Updated slabs from Budget 2025. Includes ₹75,000 standard deduction[src] and Section 156(2)(a) rebate (zero tax up to ₹12L taxable income).
Corrected 29 August 2026. An earlier version of this page excluded target variable pay from both received cash and taxable salary, which understated income tax. Figures are recalculated under model PS-A3. What changed →
Short answer: under the new regime for Tax Year 2026-27, income up to ₹12 lakh is taxed at zero after the Section 156(2)(a) rebate, which becomes ₹12.75 lakh for salaried people once the ₹75,000 standard deduction is applied. Above that, slabs run 5% to 30% plus 4% cess.
| Income Slab | Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4L — ₹8L | 5% |
| ₹8L — ₹12L | 10% |
| ₹12L — ₹16L | 15% |
| ₹16L — ₹20L | 20% |
| ₹20L — ₹24L | 25% |
| Above ₹24L | 30% |
Std deduction ₹75,000 (s.19) | Rebate to nil tax if taxable ≤ ₹12L (s.156) | Surcharge 10% >₹50L, 15% >₹1Cr, 25% >₹2Cr with marginal relief | Cess 4%
Rates and slabs are indicative, as of August 2026
Budget 2025 made income up to ₹12 lakh (taxable) completely tax-free through Section 156(2)(a) rebate. With ₹75,000 standard deduction, anyone earning up to about ₹12.75 lakh gross salary pays zero tax. The new regime has lower rates but removes most deductions (80C, HRA, LTA, home loan interest).
It works better for people without significant investments in tax-saving instruments or home loans. If you have heavy deductions (80C + HRA + home loan = ₹4L+), the old regime may still save more — calculate both scenarios to be sure.
Related: Section 80C Guide, Old vs New Regime Comparison.
A note on section numbers. The Income-tax Act, 2025 replaced the Income-tax Act, 1961 with effect from 1 April 2026. Section numbers on this page are those of the 2025 Act. Where you know a provision by its old number, the mapping is: 115BAC → 202, 87A → 156, 16(ia) → 19, 80CCD(2) → 124, 112A → 198, 10(10) → 19(1) Table Sl. Nos. 3-6.
The official pages this page is checked against. If one of them disagrees with us, it wins.
Written and checked by the PaisaSamajh editorial desk · Last reviewed: 24 August 2026 · How we check this →