Income tax in India is worked out on slabs: each slice of your income is taxed at its own rate, and you never pay the top rate on all of it. On top of that come a rebate, a surcharge on very high incomes and a 4% health and education cess.
Below are the FY 2026-27 slabs for both regimes, how the rebate and marginal relief work, and examples you can check against the calculator.
Income tax slabs for FY 2026-27
Budget 2026 kept the slabs unchanged from FY 2025-26. The new regime is the default; you have to choose the old regime if you want it.
| Taxable income (new regime) | 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% |
| Taxable income (old regime) | 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% |
How the calculation works
Taxable income = total income − standard deduction − other allowed deductionsSlab tax = sum of (income in each slab × that slab's rate)Tax = slab tax − rebate + surchargeTotal tax = tax × 1.04 (4% health and education cess)The ₹12 lakh rebate and marginal relief
In the new regime, if taxable income is ₹12 lakh or less, the rebate wipes out the tax completely. Just above ₹12 lakh, marginal relief makes sure the tax is never more than the income above ₹12 lakh, so earning ₹10,000 more never costs you more than ₹10,000 in tax.
Surcharge
Income above ₹50 lakh pays a surcharge on the tax: 10% above ₹50 lakh, 15% above ₹1 crore and 25% above ₹2 crore. In the old regime there's a 37% band above ₹5 crore; the new regime caps it at 25%. Marginal relief applies at each step too.
Worked examples
Example: Salary of ₹15 lakh, new regime
Taxable income = ₹15,00,000 − ₹75,000 = ₹14,25,000.
Slabs: 5% of ₹4 lakh = ₹20,000; 10% of ₹4 lakh = ₹40,000; 15% of ₹2,25,000 = ₹33,750. Total ₹93,750.
Cess at 4% = ₹3,750. Total tax: ₹97,500, about 6.5% of salary.
Example: Taxable income of ₹12,25,000, new regime (marginal relief)
Normal slab tax would be ₹63,750.
Income above ₹12 lakh is only ₹25,000, so tax is limited to ₹25,000.
With 4% cess, total tax: ₹26,000, not ₹66,300.
Example: Salary of ₹25 lakh, new regime
Taxable income = ₹24,25,000. Slab tax = ₹3,07,500. Cess = ₹12,300.
Total tax: ₹3,19,800, an effective rate of about 13%.
Which deductions can you claim?
In the new regime most deductions are gone. Salaried people still get the ₹75,000 standard deduction and the deduction for the employer's NPS contribution. Interest on a home loan for a let-out property can still reduce rental income.
In the old regime you can claim, among others:
- Section 80C, up to ₹1.5 lakh: EPF, PPF, ELSS funds, life insurance, home loan principal, children's tuition fees.
- Section 80D: health insurance premiums for yourself, family and parents.
- HRA exemption if you pay rent (see the HRA calculator).
- Home loan interest on a self-occupied house, up to ₹2 lakh.
- Professional tax paid.
The Income-tax Act, 2025 renumbered many sections from April 2026, but the familiar names are still used everywhere. Whether the old regime is worth it depends on how much you can claim; the old vs new regime calculator finds the break-even point.
Paying the tax: TDS and advance tax
For salaried people, the employer deducts tax every month (TDS) based on the regime you declare. If you have other income, such as interest, rent, capital gains or freelance work, and your remaining tax is ₹10,000 or more, you have to pay advance tax in instalments during the year to avoid interest.
This calculator is for resident individuals under 60. Senior citizens have higher old-regime exemption limits, and capital gains are taxed at special rates not covered here.
How to use this calculator
- Choose whether your income is salary or freelance/other income.
- Enter your annual income.
- Fill in old-regime deductions if you have them, such as 80C and health insurance.
- Compare the two regimes.
FAQs
Did Budget 2026 change the tax slabs?
No. The slabs for FY 2026-27 are the same as FY 2025-26 in both regimes.
Which regime is the default?
The new regime. You need to choose the old regime if you want it.
What is marginal relief?
If your income is just above ₹12 lakh in the new regime, your tax can't be more than the amount by which you cross ₹12 lakh. The same idea applies to surcharge thresholds.
Sources
- Business Today: tax slabs for FY 2026-27 after Budget 2026
- Income Tax Department: tax rates and surcharge
- ClearTax: Income-tax Rules 2026 and HRA cities
- ClearTax: Section 44ADA presumptive tax
- ThePrint (PTI): EPF rate of 8.25% for 2025-26 ratified
Results are estimates for resident individuals under 60 and aren't tax, legal or financial advice. For your own return, check with a chartered accountant. Spotted a mistake? Tell us.