Income Tax Slabs

Income Tax Slabs for FY 2025-26 (AY 2026-27) – New Tax Regime Slabs and Rates

As per Budget 2025, the income tax slab rates under the new tax regime for FY 2025-26 (AY 2026-27) are as follows:

Rebate under Section 87A is available for income up to Rs. 12 lakh, meaning taxpayers with total income not exceeding Rs. 12 lakh have zero tax liability.  

Income Tax Slabs for FY 2024-25 (AY 2025-26) Under the New Tax Regime

The existing new tax regime slabs for FY 2024-25 (AY 2025-26) are as follows:

Rebate under Section 87A is available for income up to Rs. 7 lakh, meaning taxpayers with total income not exceeding Rs. 7 lakh have zero tax liability.

Deductions Allowed Under New Tax Regime

Though most of the popular deductions and exemptions such as HRA, 80C, 80D, and many are not allowed under the new tax regime, the following are made available to the taxpayers:

• Standard deduction of Rs. 75,000 
• Employer’s contribution to NPS under Section 80CCD(2)
• Deduction for Agniveer Corpus Fund (Section 80CCH)
• Transport allowance for disabled employees
• Gratuity, Leave encashment, VRS exemption (on retirement)

Income Tax Slabs for FY 2024-25 (AY 2025-26) & FY 2025-26 (AY 2026-27) Under Old Tax Regime

Popular Deductions Allowed under Old Tax Regime

• 80C, 80D, 80G, 80TTA
• HRA, LTA, home loan interest (Section 24)
• Education loan interest (Section 80E), etc.

Income Tax Slabs for Senior Citizens

The income tax slabs for senior citizens aged above 60 years but below 80 years under the old tax regime is as follows:

For super senior citizens aged above 80 years, the basic exemption limit increases to ₹5,00,000.

Note: There is no separate slab benefit for senior citizens under the new tax regime.

What is a Surcharge and Applicable Surcharge Rates?

A surcharge is an additional tax calculated as a percentage of the income tax payable by a taxpayer. It applies mainly to high-income individuals, HUFs, and firms whose income exceeds specified thresholds. However, taxpayers who marginally cross these limits can claim marginal relief, ensuring the additional tax (surcharge) does not exceed the income that surpasses the threshold.

Surcharge rate for individuals under the Old and New Tax Regime is as follows:

Surcharge Rates on Capital Gains, Dividends, and AOPs

The surcharge rates of 25% or 37% do not apply to income from:

• Dividends
• Short-term capital gains under Section 111A (STCG on shares)
• Long-term capital gains under Section 112A (LTCG on shares)
• Income of Foreign Institutional Investors under Section 115AD

Maximum surcharge on such incomes is capped at 15%. For an Association of Persons (AOP) consisting entirely of companies, the surcharge rate is also limited to 15%.

Additionally, a Health and Education cess of 4% is levied on the total income tax and surcharge amount payable.