For FY 2025-26 (AY 2026-27), the New Tax Regime is the default. Individuals with income up to ₹12 lakh pay zero income tax under the new regime due to the Section 87A rebate (effective from Budget 2025). The old regime remains optional for those with higher deductions.
New Tax Regime Slabs (FY 2025-26) — Default
| Income Slab | Tax 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% |
Info
Section 87A Rebate (New Regime): If your total income ≤ ₹12 lakh, the tax liability is completely rebated. Add the ₹75,000 standard deduction — salaried individuals with CTC up to ₹12.75 lakh pay ZERO income tax under the new regime.
Old Tax Regime Slabs — Optional
| Income Slab | Tax Rate |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
New vs Old Regime — When to Choose Which
| Choose New Regime if... | Choose Old Regime if... |
|---|---|
| Income ≤ ₹12 Lakh (zero tax after rebate) | Home loan interest > ₹2 lakh/year |
| Fewer deductions (no HRA, 80C, 80D) | Large 80C investments (PPF, ELSS, LIC) |
| Simpler filing with less documentation | HRA + LTA claims are substantial |
| Salary income with no business income | Total deductions > ₹3.75 lakh/year |
Note
Standard Deduction: ₹75,000 under New Regime (from FY 2024-25) and ₹50,000 under Old Regime. Deducted from salary/pension income before computing tax.