provisions related to the new tax regime are dealt under section 115BAC of the Income Tax Act, 1961. Under the Income Tax Act, 2025, the provisions of the new tax regimes are dealt under section 202. Though it offers limited deductions and exemptions, this regime is more beneficial for middle class assessees, who do not have elaborate tax planning strategies and tax saving deductions.
New Tax Regime Slab Rates for FY 2025-26 (AY 2026-27) & FY 2026-27
The following are the slab rates under the new regime for FY 2025-26 and tax year 2026-27
| Income Tax Slabs (Rs.) | Income Tax Rates |
| Up to 4 lakh | Nil |
| 4 lakh to 8 lakh | 5% |
| 8 lakh to 12 lakh | 10% |
| 12 lakh to 16 lakh | 15% |
| 16 lakh to 20 lakh | 20% |
| 20 lakh to 24 lakh | 25% |
| Above 24 lakh | 30% |
Zero Tax on Income Up to ₹12 Lakh – How it works?
For an income up to Rs. 12 lakhs, the effective tax liability can be reduced to zero under the new regime, using a concept called rebate dealt under section 87A of the Income Tax Act, 1961. However, it is to be noted that the rebate is available only for income charged under the normal slab rates. Special rate income like capital gains, online gaming income are not eligible for this rebate.
The following example shows income and tax calculation, where rebate is claimed.
Mr A has a salary income of Rs. 12.75 lakhs per annum. Assuming he has no other income, the income and tax under the new tax regime is calculated as follows:
| Particulars | Amount |
| Gross salary | 12,75,000 |
| Less: Standard Deduction | 75,000 |
| Taxable Salary | 12,00,000 |
| Tax calculation: | |
| For income up to Rs. 4 lakhs | Nil |
| For income from Rs. 4-8 lakhs | 20,000 |
| For income from Rs. 8-12 lakhs | 40,000 |
| Total tax | 60,000 |
| Less: Rebate | 60,000 |
| Net Tax Liability | Nil |
Old Tax Regime Slab Rates for FY 2025-26 (AY 2026-27)
There has been no changes in the tax slabs under the old regime over the past few years. The following are the income tax slabs and slab rates under the old regime:
| Income Tax Slabs | Income Tax Rate |
| Up to Rs. 2.5 lakh | Nil |
| Rs. 2.5 lakh to Rs. 5 lakh | 5% |
| Rs. 5 lakh to Rs. 10 lakh | 20% |
| Above Rs. 10 lakh | 30% |
Income Tax Slabs for Senior Citizens
The old tax regime has concessional slab rates for senior citizens. The following are the slab rates under the old regime, for resident citizens who have crossed 60 years of age
| Income Tax Slabs | Income Tax Rate |
| Up to Rs. 3 lakh | Nil |
| Rs. 3 lakh to Rs. 5 lakh | 5% |
| Rs. 5 lakh to Rs. 10 lakh | 20% |
| Above Rs. 10 lakh | 30% |
Income Tax Slabs for Super Senior Citizens
The following are the income tax slabs for resident super senior citizens who have crossed 80 years of age:
| Income Tax Slabs | Income Tax Rate |
| Up to Rs. 5 lakh | Nil |
| Rs. 5 lakh to Rs. 10 lakh | 20% |
| Above Rs. 10 lakh | 30% |
While the new regime offers beneficial slab rates with limited deductions, the old tax regime offers a plethora of deductions, with stricter slab rates.
Deductions available under the Old v/s New Regime
The following table analyses in detail, the list of deductions available under the old and the new tax regimes.
| Tax Benefit | Old Regime | New regime |
| Rebate u/s 87A | Rs. 12,500 (income up to Rs. 5 lakh) | Rs. 60,000 (income up to Rs. 12 lakh) |
| Standard Deduction | Rs. 50,000 | Rs. 75,000 |
| Section 80C Deductions | Allowed | Not Allowed |
| HRA Exemption | Allowed | Not Allowed |
| Home loan interest (Self-occupied) | Allowed | Not Allowed |
| NPS Deduction | Fully Allowed | Only Employer Contribution |
| Set-off of House property losses | Allowed | Not Allowed |
| Section 80D Deduction | Allowed | Not Allowed |
How Much Tax Will You Pay? Salary-wise Breakdown
The following comparison shows how much tax you pay under the new vs old tax regime at different income levels and the potential savings available.
| Taxable Income | Tax (New Tax Regime) | Tax (Old Tax Regime) | Savings |
| Rs. 8 lakh | Nil (Rebate 87A) | Rs. 75,400 | Rs. 75,400 |
| Rs. 10 lakh | Nil (Rebate 87A) | Rs. 1,17,000 | Rs. 1,17,000 |
| Rs. 12 lakh | Nil (Rebate 87A) | Rs. 1,79,400 | Rs. 1,79,400 |
| Rs. 13 lakh | Rs. 78,000 | Rs. 2,10,600 | Rs. 1,32,600 |
| Rs. 15 lakh | Rs. 1,09,200 | Rs. 2,73,000 | Rs. 1,63,800 |
| Rs. 20 lakh | Rs. 2,08,000 | Rs. 4,29,000 | Rs. 2,21,000 |
| Rs. 25 lakh | Rs. 3,43,200 | Rs. 5,85,000 | Rs. 2,41,800 |
| Rs. 30 lakh | Rs. 4,99,200 | Rs. 7,41,000 | Rs. 2,41,800 |
Under the new tax regime, taxpayers with taxable income up to Rs. 12 lakh pay zero tax due to the rebate available under Section 87A. For higher income levels, the new regime generally results in significantly lower tax liability compared to the old regime if the taxpayer does not claim major deductions.
