Income tax in India is calculated on a slab-based system, where different portions of your income are taxed at different rates. According to the slabs you provided:
Income-tax slabs in India (FY 2025-26 / AY 2026-27)
New Tax Regime (default option)
Taxable Income Rs. |
Tax Rate |
Up to Rs. 4,00,000 |
Nil |
Rs. 4,00,001 – Rs. 8,00,000 |
5% |
Rs. 8,00,001 – Rs. 12,00,000 |
10% |
Rs. 12,00,001 – Rs. 16,00,000 |
15% |
Rs. 16,00,001 – Rs. 20,00,000 |
20% |
Rs. 20,00,001 – Rs. 24,00,000 |
25% |
Above Rs. 24,00,000 |
30% |
Old Tax Regime (optional)
Taxable Income Rs. |
Tax Rate |
Up to Rs. 2,50,000 |
Nil |
Rs. 2,50,001 – Rs. 5,00,000 |
5% |
Rs. 5,00,001 – Rs. 10,00,000 |
20% |
Above Rs. 10,00,000 |
30% |
Disclaimer
The above income-tax slabs are based on the latest information available for Financial Year 2025-26 (Assessment Year 2026-27). Tax rules, exemptions, rebates, and rates are subject to change by the Government of India through annual budgets or official notifications. Taxpayers should verify the latest updates on the Income Tax Department’s official website or consult a qualified tax professional before filing returns or making financial decisions.
The advantage of the old regime is that it allows individuals to claim deductions under sections such as 80C, 80D, 80CCD(1B), and 80TTA. By strategically planning and using available deductions, it is possible to reduce taxable income, which may help in lowering your tax liability. With careful tax planning, individuals with a gross income of Rs. 7,75,000 could potentially achieve zero tax, depending on eligibility under sections like 80C, 80D, 80CCD(1B), and 80TTA, while also maximising savings.
- Under the new tax regime for FY 2025-26, salaried individuals can claim a standard deduction of Rs. 75,000. This means that a gross income of Rs. 7,75,000 reduces to taxable income of about Rs. 7,00,000.
- The old regime still allows deductions like Section 80C (up to Rs. 1,50,000), 80CCD(1B) (Rs. 50,000), 80D (up to Rs. 25,000), and 80TTA (up to Rs. 10,000). With those, taxable income could fall significantly, for example, around Rs. 4,65,000 depending on income & deductions claimed. \
- Under Section 87A, for FY 2025-26, individuals with total taxable income up to Rs. 12,00,000 under the new tax regime can claim a rebate of up to Rs. 60,000, which may reduce their tax payable to zero if tax before rebate is ≤ that amount. Under the old regime, rebate remains at Rs. 12,500 for taxable income up to Rs. 5,00,000.
Here is a table illustrating how this works:
Tax Calculation Particulars |
Old Regime (Rs.) |
New Regime (Rs.) |
Gross Salary u/s 17(1) |
7,50,000 |
7,50,000 |
Less: Exemption u/s 10 |
|
|
HRA Exemption |
50,000 |
NA |
Less: Deduction u/s 16 |
|
|
Standard deduction |
50,000 |
75,000 |
Income under the Head Salary |
6,50,000 |
6,75,000 |
Less: Deduction under Chapter VI-A |
|
|
Section 80C |
50,000 |
NA |
Net Total Income |
6,00,000 |
6,75,000 |
Income Tax (Excluding cess) |
33,800 |
13,370 |
Less: Rebate u/s 87A |
- |
13,370 |
Tax Liability (Including cess) |
33,800 |
0 |
Notes:
- Under the old tax regime, taxpayers can claim deductions under Section 80C, Section 80CCD(1B), Section 80D, and Section 80TTA.
- Under the new tax regime, most deductions are not allowed. Taxpayers can only claim the standard deduction (Rs. 75,000) and the Section 87A rebate, if eligible.
- Actual tax liability varies based on applicable deductions, exemptions, and individual financial profiles. This table is illustrative and not personalised tax advice.
- By fully utilising deductions under 80C, 80D, 80TTA, and 80CCD(1B) in the old regime, taxpayers may be able to reduce taxable income to the rebate threshold and pay zero tax, depending on eligibility.
