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New Tax Regime Slabs (FY 2025-26)

The new tax regime is now the default regime. It offers lower slab rates but removes most exemptions and deductions (except standard deduction).

Income RangeTax Rate
Up to ₹3,00,000Nil
₹3,00,001 – ₹7,00,0005%
₹7,00,001 – ₹10,00,00010%
₹10,00,001 – ₹12,00,00015%
₹12,00,001 – ₹15,00,00020%
Above ₹15,00,00030%
🎉 Zero tax up to ₹12.75 lakh: With the Section 87A rebate (income up to ₹12 lakh) and ₹75,000 standard deduction for salaried employees, effectively no income tax is payable on gross salary up to ₹12,75,000 under the new regime.

Old Tax Regime Slabs

Income RangeTax Rate
Up to ₹2,50,000Nil
₹2,50,001 – ₹5,00,0005%
₹5,00,001 – ₹10,00,00020%
Above ₹10,00,00030%

The old regime allows numerous deductions — 80C, 80D, HRA, LTA, home loan interest — that can significantly reduce your taxable income before applying slab rates.

New vs Old Regime — Which Is Better?

The best regime depends entirely on your deductions. As a rule of thumb:

  • Choose new regime if your total deductions are below ₹3.75 lakh (for income above ₹15 lakh)
  • Choose old regime if you claim high deductions: full 80C (₹1.5L), 80D (₹25K+), HRA, home loan interest

The easiest way to decide is to calculate your tax under both regimes and compare. Use ToolNinja's Income Tax Calculator to do this in seconds.

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Key Deductions Under Old Regime

  • Section 80C — Up to ₹1,50,000: EPF, PPF, ELSS, life insurance premiums, home loan principal
  • Section 80D — Up to ₹25,000 (₹50,000 for seniors): Health insurance premiums
  • HRA — House Rent Allowance: actual HRA received or calculated exemption, whichever is lower
  • Section 24(b) — Up to ₹2,00,000: Home loan interest for self-occupied property
  • Standard Deduction — ₹50,000 for salaried employees
  • Section 80CCD(1B) — Additional ₹50,000 for NPS contributions

Surcharge and Cess

On top of your income tax, two additional charges apply:

  • Health & Education Cess — 4% on total income tax (applies to everyone)
  • Surcharge — Additional tax for high earners: 10% on tax if income ₹50L–₹1Cr; 15% for ₹1Cr–₹2Cr; 25% for income above ₹2Cr (new regime)

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Frequently Asked Questions

Under the new tax regime for FY 2025-26: Up to ₹3 lakh — Nil; ₹3–7 lakh — 5%; ₹7–10 lakh — 10%; ₹10–12 lakh — 15%; ₹12–15 lakh — 20%; Above ₹15 lakh — 30%. A standard deduction of ₹75,000 applies for salaried employees.

The new regime is generally better if you have fewer deductions. The old regime is better if you claim significant deductions (HRA, 80C, 80D, home loan interest) that bring your taxable income well below the new regime's slab thresholds. Use ToolNinja's Income Tax Calculator to compare both.

For FY 2025-26, salaried employees get a standard deduction of ₹75,000 under the new tax regime and ₹50,000 under the old tax regime. This reduces your taxable income before applying slab rates.

Under the new tax regime for FY 2025-26, a rebate under Section 87A makes income up to ₹12 lakh effectively tax-free. Combined with the ₹75,000 standard deduction, salaried individuals with gross income up to ₹12.75 lakh pay zero tax.

Surcharge is an additional tax on top of your base income tax for high earners. It applies when income exceeds ₹50 lakh: 10% for ₹50L–₹1Cr, 15% for ₹1Cr–₹2Cr, and 25% for above ₹2Cr (capped under new regime).