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Income Tax Slabs for FY 2025-26 (AY 2026-27) — New Regime
The new tax regime under Section 115BAC is the default regime for FY 2025-26. It uses wider slabs, a larger salary standard deduction and a strong Section 87A rebate for resident individuals.
New tax regime slab rates
| Total income slab | Tax rate |
|---|---|
| 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% |
How Section 87A makes ₹12 lakh tax-free
A resident individual with total income up to ₹12,00,000 can claim a rebate up to ₹60,000, making normal slab-rate tax effectively nil. The rebate excludes special-rate income such as capital gains. For salaried taxpayers, the ₹75,000 standard deduction means salary up to ₹12.75 lakh can result in zero tax under the new regime. Marginal relief applies just above ₹12L.
Standard deduction, cess and surcharge
Salaried taxpayers can claim a standard deduction of ₹75,000 under Section 16(ia). Health and Education Cess is 4% on tax plus surcharge.
| Income level | New regime surcharge |
|---|---|
| Above ₹50L | 10% |
| Above ₹1cr | 15% |
| Above ₹2cr | 25% |
The 37% top surcharge rate is removed under the new regime, so the maximum surcharge is 25%. Surcharge on income under Sections 111A, 112A and dividends is capped at 15%. Marginal relief applies at each threshold.
Worked example: ₹15L salary
For a salary of ₹15,00,000, first reduce the ₹75,000 standard deduction. Total income becomes ₹14,25,000. Slab tax is ₹60,000 on ₹4-12L plus 15% on ₹2,25,000, or ₹33,750. Total tax before cess is ₹93,750, and 4% cess is ₹3,750, making ₹97,500.
Special-rate income note
Capital gains and other special-rate income may be taxed separately and may not receive the full Section 87A benefit. Read the capital gains tax guide before filing, and compare regimes in the new vs old tax regime guide.
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What are the new tax regime slabs for FY 2025-26?
The new regime slabs are Nil up to ₹4,00,000, 5% for ₹4-8L, 10% for ₹8-12L, 15% for ₹12-16L, 20% for ₹16-20L, 25% for ₹20-24L and 30% above ₹24L.
Is income up to ₹12 lakh tax-free in the new regime?
For a resident individual, Section 87A gives rebate up to ₹60,000 when total income is up to ₹12,00,000, excluding special-rate income such as capital gains.
What is the standard deduction for salaried taxpayers in the new regime?
The standard deduction for salary income under Section 16(ia) is ₹75,000 in the new regime for FY 2025-26.
Does cess apply after rebate and surcharge?
Health and Education Cess is 4% on tax plus surcharge. If rebate makes normal tax nil, cess on that nil tax is also nil.