Income Tax Slabs FY 2025-26 — Old vs New Regime
Complete income tax slab tables for the financial year 2025-26 (assessment year 2026-27) under both the Old and New tax regimes. Includes surcharge brackets, Section 87A rebate, and standard deduction details.
Last verified: 23 February 2026, 5:00 PM IST· Source: Income Tax Department
Union Budget 2026-27 Update
The Union Budget for FY 2026-27 was presented on 1 February 2026. The tables below reflect the current FY 2025-26 slabs. We will update this page with FY 2026-27 rates once the Finance Act 2026 is enacted. Use our Tax Regime Comparator to calculate your tax under both regimes.
Compare your tax under both regimes
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New Tax Regime Slabs — FY 2025-26
The New Regime is the default tax regime. Standard deduction of ₹75,000 for salaried individuals. Section 87A rebate available for taxable income up to ₹12 lakh.
| Income Range | Tax Rate |
|---|---|
| Up to ₹4L | Nil |
| ₹4L – ₹8L | 5% |
| ₹8L – ₹12L | 10% |
| ₹12L – ₹16L | 15% |
| ₹16L – ₹20L | 20% |
| ₹20L – ₹24L | 25% |
| Above ₹24L | 30% |
Old Tax Regime Slabs — FY 2025-26
The Old Regime must be explicitly opted into. Allows deductions under 80C (₹1.5L), 80D, HRA, home loan interest (Section 24), NPS (80CCD), and more. Standard deduction of ₹50,000 for salaried individuals.
| Income Range | Tax Rate |
|---|---|
| Up to ₹2.5L | Nil |
| ₹2.5L – ₹5L | 5% |
| ₹5L – ₹10L | 20% |
| Above ₹10L | 30% |
Surcharge Brackets
Surcharge is levied on the total income tax amount (not on income) for higher incomes. 4% Health & Education Cess applies on tax + surcharge.
| Total Income | Surcharge (New Regime) | Surcharge (Old Regime) |
|---|---|---|
| Up to ₹50 lakh | Nil | Nil |
| ₹50 lakh – ₹1 crore | 10% | 10% |
| ₹1 crore – ₹2 crore | 15% | 15% |
| ₹2 crore – ₹5 crore | 25% | 25% |
| Above ₹5 crore | 25% (capped) | 37% |
Key Differences: Old vs New Regime
Section 87A Rebate
Under the New Regime, Section 87A provides a full rebate for taxable income up to ₹12 lakh — effectively waiving up to ₹60,000 in tax. For salaried individuals, after the ₹75,000 standard deduction, gross salary up to ₹12.75 lakh results in zero tax.
Under the Old Regime, the rebate applies for taxable income up to ₹5 lakh (max rebate ₹12,500). After the ₹50,000 standard deduction, gross salary up to ₹5.50 lakh is effectively tax-free — before considering any 80C/80D deductions.
Standard Deduction
New Regime: ₹75,000 (increased from ₹50,000 in Budget 2024). Old Regime: ₹50,000 (unchanged). This is a flat deduction from salary — no proof required.
Deductions & Exemptions
The Old Regime allows deductions under Sections 80C, 80D, 80E, 24(b), HRA exemption (Section 10(13A)), NPS (80CCD), and others. The New Regime allows only the ₹75,000 standard deduction and employer NPS contribution under 80CCD(2). If your total deductions under the Old Regime exceed approximately ₹3.75–4.25 lakh (depending on income level), the Old Regime may result in lower tax.
Which Should You Choose?
Use our Tax Regime Comparator calculator to input your exact income, deductions, and exemptions — it will show you which regime saves more, down to the rupee.
Data Sources
- Income Tax Department — Tax Slabs (FY 2025-26) — incometaxindia.gov.in
- Union Budget 2024-25 — Finance Act (July 2024) — www.indiabudget.gov.in
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Disclaimer: Rates shown are sourced from official bank websites and public rate cards. They may change without notice based on RBI policy, bank-specific decisions, or customer profile (credit score, loan amount, relationship). Always verify current rates directly with the bank or lender before making financial decisions. RupayWise does not sell, distribute, or recommend any financial products.
Frequently Asked Questions
What are the new income tax slabs for FY 2025-26?
Under the New Tax Regime for FY 2025-26: income up to ₹4 lakh is nil, ₹4–8 lakh at 5%, ₹8–12 lakh at 10%, ₹12–16 lakh at 15%, ₹16–20 lakh at 20%, ₹20–24 lakh at 25%, and above ₹24 lakh at 30%. With the standard deduction of ₹75,000 and Section 87A rebate, salaried individuals with income up to ₹12.75 lakh pay zero tax under the New Regime.
Which is better — Old or New Tax Regime for FY 2025-26?
The New Regime is better for most taxpayers unless you claim significant deductions (80C, 80D, HRA, home loan interest). Generally, if your total deductions exceed ₹3.75–4.25 lakh (beyond the standard deduction), the Old Regime may save you more. Use our Tax Regime Comparator calculator to check with your exact numbers.
