Income Tax Slabs FY 2025–26

On this page

• How income tax slabs work
• Key notes for FY 2025–26
• Old vs New tax regime (overview)
• Slab rate tables
• How to calculate tax from slabs
• Worked examples (New vs Old)
• Special-rate income note
• Surcharge & cess overview
• Common mistakes to avoid
• Questions people ask
• Sources

How India’s income tax slab system works

India follows a progressive slab system for individual income tax. That means: as your income goes up, the rate applied to the top portion of your income increases – but your entire income is not taxed at the highest rate.

Your tax is calculated in layers. Each layer (slab) of income is taxed at its own rate, and all layers are then added up to arrive at total income tax before surcharge and cess.

What happens when your income moves into a higher tax slab?

A common fear is: “If my income crosses a slab limit, will my entire income be taxed at that higher rate?” The answer is no. Only the extra portion that falls in the higher slab is taxed at the higher rate.

For example, suppose under a regime the 10% slab ends at ₹8,00,000 and the 15% slab starts above that. If your taxable income rises from ₹7,90,000 to ₹8,10,000, the extra ₹20,000 is taxed at 15%. The first ₹8,00,000 continues to be taxed in the lower slabs.

Key notes for FY 2025–26

• Scope: Slab tables on this page mainly apply to individuals and HUFs. Firms, LLPs and companies follow different tax rate structures.
• Standard deduction (salary): Old Regime ₹50,000 / New Regime ₹75,000 (as used in our calculator model; deduction is capped at salary income).
• Rebate under section 87A (resident individuals only): Old Regime – available up to taxable income of ₹5,00,000 (maximum rebate ₹12,500).
  New Regime – in our calculator configuration, available up to taxable income of ₹12,00,000 (maximum rebate ₹60,000), which can reduce your tax to zero if you qualify.
• Age impact: Under the Old Regime, resident senior citizens (60–79 years) and super seniors (80+) get higher basic exemption limits. Under the New Regime, slab rates are the same for all ages.
• Cess: Health & Education cess is 4% on (income tax + surcharge), for both regimes.
• Regime choice: As per recent rules, the New Regime is treated as the default in many situations, but you can typically opt for the Old Regime if it is better for you (rules differ slightly for those with business/professional income). Always check the latest instructions when filing.

Old vs New tax regime for FY 2025–26: quick comparison

Both regimes use slabs, but they treat deductions and exemptions very differently. Understanding the trade-off is essential before choosing your regime for FY 2025–26.

When should you consider the Old Regime instead of the New Regime?

The Old Regime may be better if you:

• Contribute heavily to 80C instruments (PF, PPF, ELSS, housing loan principal, etc.),
• Pay significant health insurance premiums (80D) or NPS contributions,
• Claim substantial HRA exemption, home loan interest, or other specific exemptions, and
• Are comfortable with more record-keeping and documentation.

The New Regime may be better if you:

• Do not (or cannot) claim many deductions/exemptions,
• Prefer a simpler salary and tax structure, and
• Fall within the new-regime rebate range (up to ₹12,00,000 taxable income in this model).

Slab rate tables (FY 2025–26)

These slab rates apply on your taxable income (after standard deduction and other eligible deductions/exemptions, depending on regime). Rebate under section 87A and special-rate income may further change your final tax.

New Regime slabs (FY 2025–26)

Remember: For eligible resident individuals, rebate under section 87A (as configured here) can reduce tax to zero for taxable income up to ₹12,00,000 under the New Regime.

Old Regime slabs (FY 2025–26)

Old Regime slabs differ by age group for resident individuals. (Non-residents typically use the “Under 60” slabs; age-based higher exemptions generally do not apply.)

How to calculate income tax from slabs (step by step)

Short version (for any regime)

1. Start with your gross income (salary + other income, as applicable).
2. Subtract eligible exemptions and deductions (these differ between Old and New Regime).
3. The result is your taxable income.
4. Apply the relevant slab rates to each layer of income to compute income tax.
5. If applicable, add surcharge on high incomes.
6. Add 4% cess on (tax + surcharge) to arrive at total tax liability.

