What are the new tax regime slabs for FY 2025-26 (AY 2026-27)?

The new tax regime slabs for FY 2025-26 are: Nil up to ₹4 lakh, 5% from ₹4L–8L, 10% from ₹8L–12L, 15% from ₹12L–16L, 20% from ₹16L–20L, 25% from ₹20L–24L, and 30% above ₹24 lakh. Section 87A rebate of ₹60,000 applies if taxable income (after standard deduction) is up to ₹12 lakh — making income up to ₹12.75 lakh effectively zero-tax for salaried individuals after ₹75,000 standard deduction.

What is marginal relief in income tax FY 2025-26?

Marginal relief ensures that the extra tax paid when crossing a threshold is not more than the extra income earned above that threshold. For FY 2025-26 New Regime: if taxable income slightly exceeds ₹12 lakh (the 87A rebate threshold), marginal relief caps the tax to the amount by which income exceeds ₹12 lakh. Example: if taxable income is ₹12.10 lakh, without marginal relief tax = ₹18,000; with marginal relief tax = ₹10,000 (only ₹10,000 above ₹12L). Similarly, marginal relief applies at surcharge thresholds: ₹50L, ₹1Cr, ₹2Cr, ₹5Cr.

How is income tax calculated with capital gains in FY 2025-26?

Capital gains are taxed separately from regular income in India. STCG (Short-Term Capital Gains) on equity: 20% (increased from 15% in Budget 2024, effective 23 Jul 2024). LTCG (Long-Term Capital Gains) on equity: 12.5% on gains above ₹1.25 lakh per year (increased from ₹1 lakh, effective 23 Jul 2024). STCG on debt/property: added to income and taxed at slab rate. LTCG on debt (24+ months): 12.5% without indexation. Capital gains are added on top of regular income for slab determination but taxed at their own rates.

Which tax regime is better in FY 2025-26 — old or new?

For FY 2025-26, the new regime wins for most salaried employees. The new regime is better if: your total deductions (80C+HRA+80D+NPS+home loan) are under ₹3.75 lakh for income above ₹15.75L; or your income is below ₹12.75L (zero tax under new regime). The old regime wins only if you have large deductions: full 80C (₹1.5L) + NPS 80CCD(1B) (₹50K) + HRA (significant) + home loan interest (₹2L) + 80D (₹50K) — totalling ₹5L+ in deductions. Use this calculator to find your exact break-even point.

What is the standard deduction in FY 2025-26?

The standard deduction for salaried employees and pensioners is ₹75,000 under the New Regime for FY 2025-26 (Budget 2024). Under the Old Regime, standard deduction remains ₹50,000. This deduction is automatically applied from gross salary before calculating taxable income. For family pensioners, the standard deduction is ₹25,000 (one-third of pension or ₹25,000, whichever is lower).

What is the 87A rebate for FY 2025-26?

Under the New Regime for FY 2025-26: Section 87A rebate is ₹60,000 if net taxable income does not exceed ₹12 lakh. This means zero income tax payable if taxable income ≤ ₹12L. For salaried employees with ₹75,000 standard deduction, gross salary up to ₹12.75 lakh = zero tax under new regime. Under the Old Regime: 87A rebate is ₹12,500 for income up to ₹5 lakh. Marginal relief applies just above ₹12L threshold in the new regime.

What is the NPS deduction under 80CCD(2) in new regime FY 2025-26?

Under the New Tax Regime, employer's NPS contribution under Section 80CCD(2) is deductible up to 14% of basic salary (raised from 10% in Budget 2024, effective FY 2024-25). This is the ONLY NPS deduction available in the new regime — employee's own 80CCD(1) and 80CCD(1B) contributions are NOT deductible under new regime. Basic salary is typically 40–50% of CTC. Example: ₹50,000 basic salary → max 80CCD(2) = ₹7,000/month = ₹84,000/year deductible even under new regime.

What are the surcharge rates for FY 2025-26?

