Income Tax Slabs in India FY 2025-26

India follows a progressive income tax system, where higher income is taxed at higher rates. Every Union Budget, the government announces updated Income Tax Slabs for the new financial year.
Taxpayers can choose between:

• New Tax Regime (lower tax rates, limited deductions)

• Old Tax Regime (higher tax rates, but multiple deductions and exemptions)

Being aware of the latest income tax rates for FY 2025-26 helps you plan your savings, avoid last-minute stress, and stay tax compliant.

Income Tax Slabs – FY 2025-26 (AY 2026-27)

1. New Tax Regime (Default)

The New Regime comes with lower rates but removes most exemptions.
For individuals below 60 years:

Note: Salaried employees and pensioners get a standard deduction of ₹50,000.

2. Old Tax Regime

The Old Regime allows popular deductions under Section 80C, 80D, HRA, LTA, etc., but has higher rates.

Tax Slabs for Senior Citizens

Senior Citizens (Age 60–80 years) – Old Regime

Super Senior Citizens (Above 80 years) – Old Regime

Note: In the New Regime, the same slab rates apply to all, regardless of age.

Surcharge & Cess on Income Tax

• Health & Education Cess: 4% of total tax payable

• Surcharge: Levied on high-income taxpayers

Rebate Under Section 87A

• New Regime: No tax if taxable income ≤ ₹7 lakh

• Old Regime: No tax if taxable income ≤ ₹5 lakh
  In both cases, a rebate of up to ₹12,500 is available, reducing your final tax liability to zero.

New Regime vs Old Regime – Which is Better for FY 2025-26?

• New Regime: Ideal for those with fewer deductions and who prefer simpler tax filing.

• Old Regime: Best for those who claim higher deductions (e.g., investments under Section 80C, insurance premiums, HRA).

Example – Tax Calculation (New Regime)

If your annual income is ₹12,00,000 in FY 2025-26:

• ₹0 – ₹3,00,000 → Nil

• ₹3,00,001 – ₹6,00,000 → 5% = ₹15,000

• ₹6,00,001 – ₹9,00,000 → 10% = ₹30,000

• ₹9,00,001 – ₹12,00,000 → 15% = ₹45,000

Total Tax: ₹90,000 + 4% cess = ₹93,600

Frequently Asked Questions (FAQs) on Income Tax Slabs 2025-26

1. What are the income tax slabs for FY 2025-26?

For FY 2025-26 (AY 2026-27), the New Regime has 6 slabs ranging from 0% for income up to ₹3 lakh to 30% for income above ₹15 lakh. The Old Regime starts at 0% for up to ₹2.5 lakh and goes up to 30% for income above ₹10 lakh.

2. Which tax regime is better in 2025-26 – new or old?

The New Regime is better for individuals with fewer deductions and who want lower rates and simpler filing. The Old Regime is better if you claim significant deductions under Section 80C, 80D, HRA, LTA, and other exemptions.

3. Is income up to ₹7 lakh tax-free in 2025-26?

Yes, under the New Regime, if your taxable income is up to ₹7 lakh, you can claim the Section 87A rebate, making your total tax payable zero.
In the Old Regime, this limit is ₹5 lakh.

4. How can I calculate my income tax for FY 2025-26?

1. Add all sources of income (salary, business, rent, interest, etc.).

2. Subtract eligible deductions (only under Old Regime).

3. Apply the applicable slab rates.

4. Add surcharge and cess if applicable.

You can also use an income tax calculator for accurate results.

5. What is the surcharge on income tax for FY 2025-26?

The surcharge rates are:

• 10% for income ₹50 lakh–₹1 crore

• 15% for ₹1 crore–₹2 crore

• 25% for ₹2 crore–₹5 crore

• 37% for above ₹5 crore

A 4% Health & Education Cess applies on the total tax amount.

6. Do senior citizens have higher exemption limits in 2025-26?

Yes, under the Old Regime, senior citizens (60–80 years) get ₹3 lakh as the basic exemption, and super senior citizens (above 80 years) get ₹5 lakh.
In the New Regime, the same rates apply to all age groups.

7. Can I switch between old and new tax regimes every year?

• Salaried individuals can switch between regimes every year.

• Self-employed individuals can switch only once (unless you stop earning from business/profession).

8. Are deductions like 80C and 80D available in the new tax regime?

No, most deductions and exemptions like 80C (Investments), 80D (Medical Insurance), HRA, and LTA are not available in the New Regime, except the standard deduction of ₹50,000 for salaried individuals and pensioners.