Detailed view for salaried individuals

1. Understand your salary structure.
   Look at your offer letter or Form 16 to identify basic salary, HRA, special allowance, bonus, perquisites, etc. Your “CTC” often includes employer PF and other benefits that do not all become taxable income in the same way.
2. Compute income from salary.
   Add taxable components, then subtract exempt parts like HRA exemption (if using Old Regime and eligible) and certain allowances.
3. Apply standard deduction.
   Reduce salary income by: ₹50,000 (Old Regime) or ₹75,000 (New Regime, as per this model), limited to the amount of salary.
4. Include other income.
   Add interest income, rental income, business/professional income, etc. Keep special-rate income (certain capital gains, lottery, VDA/crypto) separately, as it may not follow slabs.
5. Reduce Chapter VI-A deductions (Old Regime mainly).
   Under the Old Regime, subtract eligible deductions like 80C, 80D, 80CCD(1B), 80G, etc., to get total taxable income. Under the New Regime, most of these are not available, so taxable income is usually closer to gross income.
6. Apply slab rates and compute tax.
   Use the relevant slab table (Old or New) and tax each portion of income in its slab.
7. Apply rebate (section 87A) if eligible.
   If you are a resident individual and your taxable income is within the applicable threshold (₹5,00,000 Old Regime / ₹12,00,000 New Regime in this model), rebate can reduce or eliminate your tax.
8. Add surcharge and 4% cess.
   For high-income cases, apply surcharge as per the table below, then add 4% cess on (tax + surcharge).

Worked examples (illustrative)

These examples show how slabs, rebate and cess work in practice under the tables above. They ignore special-rate income and surcharge for simplicity.

Special-rate income note (important)

Not all income is taxed using the slab rates shown above. Certain income types are taxed at special rates under specific sections of the Income-tax Act. These are calculated separately and then added to your slab-based tax.

Surcharge & cess (quick overview)

At higher income levels, an additional tax called surcharge applies on your income tax. After adding surcharge (if any), a 4% Health & Education cess is applied on (tax + surcharge).

Order of calculation:

1. Compute income tax using slab rates (and special rates where applicable).
2. Add surcharge on this income tax, if your total income exceeds the relevant threshold.
3. Calculate cess @ 4% on (tax + surcharge).

Example (very simplified): if your income tax is ₹10,00,000 and surcharge is 10% (₹1,00,000), total before cess is ₹11,00,000. Cess @ 4% = ₹44,000. Total tax = ₹11,44,000.

For a deeper explanation and edge cases (like marginal relief), see: Surcharge & cess explained.

Common mistakes to avoid

• Using slab rates on gross salary/CTC without first reducing standard deduction and other eligible items (as applicable to the chosen regime).
• Ignoring the difference between FY and AY and looking at slab rates for the wrong year. This page is for FY 2025–26 / AY 2026–27.
• Applying resident age-based Old-Regime slabs to non-residents. Non-residents generally do not get the higher basic exemption limits for senior/super-senior residents.
• Assuming slab-tax estimate is final even when you have special-rate income (capital gains, VDA, winnings). These need separate calculation.
• Forgetting rebate under section 87A when taxable income is within the threshold (₹5,00,000 in Old Regime; ₹12,00,000 in the New Regime as configured here).
• Not adding 4% cess (and surcharge where applicable), leading to underestimation of total tax liability.
• Choosing a regime without doing the math. Many taxpayers stay in a regime “by habit” instead of comparing with their actual deductions and income each year.

Questions people ask about income tax slabs for FY 2025–26

The questions below reflect what taxpayers typically search for around income tax slabs FY 2025–26 / AY 2026–27, the New Tax Regime, and Old vs New comparisons. They are written to match real-life queries, not to generate FAQ schema.

What are the income tax slab rates for FY 2025–26 under the new tax regime?

Under the New Tax Regime for FY 2025–26 (as configured in this calculator), taxable income is taxed at:

• 0% up to ₹4,00,000
• 5% from ₹4,00,001 to ₹8,00,000
• 10% from ₹8,00,001 to ₹12,00,000
• 15% from ₹12,00,001 to ₹16,00,000
• 20% from ₹16,00,001 to ₹20,00,000
• 25% from ₹20,00,001 to ₹24,00,000
• 30% above ₹24,00,000

Remember that eligible resident individuals may get a section 87A rebate up to taxable income of ₹12,00,000 in this model, which can bring tax down to zero even when the table shows a positive rate.

How is income tax on salary calculated for FY 2025–26 step by step?

For salaried employees, tax for FY 2025–26 is broadly calculated as:

1. Identify taxable salary components from your salary structure/Form 16.
2. Subtract exemptions (like HRA, LTA) if you are in the Old Regime and eligible.
3. Apply standard deduction (₹50,000 Old Regime / ₹75,000 New Regime, as per this guide).
4. Add other income (interest, rental, etc.).
5. Reduce Chapter VI-A deductions (80C, 80D, etc.), mainly under Old Regime.
6. Apply the relevant FY 2025–26 slab rates to your taxable income.
7. Apply rebate under section 87A if you are a resident individual within the threshold.
8. Add surcharge (if your income crosses high-income thresholds) and 4% cess.