Surcharge on income tax for FY 2025-26: 10% surcharge for income ₹50L–1Cr; 15% for ₹1Cr–2Cr; 25% for ₹2Cr–5Cr; 25% for above ₹5Cr (capped at 25% under new regime — no 37% surcharge for new regime). Old regime: 37% surcharge for income above ₹5Cr. Marginal relief applies at each surcharge threshold to ensure incremental income doesn't result in more tax than the income itself. Plus 4% Health and Education Cess on (tax + surcharge).

Can I switch from new to old tax regime in FY 2025-26?

Salaried individuals (without business income) can switch between old and new regime every year when filing ITR for FY 2025-26. You must declare your regime choice to your employer at the start of FY 2025-26 for correct TDS. You can change at ITR filing. The new regime is now the default — you must explicitly opt for the old regime. Business owners and professionals can switch only once from old to new and cannot revert back.

Income Tax Calculator FY 2025-26 (AY 2026-27) — New & Old Regime with Marginal Relief & Capital Gains

Calculate your exact income tax for FY 2025-26 under both regimes. Includes marginal relief, capital gains, 80CCD(2) NPS, surcharge, and old vs new regime comparison with break-even deduction point.

📌 New Regime: Zero Tax up to ₹12.75L ✅ 87A Rebate: ₹60,000 (up to ₹12L taxable) 🆕 Marginal Relief Calculated 📈 Capital Gains: STCG 20% / LTCG 12.5% 📋 80CCD(2): 14% of Basic (New Regime)

Tax Calculator FY 2025-26

Your Income Tax Old vs New Regime

Fill income details below. Both regimes calculated simultaneously — verdict and saving shown live.

💼 Income Details

Gross Annual Income (CTC / Income)₹12.00 L

₹1 Lakh₹1 Crore

Basic Salary (% of CTC)50%

20%70%

Monthly Employer NPS (80CCD-2)₹0

₹0₹50,000/mo

📋 Old Regime Deductions

Section 80C (EPF + ELSS + LIC...)₹1.50 L

₹0₹1.5L (Max)

HRA Exemption (Actual)₹0

₹0₹6L

Section 80D (Health Insurance)₹25,000

₹0₹1L (Sr Citizen)

NPS 80CCD(1B) — Old Regime Only₹50,000

₹0₹50K (Max)

Home Loan Interest (Sec 24b)₹0

₹0₹2L (Max)

📈 Capital Gains (Optional)

LTCG on Equity / Equity MF₹0

₹0₹30L

STCG on Equity / Equity MF₹0

₹0₹30L

✅ New Regime saves ₹0 more — calculating...

📈 New Regime

₹0

incl. cess & surcharge

📋 Old Regime

₹0

incl. cess & surcharge

🆔 New Regime Slab-Wise Breakdown

Income Slab	Rate	Tax

🚀 Optimise My Tax FY 2025-26 on WhatsApp

Vikash Royal ARN-356458
B.E. | MBA Finance | NISM Certified | 7+ Years in Finance

🆔 Income Tax Slabs FY 2025-26 — New Regime vs Old Regime

Budget 2024 introduced revised slabs and enhanced rebate for the New Regime, effective FY 2025-26. Standard deduction: ₹75,000 (New) and ₹50,000 (Old).

Income Range	New Regime Rate	Max Tax (New)	Old Regime Rate	Max Tax (Old)
Up to ₹2,50,000	Nil	₹0	Nil	₹0
₹2,50,001 – ₹4,00,000	Nil (New Regime)	₹0	5%	₹7,500
₹4,00,001 – ₹5,00,000	5%	₹5,000	5%	₹5,000
₹5,00,001 – ₹8,00,000	5%	₹15,000	20%	₹60,000
₹8,00,001 – ₹10,00,000	10%	₹20,000	20%	₹40,000
₹10,00,001 – ₹12,00,000	15%	₹30,000	30%	₹60,000
₹12,00,001 – ₹15,00,000	20%	₹60,000	30%	₹90,000
₹15,00,001 – ₹16,00,000	20%	₹20,000	30%	₹30,000
₹16,00,001 – ₹20,00,000	25%	₹1,00,000	30%	₹1,20,000
₹20,00,001 – ₹24,00,000	25%	₹1,00,000	30%	₹1,20,000
Above ₹24,00,000	30%	—	30%	—

