Tax Guide · 17 April 2026
Income Tax Slabs FY 2026-27 (New Regime)
Salaried Indians pay zero income tax up to ₹12,75,000 in FY 2026-27 (AY 2027-28) under the New Tax Regime. That ceiling combines the ₹75,000 standard deduction with the ₹60,000 Section 87A rebate. Slabs: nil up to ₹4 lakh, 5% to ₹8 lakh, 10% to ₹12 lakh, scaling to 30% above ₹24 lakh. New regime is the default; opt into the old regime via Form 10-IEA.
By Mr. Harshal Harshe
Last reviewed
17 May 2026
In this section
Answers
- Income Tax Slabs FY 2026-27 (New Regime)
- What Fields Must a GST Tax Invoice Carry Under Section 31 and Rule 46?
- Do I Have to Issue e-Invoices? The ₹5 Crore GST Threshold for FY 2026-27
- GST Reverse Charge: When Does a Small Business Pay GST for Its Supplier?
- Pakka Bill vs Kaccha Bill: Which One Is a Legally Valid GST Invoice?
- No HRA from Employer? Claim Rent Deduction Under Section 80GG
- Employer Has Not Issued Form 16 by 15 June: Can You Still File Your ITR?
- Form 16 vs Form 26AS vs AIS: What Does Each One Show, and Which Do You Use to File Your ITR?
- How Do You File ITR-1 (Sahaj) for AY 2026-27, Step by Step?
- Form 26AS Is Now Form 168: What Changed in April 2026?
New Tax Regime Slabs (FY 2026-27 / AY 2027-28)
HRAReceipt.in maintains this FY 2026-27 slab reference, drawn from the Finance Act 2025 text and the Section 115BAC statutory framework. Under Section 87A, salaried Indians with taxable income up to Rs. 12,75,000 pay zero income tax in FY 2026-27. Budget 2025 raised the rebate from Rs. 25,000 to Rs. 60,000 and pushed the tax-free ceiling from Rs. 7 lakh to Rs. 12 lakh. The slabs below apply to resident individuals (including senior citizens) under Section 115BAC of the Income Tax Act for the financial year starting 1 April 2026:
• Rs. 0 – Rs. 4,00,000: Nil
• Rs. 4,00,001 – Rs. 8,00,000: 5%
• Rs. 8,00,001 – Rs. 12,00,000: 10%
• Rs. 12,00,001 – Rs. 16,00,000: 15%
• Rs. 16,00,001 – Rs. 20,00,000: 20%
• Rs. 20,00,001 – Rs. 24,00,000: 25%
• Above Rs. 24,00,000: 30%
A Health and Education Cess of 4% applies on the tax payable. Surcharge applies above Rs. 50 lakh.
| Income range | Tax rate |
|---|---|
| Rs. 0 – Rs. 4,00,000 | Nil |
| Rs. 4,00,001 – Rs. 8,00,000 | 5% |
| Rs. 8,00,001 – Rs. 12,00,000 | 10% |
| Rs. 12,00,001 – Rs. 16,00,000 | 15% |
| Rs. 16,00,001 – Rs. 20,00,000 | 20% |
| Rs. 20,00,001 – Rs. 24,00,000 | 25% |
| Above Rs. 24,00,000 | 30% |
Section 87A Rebate: Tax-Free up to Rs. 12 Lakh
Under the new regime, the Section 87A rebate is Rs. 60,000. Resident individuals with taxable income up to Rs. 12,00,000 pay zero tax. With the standard deduction of Rs. 75,000 for salaried employees, the tax-free ceiling moves to Rs. 12,75,000 of gross salary.
The rebate applies only to resident individuals (not HUFs, NRIs, or non-residents) and only on income taxed at slab rates. Capital gains taxed under special rates do not benefit.
Standard Deduction
Salaried individuals and pensioners get a flat standard deduction of Rs. 75,000 under the new tax regime (raised from Rs. 50,000 in Budget 2024). The deduction applies on its own. No proof needed. Family pensioners get a Rs. 25,000 deduction.
Under the new regime, allowance-level exemptions like HRA, LTA, and transport / conveyance allowance are not separately exempt. The standard deduction subsumes them. Under the old regime, transport allowance up to Rs. 1,600/month was historically exempt. The conveyance receipt still serves as proof of payment for employer reimbursement.
Old Tax Regime: Still Available
The old tax regime continues to exist as an opt-in. Slabs (FY 2026-27, no change from prior years):
• Rs. 0 – Rs. 2,50,000: Nil
• Rs. 2,50,001 – Rs. 5,00,000: 5%
• Rs. 5,00,001 – Rs. 10,00,000: 20%
• Above Rs. 10,00,000: 30%
The Section 87A rebate under the old regime is Rs. 12,500 (income up to Rs. 5 lakh tax-free). Standard deduction is Rs. 50,000.
HRA exemption (Section 10(13A)), Section 80C (Rs. 1.5 lakh), 80D, home loan interest under Section 24, and most other deductions are available only under the OLD regime.
| Income range | Tax rate |
|---|---|
| Rs. 0 – Rs. 2,50,000 | Nil |
| Rs. 2,50,001 – Rs. 5,00,000 | 5% |
| Rs. 5,00,001 – Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
Which Regime Should You Pick?
Rule of thumb:
• If your total deductions (HRA + 80C + home loan interest + 80D + standard deduction) exceed roughly Rs. 4–5 lakh, the OLD regime is usually better.
• If you have minimal deductions, the NEW regime wins on the lower rates and Rs. 12 lakh rebate ceiling.
• Run both calculations every year. The breakeven shifts as the new regime slabs widen.
Don't guess. Enter your salary, rent, and deductions in our Tax Optimization Calculator to see the exact rupee tax under both regimes side-by-side. The calculator includes the FY 2026-27 8-city HRA list (Rule 279), Section 87A rebate, standard deduction, and Section 89(1) salary-arrears relief.
The new tax regime is the default. You must opt into the old regime each year (using Form 10-IEA if you have business income).
What Changed vs FY 2024-25
Budget 2025 (announced February 2025, effective FY 2025-26 and continuing FY 2026-27) made three changes to the new regime:
1. Slabs compressed: lowest taxable bracket starts at Rs. 4 lakh (was Rs. 3 lakh) and the highest 30% rate starts at Rs. 24 lakh (was Rs. 15 lakh).
2. Rebate u/s 87A raised to Rs. 60,000, pushing the effective tax-free ceiling from Rs. 7 lakh to Rs. 12 lakh.
3. Salaried tax-free ceiling now Rs. 12.75 lakh after the Rs. 75,000 standard deduction.
The old tax regime numbers stayed the same.
TDS and Salary Slips
Your employer deducts TDS based on the regime you declare in your investment proofs. If you have not chosen the old regime, TDS is computed under the new regime by default. Check that your salary slip and Form 16 reflect the regime you filed under. See our guide on reconciling salary slip and Form 16 for the line-by-line checks. Mismatches are a common cause of refund delays.
Generate compliant salary slips showing your regime, slab-wise tax, and TDS deductions.