You can see this pipeline implemented end-to-end inside the Income Tax Calculator India.

Which is better for FY 2025–26: Old vs New tax regime for a ₹10–15 lakh salary?

There is no single answer because it depends on how much you invest or spend in tax-saving instruments. Roughly:

• If you have few deductions (for example, minimal 80C, no home loan, limited HRA), the New Regime with its higher rebate range (up to ₹12,00,000) often gives a lower tax bill in the ₹10–15 lakh income band.
• If you have significant deductions and exemptions (full 80C, additional 80D, NPS, HRA, home loan interest, etc.), the Old Regime can still be more beneficial at higher salaries.

To answer this accurately for your own case, plug your numbers into the Income Tax Calculator India and compare both regimes side by side.

Can senior citizens choose the new tax regime for FY 2025–26?

Yes. Resident senior citizens (60–79) and super seniors (80+) can choose either the Old or the New Tax Regime for FY 2025–26, subject to the general regime-switching rules (especially if they have business/professional income).

Under the Old Regime, they enjoy a higher basic exemption limit. Under the New Regime, they do not get extra slabs, but may still gain from the simplified structure and, in this model, the higher rebate threshold up to ₹12,00,000 of taxable income.

Are HRA, 80C, 80D and home loan interest allowed under the new tax regime in FY 2025–26?

Under the New Tax Regime, most common deductions and exemptions (such as full 80C, HRA exemption, LTA, standard housing loan interest for self-occupied property, etc.) are generally not available. The regime is designed to offer:

• Lower slab rates, and
• A higher standard deduction in this model (₹75,000)

Some specific deductions and allowances may still be permitted under certain conditions, but the list is far smaller than in the Old Regime. That is why it is crucial to run your numbers in a calculator before deciding.

Is the new tax regime compulsory in FY 2025–26, or can I stay in the old regime?

Recent changes treat the New Regime as the default option, particularly for salaried taxpayers, unless you explicitly opt for the Old Regime. However, as long as the Old Regime continues to be available in law, most salaried individuals can elect it while filing the return or informing the employer (within deadlines).

Taxpayers with business or professional income face stricter switching rules. Before changing regimes, check the latest form instructions or consult a tax professional.

How do income tax slabs for FY 2025–26 apply to freelancers and consultants?

Freelancers, consultants and gig workers typically show their earnings as “profits and gains of business or profession”. Their total taxable income (after allowable expenses and deductions) is then taxed using the same slab rates (Old or New) as individuals.

However, if they opt for the New Regime and have business/professional income, the rules for switching back and forth between regimes are more restricted. This makes regime selection a strategic, multi-year decision for many self-employed taxpayers.

What happens to my tax if I receive bonus, arrears or variable pay in FY 2025–26?

Bonus, performance pay and salary arrears are generally added to your salary income in the year of receipt and taxed according to the income tax slabs for that year (FY 2025–26 in this case).

A large bonus or arrears can push part of your income into a higher slab, increasing your marginal rate on that extra amount. In some arrears cases, you may be able to claim relief under section 89(1) after doing a comparative calculation.

How does rebate under section 87A work in FY 2025–26 for AY 2026–27?

Section 87A is a rebate for resident individuals. It reduces income tax (before cess) by up to a specified amount when taxable income is within a specified limit. In this guide’s configuration:

• Old Regime: up to taxable income of ₹5,00,000 — max rebate ₹12,500.
• New Regime: up to taxable income of ₹12,00,000 — max rebate ₹60,000.

If your computed tax is less than the maximum rebate, the rebate simply cancels that tax, bringing income tax down to zero. Cess is then applied on the reduced (often zero) amount.

Sources and references

This educational guide on income tax slabs for FY 2025–26 / AY 2026–27 is aligned with information published on the following official and internal resources:

• Income Tax Department – Government of India
  Main official portal for the Income-tax Act, Rules, circulars, notifications and guidance.
• Income Tax e-Filing Portal
  For latest return forms, help sections, FAQs and slab information used during filing.
• Union Budget & Finance Acts – Ministry of Finance
  Official source for Budget documents and Finance Acts that notify slab rates and rebate changes.
• Our internal configuration and assumptions, documented in: Calculator methodology.
• Related in-depth explanations on this site: Old vs New tax regime guide and Surcharge & cess explained.

Always rely on the latest information available on the official government portals above or consult a qualified tax professional before filing your return, as tax rules and slab configurations can be updated by subsequent Finance Acts or notifications.