Plus 4% Health & Education Cess on total tax. Surcharge: 10% (>₹50L income), 15% (>₹1Cr), 25% (>₹2Cr) — capped at 25% under new regime (vs 37% max under old regime for >₹5Cr). Section 87A rebate: ₹60,000 (New Regime, taxable income ≤₹12L) and ₹12,500 (Old Regime, taxable income ≤₹5L). Marginal relief applies at rebate threshold and each surcharge level.

⚖ Old vs New Regime — Tax Comparison at Different Income Levels FY 2025-26

Comparison with standard deduction + 80C ₹1.5L + NPS ₹50K + 80D ₹25K + Home Loan ₹2L = ₹4.5L total deductions (Old Regime). No deductions for New Regime except standard deduction.

Annual Income	New Regime Tax (incl. cess)	Old Regime Tax (incl. cess, with ₹4.5L deductions)	Who Wins?	Saving
₹7,00,000	₹0	₹0	⚡ Equal	—
₹9,00,000	₹10,400	₹0	📋 Old Regime	₹10,400
₹12,00,000	₹0*	₹46,800	📈 New Regime	₹46,800
₹12,75,000	₹0*	₹54,600	📈 New Regime	₹54,600
₹15,00,000	₹1,56,000	₹1,25,580	📋 Old Regime	₹30,420
₹20,00,000	₹3,61,400	₹3,24,480	📋 Old Regime	₹36,920
₹30,00,000	₹6,84,320	₹6,63,780	📋 Old Regime	₹20,540
₹50,00,000	₹13,29,200	₹13,79,300	📈 New Regime	₹50,100
₹1,00,00,000	₹28,56,000	₹29,88,000	📈 New Regime	₹1,32,000

* Zero tax under new regime at ₹12L/₹12.75L due to 87A rebate (₹60,000) — income up to ₹12L taxable income pays zero. ₹12.75L gross = ₹12L taxable after ₹75K standard deduction. Old regime deductions assumed: Standard ₹50K + 80C ₹1.5L + NPS 80CCD(1B) ₹50K + 80D ₹25K + Home loan ₹2L = ₹4.25L total + ₹50K standard = ₹4.75L. Old regime wins between ₹8L–₹45L for taxpayers with large deductions. New regime wins below ₹8L and above ₹45L.

🆕 Marginal Relief in Income Tax FY 2025-26 — How It Works

Marginal relief ensures the tax paid does not exceed the income above the threshold. It applies at the 87A rebate limit (₹12L) and at each surcharge threshold (₹50L, ₹1Cr, ₹2Cr, ₹5Cr).

Taxable Income	Normal Tax (Before Relief)	Income Above Threshold	Marginal Relief	Final Tax Payable
₹12,00,000 (exact)	₹0 (87A rebate)	₹0	—	₹0
₹12,10,000	₹18,000 (without relief)	₹10,000 above ₹12L	₹8,000 relief	₹10,000
₹12,50,000	₹22,500	₹50,000 above ₹12L	—	₹22,500
₹50,10,000	₹13,53,000 + 10% surcharge	₹10,000 above ₹50L	Surcharge capped at ₹10K	Relief applied
₹1,00,10,000	₹29,07,000 + 15% surcharge	₹10,000 above ₹1Cr	Surcharge capped	Relief applied

Marginal relief at 87A limit (₹12L): if taxable income = ₹12L + X, then tax = minimum of (normal tax) OR (X). The calculator above applies marginal relief automatically. Marginal relief at surcharge thresholds: surcharge limited so total additional tax does not exceed additional income above the threshold. Always crosses a threshold smoothly — never a cliff-edge where earning ₹1 more results in far more tax.

