Income Tax Slabs for FY 2026-27 (AY 2027-28): Old vs New Regime

Every salaried person in India has to choose between two tax systems: the new regime (the default) and the old regime. Here are the rates for FY 2026-27 (assessment year 2027-28) for a resident individual.

New regime slabs

• Up to ₹4,00,000: nil
• ₹4,00,001 to ₹8,00,000: 5%
• ₹8,00,001 to ₹12,00,000: 10%
• ₹12,00,001 to ₹16,00,000: 15%
• ₹16,00,001 to ₹20,00,000: 20%
• ₹20,00,001 to ₹24,00,000: 25%
• Above ₹24,00,000: 30%

Each rate applies only to the income inside its band. The standard deduction is ₹75,000 for salaried people and pensioners, and the only other common deduction is your employer’s NPS contribution under 80CCD(2).

Section 87A rebate in the new regime

If your taxable income is ₹12,00,000 or less, you get a rebate of up to ₹60,000, which brings your tax to zero. With the ₹75,000 standard deduction, a salaried person with a salary of up to ₹12,75,000 pays no income tax. If you earn a little more than ₹12 lakh, marginal relief makes sure your tax is never more than the income above ₹12 lakh.

Old regime slabs

• Under 60: nil up to ₹2,50,000; 5% to ₹5,00,000; 20% to ₹10,00,000; 30% above.
• 60 to 79: nil up to ₹3,00,000; 5% to ₹5,00,000; 20% to ₹10,00,000; 30% above.
• 80 and above: nil up to ₹5,00,000; 20% to ₹10,00,000; 30% above.

The old regime has a ₹50,000 standard deduction and a 87A rebate of up to ₹12,500 if taxable income is ₹5,00,000 or less. In return you can claim deductions such as 80C, 80D, HRA and home loan interest.

Surcharge and cess

• Surcharge: 10% above ₹50 lakh, 15% above ₹1 crore and 25% above ₹2 crore. In the old regime it rises to 37% above ₹5 crore, while the new regime stops at 25%.
• Health and education cess: 4% on the tax plus surcharge, in both regimes.

Example: ₹15 lakh salary

Taxable income in the new regime is ₹15,00,000 − ₹75,000 = ₹14,25,000. Tax on slabs is ₹20,000 + ₹40,000 + ₹33,750 = ₹93,750. Add 4% cess (₹3,750) and the total is ₹97,500.