Income Tax Slab Changes: What You Need to Know
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New Tax Regime vs. Old Tax Regime
Choosing between the Old and New tax regimes remains a critical decision for every taxpayer in India. The government has restructured the New Tax Regime to make it the default option, providing lower tax rates but removing most exemptions like HRA, LTA, and Section 80C deductions.
Slab Structure Under the New Tax Regime (AY 2026-27)
The revised slabs under the New Tax Regime are:
- 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%
Standard Deduction and Rebate
Under the New Tax Regime, a standard deduction of ₹75,000 is allowed for salaried individuals. Furthermore, the tax rebate under Section 87A has been increased, meaning individuals with a taxable income of up to ₹12,00,000 (₹12,75,000 for salaried taxpayers after the standard deduction) pay zero income tax under the New Regime.
Which Regime Should You Choose?
For individuals with substantial investments in tax-saving instruments (PPF, ELSS, Insurance, Home Loan Interest under Section 24), the Old Tax Regime may still be beneficial. However, for those looking for simpler compliance without locking up capital in long-term investments, the New Tax Regime is highly attractive. Speak to us for a custom comparative report based on your numbers.
Dinesh Singathi is the founder of TAXCCOUNTS PRO. He specializes in cross-border taxation, helping NRIs, startups and global companies structure their compliance and assets correctly.
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