Income tax slabs and rates FY 2026-27
Slab rates under the new and old regimes, surcharge, company and LLP rates, capital gains and special rates for tax year 2026-27 (AY 2027-28). The same slabs apply to the FY 2025-26 return being filed this year.
New regime (default) — individuals, HUFs, AOPs
| Total income | Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹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% |
| Above ₹24,00,000 | 30% |
Same slabs for every age. Rebate under section 156 (87A of the 1961 Act) makes tax nil where total income is up to ₹12 lakh (₹12.75 lakh for salaried after the standard deduction).
Old regime (on opting out)
| Total income | Below 60 | 60 to 79 | 80 and above |
|---|---|---|---|
| Up to ₹2,50,000 | Nil | Nil | Nil |
| ₹2,50,001 – ₹3,00,000 | 5% | Nil | Nil |
| ₹3,00,001 – ₹5,00,000 | 5% | 5% | Nil |
| ₹5,00,001 – ₹10,00,000 | 20% | 20% | 20% |
| Above ₹10,00,000 | 30% | 30% | 30% |
Higher exemption limits for senior citizens apply to residents only.
Surcharge on individuals, HUFs and firms
| Total income | New regime | 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% |
Plus health and education cess of 4% on tax and surcharge. Surcharge on capital gains under sections 196 (111A of the 1961 Act), 112 and section 198 (112A of the 1961 Act) and on dividends is capped at 15%. Partnership firms and LLPs: 12% above ₹1 crore.
Companies, firms and LLPs
| Taxpayer | Rate | Surcharge | Effective (with 4% cess) |
|---|---|---|---|
| Domestic company — section 200 (115BAA of the 1961 Act) (no exemptions or incentives) | 22% | 10% | 25.17% |
| New manufacturing company — section 201 (115BAB of the 1961 Act) (set up and started manufacturing by 31 March 2024) | 15% | 10% | 17.16% |
| Domestic company with turnover up to ₹400 crore in FY 2024-25 — regular regime | 25% | 7% above ₹1 crore; 12% above ₹10 crore | 26%–29.12% |
| Other domestic companies — regular regime | 30% | 7% above ₹1 crore; 12% above ₹10 crore | 31.2%–34.94% |
| Foreign company (branch or PE income) | 35% | 2% above ₹1 crore; 5% above ₹10 crore | 36.4%–38.22% |
| Partnership firm and LLP | 30% | 12% above ₹1 crore | 31.2%–34.94% |
| Co-operative society — section 203 (115BAD of the 1961 Act) / 204 (115BAE of the 1961 Act) | 22% / 15% | 10% | 25.17% / 17.16% |
Minimum alternate tax of 15% applies to companies under the regular regime; none under section 200 (115BAA)/115BAB. Compare an Indian company with a UAE company on the same profit in our corporate tax comparison.
Capital gains and special rates
| Income | Rate | Notes |
|---|---|---|
| Long-term capital gains on listed shares and equity funds (section 198; 112A) | 12.5% above ₹1.25 lakh a year | STT paid; grandfathered cost as on 31 January 2018 |
| Short-term capital gains on listed shares and equity funds (section 196; 111A) | 20% | Held 12 months or less |
| Long-term capital gains on property, gold, debt funds bought before 1 April 2023, unlisted shares | 12.5% without indexation | Property bought before 23 July 2024: resident individuals may pay 20% with indexation if lower |
| Short-term capital gains on other assets | Slab rate | Debt funds bought after 31 March 2023 are always short-term |
| Virtual digital assets — crypto, NFTs (section 194; 115BBH of the 1961 Act) | 30% | No deductions except cost; no set-off of losses; 1% TDS under section 393 (194S of the 1961 Act) |
| Winnings from lottery, online games, betting (section 194 (115BB), section 194 (115BBJ)) | 30% | No basic exemption |
| Dividend and interest received by residents | Slab rate | Dividend income deduction limited to interest expense up to 20% |
| NRI — interest on NRE/FCNR deposits | Exempt | NRO interest at slab, TDS 30% under section 393 (195) |
| NRI — long-term gains on specified assets bought in foreign currency (section 214; 115E of the 1961 Act) | 12.5% | Aligned with the general long-term rate from 23 July 2024; treaty rates may be lower |
What the new regime still allows
- Standard deduction of ₹75,000 on salary and pension
- Employer's NPS contribution up to 14% of salary (section 124; 80CCD(2) of the 1961 Act)
- Family pension deduction up to ₹25,000
- Rebate under section 156 (87A): no tax on total income up to ₹12 lakh (slab income), with marginal relief just above it — special-rate income such as capital gains is not covered
- Agniveer corpus fund contribution (80CCH)
- Interest on a home loan for a let-out property (set-off limited to that property's income)
What the old regime allows
- Standard deduction of ₹50,000 on salary
- Section 123 (80C of the 1961 Act) up to ₹1.5 lakh (PPF, ELSS, life insurance, EPF, tuition fees, home-loan principal)
- Section 126 (80D of the 1961 Act) health insurance: ₹25,000 (₹50,000 for senior citizens), plus parents
- Home-loan interest on self-occupied property up to ₹2 lakh (section 22; 24(b) of the 1961 Act)
- HRA exemption, LTA, section 124 (80CCD(1B)) NPS ₹50,000, section 129 (80E of the 1961 Act) education-loan interest, section 133 (80G of the 1961 Act) donations, section 153 (80TTA of the 1961 Act)/80TTB interest
- Rebate under section 156 (87A): ₹12,500 where total income is up to ₹5 lakh
Not sure which regime is cheaper for you? Run both in our old vs new regime calculator.
Disclaimer. This page is a general reference prepared from the law and notifications as we understand them on the date shown. It is not legal, tax or professional advice and does not create a client relationship; rates, thresholds and due dates change and your position depends on facts we have not seen. Please confirm with us before acting on anything here. I. H. Khan and Associates accepts no liability for decisions taken on the basis of this page. Section numbers are those of the Income-tax Act, 2025, in force from 1 April 2026, with the 1961 Act number in brackets (pages about the FY 2025-26 return, which the 1961 Act still governs, quote that Act first) — see our section map.
Points people ask us about
Which regime is the default?
The new regime applies unless you opt out. Salaried taxpayers can choose each year in the return; those with business income opt out with Form 10-IEA and can switch back only once.
Health and education cess
4% on tax plus surcharge, in both regimes and for every taxpayer.
Surcharge cap
The new regime caps surcharge at 25%; the old regime charges 37% above ₹5 crore. Surcharge on capital gains under sections 196 (111A), 112 and section 198 (112A), and on dividends, is capped at 15% in both regimes.
Marginal relief
Applies at each surcharge threshold, and to the ₹12 lakh rebate in the new regime, so that a rupee of extra income never costs more than a rupee of extra tax.
Senior citizens
The higher old-regime exemption limits (₹3 lakh at 60, ₹5 lakh at 80) apply only to residents; non-residents get ₹2.5 lakh regardless of age. Section 393 (194P) allows residents aged 75+ with only pension and interest income from one bank to skip filing.
Income-tax Act, 2025
In force from 1 April 2026 for tax year 2026-27. Rates and slabs are unchanged; the return for FY 2026-27 (filed in 2027) uses the new Act's section numbers. FY 2025-26 returns filed in 2026 remain under the 1961 Act.
Want your tax computed both ways?
Send us your Form 16 or a summary of your income and we will show the tax under each regime and the deductions worth keeping.