Use the income tax calculator above to find the most beneficial regime in two minutes.
How to Use the Income Tax Calculator for FY 2026-27 (AY 2027-28)?
Following are the steps to use the tax calculator:
- Choose the financial year for which you want your taxes to be calculated.
- Select your age accordingly. Tax liability under the old regime differs based on the age groups.
- Click on ‘Continue’
- Enter your salary, i.e. salary before deducting various exemptions such as HRA and so on. If LTA deduction is applicable to you, reduce it from salary and enter the net figure. There is a field available for exempt allowances. Enter the particulars if it applies to your case.
- Along with taxable salary, you must enter other details such as interest income, rental income, interest paid on home loan for rented, and interest paid on loan for self-occupied property.
- For Income from Digital Assets, enter the net income (Sale consideration (-) Cost of Acquisition).
- Click on ‘Continue’ again.
- You can also enter your tax-saving investments under sections 80C, 80D, 80G, 80E, and 80TTA, if applicable to your case.
- Click on ‘Calculate’ to calculate your tax liability. You will be able to compare the old and new tax regimes.
Income Tax Calculation Example FY 2025-26 & FY 2026-27
Ms. Neha has the following income for the financial year 2025-26:
- Salary income – Rs. 15 lakhs
- Interest from savings bank account – Rs. 7,000
- Freelancing business income – Rs. 50,000
- Home loan interest paid for self-occupied property – Rs. 1.5 lakhs
Her income and tax outflow for FY 2025-26 is calculated as follows:
| Particulars | Old Tax Regime | New Tax Regime |
| Salary income | 15,00,000 | 15,00,000 |
| Less: Standard Deduction | 50,000 | 75,000 |
| Taxable Salary | 14,50,000 | 14,25,000 |
| Freelancing Business Income | 50,000 | 50,000 |
| Savings Bank Interest | 7,000 | 7,000 |
| Gross Total Income | 15,07,000 | 14,82,000 |
| Less Deductions: | ||
| Home loan interest | 1,50,000 | Nil |
| Savings bank interest (80TTA) | 7,000 | Nil |
| Taxable Income | 13,50,000 | 14,82,000 |
| Tax Payable (Including Cess) | 2,26,200 | 1,06,392 |
In this case, the new regime proves to be more beneficial, despite the old regime exclusive deductions.
Surcharge and Education Cess
Simply speaking, surcharge refers to tax on tax. If your taxable income crosses Rs. 50 lakh, surcharge is calculated on your tax liability. The following are the surcharge rates for different income levels.
| Income Level | Surcharge (Old Regime) | Surcharge (New Regime) |
| Rs. 50 Lakhs – 1 Crore | 5% | 5% |
| Rs. 1 Crore – 2 Crores | 15% | 15% |
| Rs. 2 crores – 5 Crores | 25% | 25% |
| More than Rs. 5 Crores | 37% | 25% |
Income Tax Slab Rates – Historical Comparison (FY 2023-24 to FY 2025-26)
The slab rates under the new regime has undergone many changes in the recent past. The following tables shows the income tax slabs of preceding financial years.
New Regime Tax Slabs – FY 2023-24
| Total Income (Rs) | Rate (per cent) |
| Up to 3 lakhs | Nil |
| From 3 lakhs to 6 lakhs | 5 |
| From 6 lakhs to 9 lakhs | 10 |
| From 9 lakhs to 12 lakhs | 15 |
| From 12 lakhs to 15 lakhs | 20 |
| Above 15 lakhs | 30 |
New Regime Tax Slabs – FY 2024-25
| Total Income (Rs) | Rate (per cent) |
| Up to 3 lakhs | Nil |
| From 3 lakhs to 7 lakhs | 5 |
| From 7 lakhs to 10 lakhs | 10 |
| From 10 lakhs to 12 lakhs | 15 |
| From 12 lakhs to 15 lakhs | 20 |
| Above 15 lakhs | 30 |
New Regime Tax Slabs – FY 2025-26
| Total Income (Rs) | Rate (per cent) |
| Up to 4 lakhs | Nil |
| From 4 lakhs to 8 lakhs | 5 |
| From 8 lakhs to 12 lakhs | 10 |
| From 12 lakhs to 16 lakhs | 15 |
| From 16 lakhs to 20 lakhs | 20 |
| From 20 lakhs to 24 lakhs | 25 |
| Above 24 lakhs | 30 |
What is the Income Tax Calculator?
The Cleartax Income tax calculator is a simple and easy-to-use online tool designed to calculate your tax liability in detail, according to the provisions and rules of the Income Tax Act 1961. It enables you to compare your tax liability between the old and new tax regimes, making choosing the more beneficial option easier. Our calculator has been updated in line with tax changes proposed in the union Budget 2026.
