Income Tax Slabs for AY 2026-27 (FY 2025-26) - Complete Guide
This comprehensive guide covers everything you need to know about the income tax slabs for Assessment Year (AY) 2026-27, which corresponds to Financial Year (FY) 2025-26 in India. We'll explore the differences between the old and new tax regimes, provide detailed slabs, offer an advanced interactive tax calculator with dropdown options for regimes and age categories, and answer frequently asked questions. This post is designed to be user-friendly, responsive on all devices, and optimized for SEO to rank highly on Google searches for terms like 'income tax slab AY 2026-27'.
Table of Contents
Introduction to Income Tax Slabs
Income tax slabs in India determine the rate at which your income is taxed based on your earnings. For AY 2026-27, taxpayers can choose between the old tax regime (with deductions and exemptions) or the new tax regime (with lower rates but fewer deductions). The new regime has been revised to make it more attractive, with adjusted slabs and higher rebates. This long description will help you understand the nuances, ensuring this page provides in-depth value for SEO purposes. The slabs are progressive, meaning higher income brackets pay higher rates. Additionally, surcharges apply on high incomes, and a 4% health and education cess is added to the total tax.
The government aims to simplify taxation with the new regime, but the old regime remains beneficial for those with significant deductions like home loans or investments under Section 80C. In FY 2025-26, the standard deduction in the new regime is Rs. 75,000 for salaried individuals, and the rebate under Section 87A has been enhanced. This guide includes real-time updates based on the latest Budget 2025 announcements, making it a reliable resource for taxpayers searching for 'income tax slab for AY 2026-27'.
What is AY and FY?
Financial Year (FY) is the year in which you earn income, from April 1 to March 31. Assessment Year (AY) is the following year when the income is assessed and taxed. For FY 2025-26 (April 1, 2025, to March 31, 2026), the AY is 2026-27.
New Tax Regime Slabs for AY 2026-27
The new tax regime offers simplified slabs with no exemptions but lower rates. Here's the detailed table:
| Income Range | Tax Rate |
|---|---|
| Up to Rs. 4,00,000 | Nil |
| Rs. 4,00,001 to Rs. 8,00,000 | 5% |
| Rs. 8,00,001 to Rs. 12,00,000 | 10% |
| Rs. 12,00,001 to Rs. 16,00,000 | 15% |
| Rs. 16,00,001 to Rs. 20,00,000 | 20% |
| Rs. 20,00,001 to Rs. 24,00,000 | 25% |
| Above Rs. 24,00,000 | 30% |
Rebate under Section 87A: Up to Rs. 60,000 if total income <= Rs. 7,00,000. Surcharge: 10% (50L-1Cr), 15% (1Cr-2Cr), 25% (>2Cr). Cess: 4%.
Old Tax Regime Slabs for AY 2026-27
The old regime allows deductions but has higher rates. Slabs vary by age:
For Individuals Below 60 Years / HUF
| Income Range | Tax Rate |
|---|---|
| Up to Rs. 2,50,000 | Nil |
| Rs. 2,50,001 to Rs. 5,00,000 | 5% |
| Rs. 5,00,001 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
For Senior Citizens (60-80 Years)
| Income Range | Tax Rate |
|---|---|
| Up to Rs. 3,00,000 | Nil |
| Rs. 3,00,001 to Rs. 5,00,000 | 5% |
| Rs. 5,00,001 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
For Super Senior Citizens (80+ Years)
| Income Range | Tax Rate |
|---|---|
| Up to Rs. 5,00,000 | Nil |
| Rs. 5,00,001 to Rs. 10,00,000 | 20% |
| Above Rs. 10,00,000 | 30% |
Rebate under Section 87A: Up to Rs. 12,500 if income <= Rs. 5,00,000. Surcharge: 10% (50L-1Cr), 15% (1-2Cr), 25% (2-5Cr), 37% (>5Cr). Cess: 4%.
Comparison Between Old and New Regimes
The new regime is simpler with lower rates but no deductions like 80C (up to Rs. 1.5L for investments). Old regime suits those with high deductions. For incomes up to Rs. 7L, new regime offers higher rebate. Choose based on your deductions; use our calculator below to compare.
Advanced Income Tax Calculator for AY 2026-27
Use this interactive calculator with advanced features like regime selection, age category (affecting old regime slabs), and deduction inputs. Results are printable.
How to Calculate Your Income Tax
Step 1: Determine taxable income after deductions (old regime). Step 2: Apply slabs progressively. Step 3: Subtract rebate if applicable. Step 4: Add surcharge if income >50L. Step 5: Add 4% cess. Use the calculator above for automation.
Frequently Asked Questions (FAQs)
What is the basic exemption limit in the new regime for AY 2026-27?
Rs. 4,00,000.
Can I switch between old and new regimes?
Yes, you can choose each year, but business income taxpayers have restrictions.
What is the rebate under Section 87A in the new regime?
Up to Rs. 60,000 if income <= Rs. 7,00,000.
Are deductions allowed in the new regime?
No, except standard deduction for salaried (Rs. 75,000) and family pension.
What is the surcharge rate for income above Rs. 5 crores in old regime?
37%.
How does age affect tax slabs?
In old regime, seniors get higher exemption limits.
Is cess applicable on surcharge?
Yes, 4% health and education cess on tax + surcharge.
What is marginal relief?
It reduces surcharge burden when income slightly exceeds thresholds.
Can NRIs use the new regime?
Yes, but slabs are the same without age-based exemptions.
How to file ITR for AY 2026-27?
Use ITR forms based on income type; new regime is default from AY 2024-25 onwards.
What are the tax rates for capital gains?
Separate rates apply; e.g., STCG 15%, LTCG 20% with indexation in old regime.
Is there any change in slabs from previous year?
Yes, new regime slabs adjusted for broader bands and higher rebate.
Conclusion
Understanding income tax slabs for AY 2026-27 helps in better financial planning. Use the calculator to estimate your liability and consult a tax professional for personalized advice.
