Income tax slab rates for FY 2026-27 (AY 2027-28) are crucial for every taxpayer in India. Whether you are a salaried employee, business owner, or freelancer, knowing the correct tax slabs helps you plan your taxes and avoid overpaying. This guide covers both the new tax regime (default) and the old tax regime with all deductions.
Income Tax Slab Rates FY 2026-27 — New Tax Regime (Default)
The new tax regime is the default from FY 2023-24 onwards. It offers lower tax rates but fewer deductions. Here are the slabs:
| Income Slab | Tax Rate (New Regime) | Tax Rate (Old Regime) |
|---|---|---|
| Up to ₹3,00,000 | NIL | NIL (up to ₹2,50,000) |
| ₹3,00,001 – ₹6,00,000 | 5% | 5% (₹2,50,001 – ₹5,00,000) |
| ₹6,00,001 – ₹9,00,000 | 10% | 20% (₹5,00,001 – ₹10,00,000) |
| ₹9,00,001 – ₹12,00,000 | 15% | 30% (above ₹10,00,000) |
| ₹12,00,001 – ₹15,00,000 | 20% | 30% |
| Above ₹15,00,000 | 30% | 30% |
Standard Deduction
New Regime: Standard deduction of ₹75,000 for salaried individuals.Old Regime: Standard deduction of ₹50,000 for salaried individuals.
The new regime also offers a Section 87A rebate making income up to ₹7,00,000 tax-free.
Surcharge & Cess
| Total Income | Surcharge (New Regime) | Surcharge (Old Regime) |
|---|---|---|
| Up to ₹50 lakh | NIL | NIL |
| ₹50 lakh – ₹1 crore | 10% | 10% |
| ₹1 crore – ₹2 crore | 15% | 15% |
| ₹2 crore – ₹5 crore | 25% | 25% |
| Above ₹5 crore | 25% | 37% |
Health & Education Cess: 4% on (tax + surcharge) in both regimes.
Who Should Choose the New Regime?
- Income below ₹7 lakh: New regime is better (full rebate under 87A).
- Income ₹7-15 lakh with fewer deductions: New regime offers lower rates.
- Young professionals with minimal investments: New regime saves more tax.
- Freelancers without home loan/HRA: New regime is simpler and cheaper.
Who Should Choose the Old Regime?
- Home loan borrowers: Section 24(b) deduction up to ₹2 lakh.
- HRA claimants: Significant exemption in metro cities.
- Heavy investors: 80C (₹1.5L) + 80D (₹25K-50K) + 80CCD (₹50K).
- Business owners with large deductions: Depreciation, expenses, donations.
Quick Example
Salary: ₹12,00,000 with ₹3,00,000 deductionsNew Regime tax: ₹42,500 (after standard deduction ₹75K)
Old Regime tax: ₹31,200 (after deductions ₹3L + standard deduction ₹50K)
Old regime saves ₹11,300! Always calculate both before choosing.
Calculate Your Tax Instantly
Use our free income tax calculator to compare both regimes and find the best one for you.
Income Tax Calculator Free →How to Switch Between Regimes
- Salaried individuals: Can switch every year at the time of ITR filing.
- Business owners: Once opted for the new regime, can switch back only ONCE (irreversible after that).
- Filing ITR: Select the regime in your ITR form. Your employer deducts TDS based on your declared regime.
Tax Planning Tips for FY 2026-27
- Calculate both regimes before choosing — don't assume one is always better.
- Maximize 80C (₹1.5 lakh) if opting for old regime — PPF, ELSS, LIC, EPF.
- Use Section 80CCD(1B) for an additional ₹50,000 NPS deduction.
- Claim HRA properly — rent receipts and landlord PAN are mandatory for claims above ₹1 lakh.
- Don't forget home loan interest — Section 24(b) allows up to ₹2 lakh.
Important Deadline
ITR filing for FY 2026-27: Due by 31st July 2027. Late filing attracts penalty up to ₹5,000 under Section 234F. If you have a tax audit, the deadline is 31st October 2027.