Income Tax Slabs & Rates AY 2026-27
A complete guide for all types of assessees — individuals, HUF, firms, and companies — covering both the New and Old Tax Regimes for FY 2025-26.
Overview
For Assessment Year 2026-27 (income earned in FY 2025-26), India’s income tax system operates under two parallel regimes. The New Tax Regime under Section 115BAC is the default for individuals, HUFs, AOPs, BOIs, and Artificial Juridical Persons. Taxpayers may opt for the Old Tax Regime to avail deductions and exemptions under Chapter VI-A.
• Basic exemption under the new regime raised from ₹3 lakh to ₹4 lakh
• Seven revised slab rates — new 25% slab introduced for income ₹20–24 lakh
• Section 87A rebate doubled to ₹60,000, making income up to ₹12 lakh effectively tax-free
• Standard deduction of ₹75,000 continues for salaried employees and pensioners
• Budget 2026 retains all slabs without further revision for AY 2026-27
The old tax regime slabs remain unchanged from prior years. Taxpayers with substantial deductions (80C, 80D, HRA, home loan interest etc.) should compare both regimes before filing.
Individual Taxpayers
The new regime applies uniform slab rates irrespective of age. Under the old regime, senior and super senior citizens enjoy higher basic exemption limits. NRIs follow the same slab rates but are not eligible for the Section 87A rebate.
| Income Range | Tax Rate | Remarks |
|---|---|---|
| Up to ₹4,00,000 | Nil | Raised from ₹3L in AY 2025-26 |
| ₹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% | New slab — not in AY 2025-26 |
| Above ₹24,00,000 | 30% |
No age-based differentiation applies under the new regime — all individuals (below 60, senior, and super senior) are taxed at the same slabs. NRIs do not get the Section 87A rebate.
| Income Range | Tax Rate |
|---|---|
| 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% |
| Income Range | Tax Rate |
|---|---|
| Up to ₹3,00,000 | Nil |
| ₹3,00,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
| Income Range | Tax Rate |
|---|---|
| Up to ₹5,00,000 | Nil |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
HUF, AOP, BOI & AJP
Hindu Undivided Families, Associations of Persons, Bodies of Individuals, and Artificial Juridical Persons are taxed at the same slab rates as an individual below 60 years of age.
Old Regime: Basic exemption ₹2.5 lakh. Same 5% / 20% / 30% slab structure as individual below 60. HUFs may claim deductions under Chapter VI-A.
AOP — special note: For AOPs where all members are companies, the surcharge rate is capped at 15%. Enhanced surcharges of 25% and 37% do not apply to income taxable under Sections 111A, 112, 112A, and dividend income.
Partnership Firms & LLPs
Partnership firms and LLPs are not taxed on a progressive slab structure. They pay a flat 30% on their entire net income from the first rupee of profit.
| Assessee | Flat Rate | Surcharge |
|---|---|---|
| Partnership Firm | 30% | 12% if net income > ₹1 crore |
| Limited Liability Partnership (LLP) | 30% | 12% if net income > ₹1 crore |
Companies
Companies pay tax at flat rates. The Act provides concessional regimes for domestic companies that forego exemptions — these can significantly reduce the effective tax burden.
| Condition / Section | Base Rate | Effective Rate (approx.) |
|---|---|---|
| Turnover ≤ ₹400 crore (FY 2021-22) | 25% | ~29.12% |
| Other domestic companies (general) | 30% | ~34.94% |
| Sec. 115BAA — concessional (no exemptions) | 22% | ~25.17% (mandatory 10% surcharge + 4% cess) |
| Sec. 115BAB — new manufacturing companies | 15% | ~17.01% (mandatory 10% surcharge + 4% cess) |
| Type of Income | Rate |
|---|---|
| Royalties / FTS under agreement before 01-04-1976 | 50% |
| Other royalties / FTS (technical services) | 40% |
| Any other income | 40% |
| Net Income Range | Surcharge Rate |
|---|---|
| Up to ₹1 crore | Nil |
| ₹1 crore – ₹10 crore | 7% |
| Above ₹10 crore | 12% |
Surcharge, Cess & Rebate
Surcharge is levied on the amount of income tax (not on income) when total income crosses specified thresholds. Health & Education Cess of 4% is universally applicable on tax plus surcharge.
| Total Income | Old Regime Surcharge | New Regime Surcharge |
|---|---|---|
| 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 | 37% | 25% (capped) |
| Regime | Maximum Rebate | Eligibility Threshold | Effective Zero-Tax Limit |
|---|---|---|---|
| Old Regime | ₹12,500 | Taxable income ≤ ₹5 lakh | ₹5 lakh |
| New Regime | ₹60,000 | Taxable income ≤ ₹12 lakh | ₹12 lakh (₹12.75L for salaried) |
Regime Comparison
The right regime depends on the quantum of your eligible deductions and exemptions. Here is a side-by-side snapshot to help you decide.
- ✓ Lower, revised slab rates
- ✓ Basic exemption ₹4 lakh
- ✓ Sec. 87A rebate up to ₹60,000
- ✓ Standard deduction ₹75,000 (salaried)
- ✓ Surcharge capped at 25%
- ✓ Simpler filing, fewer records
- ✗ No 80C, 80D, HRA, LTA deductions
- ✗ No home loan interest (self-occupied)
- ✓ Sec. 80C up to ₹1.5 lakh (PPF, ELSS, etc.)
- ✓ Sec. 80D health insurance premium
- ✓ HRA & LTA exemptions
- ✓ Home loan interest deduction
- ✓ Higher exemption for senior citizens
- ✗ Higher slab rates
- ✗ Surcharge up to 37%
- ✗ More documentation needed
Compute Your Exact Tax Liability
Use our detailed Income Tax Calculator for AY 2026-27 — compare both regimes side by side, enter all your deductions, and get a complete slab-wise tax breakdown instantly.
Tax calculator opens on TaxRoutine · e-Filing portal is the official Income Tax Department website