Which income tax slab applies to you in 2026?

For income earned from 1 April 2025 to 31 March 2026, your income tax slab depends on your taxable income, the regime you use, and, under the old regime, your age. Each slice of ordinary taxable income is taxed at its own rate. Reaching a higher slab does not put your entire income at that higher rate. The tables below apply to FY 2025–26 (AY 2026–27).

What does an income tax slab mean?

A slab is a band of taxable income with a corresponding rate. Your marginal slab is the rate on the last slice of your ordinary taxable income, after permitted exemptions and deductions. It is different from your average tax rate and from tax payable after rebate, surcharge, cess, and any tax already deducted. Some income, such as certain capital gains, can be taxed at special rates instead of the ordinary slab rates.

What are the new regime slabs for FY 2025–26?

The new regime is the default for eligible individuals. It uses the same ordinary income slabs regardless of whether an individual is below or above age 60. It permits fewer deductions than the old regime. These rates are for FY 2025–26, not a timeless chart.

A resident individual with eligible taxable income up to ₹12 lakh may receive a rebate of up to ₹60,000 under Section 87A, so ordinary slab tax may be reduced to zero. The rebate is not a nil rate slab and does not generally offset tax on income taxed at special rates. Marginal relief may apply just above the threshold. Check the composition of income before assuming zero tax.

What are the old regime slabs?

The old regime retains more specified exemptions and deductions, but its basic exemption depends on age. Age is measured during the relevant financial year. Rates on successive taxable income bands are 5%, 20%, and 30% after the applicable basic exemption.

For eligible resident individuals under the old regime, Section 87A can reduce tax by up to ₹12,500 when taxable income does not exceed ₹5 lakh. Non-residents are not eligible for this rebate. The 4% health and education cess applies to tax plus surcharge, where relevant.

How do you find your slab in four steps?

First, select the correct income year and taxpayer category.

Second, add taxable income from salary, property, business, and other sources, while identifying income with special rates.

Third, calculate income under each regime using only exemptions and deductions that regime allows.

Fourth, locate ordinary taxable income in the table and calculate tax on each band, then apply any eligible rebate, surcharge and cess. Compare final liability under both regimes rather than comparing the top rates alone.

Example: If ordinary taxable income is ₹10 lakh in the new regime, slab tax before rebate is ₹40,000: 5% of the ₹4 lakh band from ₹4 lakh to ₹8 lakh, plus 10% of the next ₹2 lakh. An eligible resident individual whose total taxable income is ₹10 lakh and who has no special rate income may have that ordinary tax eliminated by the Section 87A rebate. This is an illustration, not a calculation for every taxpayer.

Does a ₹12 lakh salary always mean zero tax?

No. The new regime rebate is tested against eligible taxable income, not gross salary. Salary may be reduced by the permitted standard deduction, while other income can raise taxable income. Special rate income, residency, surcharge, and other circumstances can change the final result. For salaried individuals, verify the applicable standard deduction and total income in Form 16 and the tax return before concluding that no tax is payable.

Can Life Insurance premiums change your tax slab?

An eligible Life Insurance premium may be counted within the combined ₹1.5 lakh Section 80C ceiling under the old regime, subject to policy specific limits and other conditions. It usually does not qualify for the same deduction in the new regime. A deduction reduces taxable income. It does not directly reduce tax by the full premium paid. Buy cover for an Insurance need, then assess any incidental tax treatment.

Aditya Birla Sun Life Insurance Company Limited offers Life Insurance products. If you are considering a policy, check its benefit illustration, eligibility, and current sales literature separately. No product, rider, or return claim is made here.

Which regime should you choose?

Compute both outcomes using your actual income and eligible claims. The new regime starts as a default. Eligible taxpayers without business or professional income can generally choose a regime when filing their return each year. Taxpayers with business or professional income face additional election rules, including Form 10-IEA and limits on switching back. Get tailored advice if your income includes capital gains, multiple properties or business income.

Also read

• Can women claim tax benefits on life insurance in 2026?
• How does life insurance protect a family financially?
  
  

References and publication notes

[1] Income Tax Department, Salaried Individuals for AY 2026–27, slab tables, Section 87A, cess and regime election guidance: https://www.incometax.gov.in/iec/foportal/help/individual/return-applicable-1 (accessed 29 September 2026).

[2] Income Tax Department, Deductions, Section 80C life insurance eligibility: https://www.incometaxindia.gov.in/w/deductions (accessed 29 September 2026).