The new regime is the default for tax year 2026-27 (April 2026 - March 2027), the first year under the Income-tax Act, 2025. Rates are unchanged from FY 2025-26.
Slabs
| Taxable 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% |
Plus 4% health and education cess, and surcharge above ₹50 lakh (capped at 25% in the new regime).
Rebate and marginal relief
A rebate of up to ₹60,000 makes taxable income up to ₹12 lakh tax-free. Salaried people also get a ₹75,000 standard deduction, so a salary of ₹12.75 lakh pays no tax.
Just above ₹12 lakh, marginal relief means your tax can't exceed the income above ₹12 lakh. Example: taxable income ₹12.25 lakh → slab tax ₹63,750, but relief limits it to ₹25,000 (+ cess = ₹26,000).
Tax at common salaries (new regime, incl. cess)
| Salary | Taxable (after ₹75,000) | Tax |
|---|---|---|
| ₹12,75,000 | ₹12,00,000 | ₹0 |
| ₹15,00,000 | ₹14,25,000 | ₹97,500 |
| ₹20,00,000 | ₹19,25,000 | ₹1,92,400 |
| ₹25,00,000 | ₹24,25,000 | ₹3,19,800 |
| ₹30,00,000 | ₹29,25,000 | ₹4,75,800 |
What's allowed in the new regime
- Standard deduction ₹75,000 (salary/pension); family pension deduction.
- Employer's NPS contribution up to 14% of basic + DA.
- Agniveer corpus contributions.
Not allowed: 80C, 80D, HRA, LTA, home loan interest on a self-occupied house, 80TTA/TTB, professional tax.
Should you switch to the old regime?
Only if your deductions are large. At ₹15 lakh, the old regime needs about ₹5.9 lakh of total deductions (including its ₹50,000 standard deduction) to beat the new one. Check your break-even.