taxable income is still well under ₹50,00,000. These are exactly the kind of numbers this guide's calculators verify against on every change to the underlying tax configuration, so the figures you see in the tools match what's described here.

Which regime should you use?

The new regime is the default since FY 2023-24 and wins for most people without large deductions to claim, thanks to its bigger standard deduction and higher rebate threshold. The old regime can still win if your HRA, 80C investments, and home loan interest add up to a substantial share of your income. The only reliable way to know which applies to you is to run both numbers — the old vs new regime comparison tool on this site does exactly that with your actual figures.