The short answer
How much income tax will I pay in FY 2026–27?
Under the new regime (the default), salaried people pay no tax on salary up to ₹12.75 lakh: the ₹75,000 standard deduction plus the Section 87A rebate cover the first ₹12 lakh of taxable income. Above that, slabs run from 5% to 30%. The old regime has higher rates but allows deductions such as 80C, 80D, HRA and home loan interest. Budget 2026 kept both regimes' slabs unchanged, and the new Income-tax Act, 2025 took effect on 1 April 2026 with the same rates.
New regime vs old regime: tax by salary
| Gross salary | New regime tax | Old regime tax (₹2 lakh deductions) | Lower | Monthly in-hand (new) |
|---|---|---|---|---|
| ₹6,00,000 | ₹0 | ₹0 | Same | ₹50,000 |
| ₹8,00,000 | ₹0 | ₹23,400 | New | ₹66,667 |
| ₹10,00,000 | ₹0 | ₹65,000 | New | ₹83,333 |
| ₹12,00,000 | ₹0 | ₹1,06,600 | New | ₹1,00,000 |
| ₹12,75,000 | ₹0 | ₹1,24,800 | New | ₹1,06,250 |
| ₹15,00,000 | ₹97,500 | ₹1,95,000 | New | ₹1,16,875 |
| ₹18,00,000 | ₹1,50,800 | ₹2,88,600 | New | ₹1,37,433 |
| ₹20,00,000 | ₹1,92,400 | ₹3,51,000 | New | ₹1,50,633 |
| ₹25,00,000 | ₹3,19,800 | ₹5,07,000 | New | ₹1,81,683 |
| ₹30,00,000 | ₹4,75,800 | ₹6,63,000 | New | ₹2,10,350 |
| ₹50,00,000 | ₹10,99,800 | ₹12,87,000 | New | ₹3,25,017 |
Includes 4% cess and surcharge. Old regime assumes ₹2 lakh of deductions (for example ₹1.5 lakh 80C + ₹50,000 NPS). Age below 60, no professional tax or PF.
Income tax slabs for FY 2026–27 (AY 2027–28)
New regime (Section 115BAC)
| 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% |
Standard deduction ₹75,000. Rebate up to ₹60,000 if taxable income is ₹12 lakh or less, with marginal relief just above.
Old regime (below 60)
| 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% |
Exemption limit ₹3 lakh for ages 60–79 and ₹5 lakh for 80+. Standard deduction ₹50,000. Rebate up to ₹12,500 if taxable income is ₹5 lakh or less.
Surcharge on tax: 10% above ₹50 lakh, 15% above ₹1 crore, 25% above ₹2 crore (and 37% above ₹5 crore in the old regime only). Health and education cess of 4% applies to tax plus surcharge in both regimes.
Which regime should you choose?
The new regime is better for most salaried people, and for everyone with taxable income up to ₹12 lakh. The old regime only wins if your deductions are large: the old regime needs deductions of more than about ₹5.44 lakh at a ₹15 lakh salary, ₹7.09 lakh at ₹20 lakh and ₹8 lakh at ₹25 lakh to come out ahead, for example by combining full 80C, NPS, 80D, a large HRA exemption and home loan interest. Salaried employees can switch regimes every year when filing the return; people with business income can switch back only once.
How the calculator works
New regime: taxable income = salary − ₹75,000 − professional tax. Old regime: taxable income = salary − ₹50,000 − professional tax − deductions, with 80C (including employee PF) capped at ₹1.5 lakh, 80D at ₹1 lakh, home loan interest at ₹2 lakh and 80CCD(1B) at ₹50,000. Enter the HRA exemption you are eligible for; the calculator does not work it out from rent. Not included: employer NPS contributions under 80CCD(2), capital gains and other special-rate income, and marginal relief on surcharge.
Sources: Income Tax Department, Union Budget and the Finance Act, 2025 slabs carried into FY 2026–27.
Frequently asked questions
Is income up to ₹12 lakh tax-free in FY 2026–27?
Yes, under the new regime. Taxable income up to ₹12 lakh gets a full rebate under Section 87A, so salaried people pay no tax on a salary up to ₹12.75 lakh after the ₹75,000 standard deduction. The rebate does not apply to special-rate income such as capital gains.
How much tax on a ₹15 lakh salary?
₹97,500 under the new regime, including 4% cess (taxable income ₹14.25 lakh).
How much tax on a ₹20 lakh salary?
₹1,92,400 under the new regime, including cess.
What are the new regime slabs for FY 2026–27?
Nil up to ₹4 lakh, 5% from ₹4 to 8 lakh, 10% from ₹8 to 12 lakh, 15% from ₹12 to 16 lakh, 20% from ₹16 to 20 lakh, 25% from ₹20 to 24 lakh and 30% above ₹24 lakh.
Did Budget 2026 change the tax slabs?
No. The slabs, the ₹75,000 standard deduction and the ₹12 lakh rebate limit in the new regime are the same as in FY 2025–26.
What is the standard deduction in the new regime?
₹75,000 for salaried employees and pensioners. It is ₹50,000 in the old regime.
Which is better, the old or new tax regime?
The new regime is better for most people. The old regime can be better if you claim large deductions such as full 80C, NPS, health insurance, HRA and home loan interest. Use the calculator to compare both with your own figures.
What is marginal relief in the new regime?
If your taxable income is a little above ₹12 lakh, your tax is limited to the amount by which your income exceeds ₹12 lakh, so earning slightly more never leaves you with less after tax.