What is the standard deduction for FY 2025-26?
The standard deduction is ₹75,000 under the New Tax Regime and ₹50,000 under the Old Tax Regime for FY 2025-26. This is a flat deduction from salary income — no proof or investment required. It was increased from ₹50,000 to ₹75,000 for the New Regime in the Union Budget 2024.
What is the Section 87A rebate for FY 2025-26?
Under the New Tax Regime, Section 87A provides a full tax rebate for residents with taxable income up to ₹12 lakh (tax liability up to ₹60,000 is waived). Under the Old Tax Regime, the rebate applies for taxable income up to ₹5 lakh (tax liability up to ₹12,500 is waived). This effectively makes income up to ₹12.75 lakh (New) or ₹5.50 lakh (Old) tax-free for salaried individuals after standard deduction.
When does surcharge apply on income tax?
Surcharge applies on the total tax amount for higher incomes: 10% for income ₹50 lakh–₹1 crore, 15% for ₹1–2 crore, 25% for ₹2–5 crore. Under the New Regime, the maximum surcharge is capped at 25% (the 37% bracket doesn't apply). Under the Old Regime, income above ₹5 crore attracts 37% surcharge. Additionally, 4% health and education cess applies on tax + surcharge.
How is income tax calculated with marginal relief?
Marginal relief ensures that your total tax (including surcharge) does not exceed the additional income that pushed you into a higher surcharge bracket. For example, if your income is ₹50,10,000 (just above ₹50 lakh), the 10% surcharge on the full tax would result in a disproportionately higher tax compared to someone earning ₹50,00,000. Marginal relief caps your additional tax to the additional income (₹10,000 in this case). The same logic applies at ₹1 crore, ₹2 crore, and ₹5 crore surcharge thresholds. This is calculated automatically by ITR filing software and our tax regime calculator.
What is Health and Education Cess and how is it calculated?
Health and Education Cess is a 4% levy calculated on (income tax + surcharge, if any). It applies uniformly to all taxpayers under both Old and New regimes. For example, if your income tax is ₹1,00,000 with no surcharge, the cess is ₹4,000, making total tax ₹1,04,000. If surcharge of ₹10,000 applies, cess is calculated on ₹1,10,000, resulting in ₹4,400 cess. The cess funds are earmarked for healthcare and education programs. Unlike surcharge, cess is not deductible as a business expense.
Are capital gains (LTCG/STCG) taxed at slab rates or special rates?
Capital gains have their own tax rates separate from the income tax slabs. Equity LTCG (holding > 12 months) is taxed at 12.5% above ₹1.25 lakh per year. Equity STCG (holding < 12 months) is taxed at 20%. Debt fund gains follow slab rates. Property LTCG (holding > 24 months) is taxed at 12.5% without indexation (or 20% with indexation for acquisitions before July 2024, whichever is lower). Capital gains are added to total income for surcharge calculation purposes but are taxed at their specific rates, not the regular slab rates.
Do NRIs pay income tax in India and which regime applies?
NRIs are taxed in India on income earned or received in India — this includes salary for work performed in India, rental income from Indian property, capital gains from Indian assets, and interest on Indian bank accounts. NRIs can choose between Old and New Tax Regime just like residents. However, the Section 87A rebate does NOT apply to NRIs under the New Regime for incomes up to ₹12 lakh. NRI TDS rates on various income types differ — for example, 30% TDS on rent payments to NRIs (vs 10% to residents). NRIs should file ITR to claim refunds on excess TDS deducted.
How do I calculate tax if I have both salary and freelance income?
If you have salary income and freelance or business income, both are added to compute your gross total income. Salary income gets the standard deduction (₹50K/₹75K). Freelance income allows you to deduct business expenses (rent, software, internet, travel) to arrive at net profit under 'Profits and Gains from Business/Profession'. Under presumptive taxation (Section 44ADA for professionals, 44AD for businesses), you can declare 50% of gross receipts as income if total receipts are under ₹50 lakh (professionals) or ₹2 crore (businesses). Your total income (salary + freelance profit) is then taxed under the applicable slab rates of your chosen regime.
What happens if I do not file my income tax return by the deadline?
The due date for individual ITR filing is 31 July of the assessment year (e.g., 31 July 2026 for FY 2025-26). Filing after this date but before 31 December attracts a late fee of ₹5,000 (₹1,000 if total income is under ₹5 lakh). Filing after 31 December is called a 'revised belated return' and may attract penalties. Beyond fees, late filing means you cannot carry forward certain losses (capital and business losses), you lose interest on refund for the delayed period, and the Section 87A rebate may be denied for belated returns under the New Regime. Filing on time is strongly recommended to avoid complications.
Related Data
Related Resources
Calculators
- Tax Regime — Old vs New tax regime — see which saves more with all deductions: 80C, 80D, HRA, NPS & more.