The new regime tax slab structure has seven bands: nil up to ₹4 lakh, then 5%, 10%, 15%, 20% and 25% on each further ₹4 lakh, and 30% on income above ₹24 lakh. Thanks to a rebate of up to ₹60,000, a resident individual with taxable income up to ₹12 lakh owes nothing.
This is the default regime for individuals, HUFs and similar taxpayers. It applies unless you choose the old regime. The rates were set for FY 2025-26 by the Finance Act, 2025 and continue for tax year 2026-27, when section 115BAC of the 1961 Act gave way to the Income-tax Act, 2025, section 202. You give up most deductions in exchange for the lower rates.
Quick facts
Bands
7, from nil to 30%Nil band
Up to ₹4,00,00030% applies
Above ₹24,00,000Rebate
Up to ₹60,000, so nil tax up to ₹12 lakhStandard deduction
₹75,000 on salary or pensionHighest surcharge
25%Law
Section 115BAC (FY 2025-26); section 202 (tax year 2026-27)
New regime tax slab rates for FY 2025-26 and tax year 2026-27
| Slice of taxable income | Rate | Running total at top of slice |
|---|---|---|
| First ₹4 lakh | 0% | ₹0 |
| Next ₹4 lakh (to ₹8 lakh) | 5% | ₹20,000 |
| Next ₹4 lakh (to ₹12 lakh) | 10% | ₹60,000 |
| Next ₹4 lakh (to ₹16 lakh) | 15% | ₹1,20,000 |
| Next ₹4 lakh (to ₹20 lakh) | 20% | ₹2,00,000 |
| Next ₹4 lakh (to ₹24 lakh) | 25% | ₹3,00,000 |
| Anything beyond ₹24 lakh | 30% | ₹3,00,000 plus 30% of the extra |
The running total column is a shortcut. If your taxable income is ₹20 lakh, tax before cess is ₹2,00,000. For ₹30 lakh, it is ₹3,00,000 plus 30% of ₹6 lakh, which is ₹4,80,000. Age does not change any band here. A pensioner of 82 uses the same table as a graduate of 22.
How the slabs changed from FY 2024-25
| Feature | FY 2024-25 | FY 2025-26 onward |
|---|---|---|
| Zero rate slice | Up to ₹3 lakh | Up to ₹4 lakh |
| Number of bands | 6 | 7 |
| 30% starts above | ₹15 lakh | ₹24 lakh |
| Rebate | Up to ₹25,000, income up to ₹7 lakh | Up to ₹60,000, income up to ₹12 lakh |
| Standard deduction | ₹75,000 | ₹75,000 |
The wider bands cut tax for almost everyone in this regime. If you are filing a belated or revised return for FY 2024-25, the older column still applies to that year. For tax year 2026-27, the Finance Act, 2026 kept the FY 2025-26 rates.
Two worked examples
Salary of ₹12.6 lakh. Ravi, a bank clerk, earns ₹12,60,000. Taxable income is ₹12,60,000 minus ₹75,000 = ₹11,85,000. Slab tax is ₹20,000 plus 10% of ₹3,85,000 (₹38,500) = ₹58,500. The rebate of up to ₹60,000 covers all of it. Tax payable: nil.
Consultant with ₹25 lakh taxable income. First ₹24 lakh: ₹3,00,000 from the running total. The last ₹1 lakh at 30%: ₹30,000. Tax ₹3,30,000, cess at 4% ₹13,200, total ₹3,43,200. No surcharge, as income is under ₹50 lakh.
What you can still claim in the new income tax regime
| Allowed | Not allowed |
|---|---|
| Standard deduction of ₹75,000 on salary or pension | 80C items such as PPF, life cover, ELSS and tuition fees |
| Employer's NPS contribution under 80CCD(2) | 80D health insurance premium |
| Deduction for family pension (up to ₹25,000) | HRA and LTA exemptions |
| Interest on a let out property's loan against its rent | Interest on a self occupied home loan |
| Agniveer Corpus Fund under 80CCH | Professional tax and 80G donations |
If your deductions are large, the old regime may still cost less. The regime comparison calculator shows the cheaper option on your own numbers, and the deductions list explains each item.
Section 115BAC, section 202 and switching regimes
Section 115BAC of the Income-tax Act, 1961 created the new regime and made it the default from FY 2023-24. For income earned from 1 April 2026, the Income-tax Act, 2025 carries the same regime in section 202, keeping both the slabs and the list of barred deductions.
- Salaried and pension income only: you can pick either regime each year when you file the return. Tell your employer at the start of the year so TDS is right.
- Business or professional income: leaving the new regime needs a form filed before the return due date (Form 10-IEA for FY 2025-26). You can return to the new regime only once after that.
All pages on slabs and rates
| Guide | Use it for |
|---|---|
| Income tax slab (home) | Both regimes in one view, with the slab finder |
| Old regime slabs | Bands of 5%, 20% and 30% with deductions kept |
| Old vs new regime calculator | Your income run through both regimes at once |
| Senior citizen slab | What changes for pensioners at 60 and 80 |
| Surcharge rates | How the 25% ceiling helps high earners in this regime |
| Rebate under 87A | The ₹60,000 rebate and relief just above ₹12 lakh |
| Professional tax slab | The state levy on salary that this regime does not let you deduct |
| Tax free income limit | Income levels that leave you with nothing to pay |
| Business and company tax rates | Firms, LLPs and companies follow separate flat rates |
| HUF tax slab | Why a family HUF on these slabs still pays tax at ₹12 lakh |
| Marginal relief | The cap on tax just past a threshold |
| Health and education cess | The 4% charge added at the end |
Mistakes with the new tax slab
| Error | Correction |
|---|---|
| Claiming 80C or 80D in the new regime on the return | Drop them, or opt for the old regime if they are worth more |
| Thinking income of ₹12.5 lakh means 15% on everything | Only the ₹50,000 above ₹12 lakh is in the 15% band, and marginal relief may lower the tax further |
| Taking the rebate against 111A or 112A gains | Pay tax on those gains at their own rates |
| Not telling the employer your regime | Give a declaration early, or TDS defaults to the new regime |
This is general information on the default tax regime, not advice for your return. Rates and rules can change each Budget; check the e-filing portal or ask a chartered accountant.
Sources we checked
- Income-tax Act, 1961, section 115BAC
- Income-tax Act, 2025, section 202
- Income-tax Act, 2025, section 156
- Finance Act, 2025, First Schedule
Frequently asked questions
What is the new tax slab for FY 2025-26?
Nil up to ₹4 lakh, 5% from ₹4 to 8 lakh, 10% from ₹8 to 12 lakh, 15% from ₹12 to 16 lakh, 20% from ₹16 to 20 lakh, 25% from ₹20 to 24 lakh and 30% above ₹24 lakh. Add 4% cess to the tax.
Is the new income tax slab for AY 2026-27 the same as FY 2025-26?
Yes. AY 2026-27 is the assessment year for income of FY 2025-26, so they describe the same slabs. Tax year 2026-27 under the 2025 Act also uses these rates.
What is section 115BAC of the Income Tax Act?
This is the 1961 Act section that sets out the new regime: the lower slab rates and the list of deductions you give up. From tax year 2026-27 section 202 of the Income-tax Act, 2025 carries these rules forward.
Is the new regime compulsory?
No, but it is the default. If you do nothing, your tax is worked out under it. Salaried people can choose the old regime when filing; people with business income must file a separate opt out form in time.
Do senior citizens get a higher limit in the new regime?
No. The new regime has one table for all ages. The higher nil limits of ₹3 lakh and ₹5 lakh exist only in the old regime.