Understanding the latest income tax slabs for FY 2025–26 (Assessment Year 2026–27) is essential for effective tax planning in India. Taxpayers can choose between the new tax regime with lower rates and fewer deductions or the old tax regime that allows multiple exemptions and deductions.
What Are Income Tax Slabs? Meaning, Types & How They Work (2026 Guide)
Income tax slabs are predefined income ranges set by the government, where each range is taxed at a specific rate. The system follows a progressive taxation approach, meaning individuals with higher income pay tax at higher rates, while those with lower income are taxed at lower or nil rates.
New Tax Regime Slabs for FY 2025–26 (AY 2026–27)
The new tax regime is the default taxation system under Section 115BAC of the Income Tax Act, 1961. It offers lower tax rates but allows limited deductions.
- Up to ₹4,00,000 – Nil
- ₹4,00,001 to ₹8,00,000 – 5%
- ₹8,00,001 to ₹12,00,000 – 10%
- ₹12,00,001 to ₹16,00,000 – 15%
- ₹16,00,001 to ₹20,00,000 – 20%
- ₹20,00,001 to ₹24,00,000 – 25%
- Above ₹24,00,000 – 30%
Budget 2026 Impact on Income Tax Slabs: FY 2026–27 (AY 2027–28) Explained
The Budget 2026 has brought clarity for taxpayers regarding income tax slabs for the Financial Year 2026–27. As per the announcements, there are no changes in the existing tax slab structure under either the new tax regime or the old tax regime.
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May 2, 2026
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