📈 Capital Gains Tax Rates FY 2025-26 — After Budget 2024 Changes

Budget 2024 revised capital gains tax rates effective 23 July 2024. These apply for FY 2025-26 (AY 2026-27) for all transactions after that date.

📈

Listed Equity / Equity MF

STCG: 20% (held <12 months)

LTCG: 12.5% on gains above ₹1.25L (held 12+ months)

Increased from 15%/10% in Budget 2024. ₹1.25L LTCG exemption per year.

🏠

Property / Real Estate

STCG: Slab rate (held <24 months)

LTCG: 12.5% without indexation (held 24+ months)

Indexation removed for property sold after 23 Jul 2024. Option to choose 20% with indexation for property bought before 23 Jul 2024.

🎉

Gold / SGBs / Gold ETF

STCG: Slab rate (held <24 months)

LTCG: 12.5% (held 24+ months) | SGB maturity: Tax-Free

SGB capital gains at 8-yr maturity completely tax-free. Gold ETF held 24+ months: 12.5% LTCG.

📋

Debt MF / FD / Bonds

STCG: Slab rate (all tenures)

LTCG: Slab rate (indexation removed for debt MF from Apr 2023)

Debt MF held any duration: taxed at slab rate. No LTCG benefit for debt MF from Apr 2023.

💰

Unlisted Shares / Startups

STCG: Slab rate (held <24 months)

LTCG: 12.5% without indexation (held 24+ months)

Changed from 20% with indexation to 12.5% without indexation for unlisted shares.

💼

Equity-Oriented Hybrid MF

STCG: 20% (held <12 months, equity >65%)

LTCG: 12.5% on gains above ₹1.25L (held 12+ months)

Same as equity MF if equity allocation >65%. Below 65%: treated as debt MF.

Capital gains are added on top of regular income for slab determination but taxed at their own specific rates, not slab rates (except STCG on debt and slab-rate LTCG items). LTCG on equity is tax-free up to ₹1.25 lakh per year — plan redemptions across financial years to optimise this exemption.

💡 4 Smart Tax Strategies for FY 2025-26

Maximise your take-home under the correct regime with these proven tax optimisation moves.

✅

New Regime: Maximise 80CCD(2) — The Only Deduction Left

Under the new regime, the only remaining deduction for salaried employees is employer NPS contribution under 80CCD(2) — up to 14% of basic salary (₹1,68,000/year if basic is ₹1L/month). Ask your employer to restructure CTC to include employer NPS. At 30% slab, this saves ₹50,400/year in tax even under the new regime — the only major tax saving avenue available.

🆕

Harvest ₹1.25L LTCG Tax-Free Every Year

LTCG up to ₹1.25 lakh per year on equity/equity MF is completely tax-free. If your equity portfolio has unrealised gains, redeem and immediately reinvest ₹1.25L of gains every March. This resets your cost basis and eliminates future LTCG on those gains — over 10 years this saves ₹12,500–₹15,000 annually (12.5% × ₹1.25L) with zero actual exit from your investments.

🔄

Old Regime: Old vs New Break-Even Is ₹3.75L in Deductions

For incomes between ₹10L–₹50L, the old regime saves more tax ONLY if you have genuine deductions above the break-even point (~₹3.75L for ₹15L income). Add up: 80C (₹1.5L) + NPS 80CCD(1B) (₹50K) + 80D (₹50K for senior parents) + HRA + home loan interest. If your deductions cross ₹3.75L, stick with old regime. Below that, new regime saves more. Use this calculator to find your exact break-even.

🚫

Declare Regime to Employer in April — Don't Wait

If you don't declare your tax regime to your employer in April 2025, they default to the new regime for TDS. If you're in the old regime with large deductions, you'll overpay TDS all year and wait for ITR refund. Declare your regime choice (Form 10-IEA for old regime) to your employer in the first week of April each financial year. You can still change at ITR filing — but correct TDS avoids cash flow issues all year.

❓ Income Tax Calculator FY 2025-26 — Frequently Asked Questions

Most searched income tax questions for FY 2025-26 (AY 2026-27) — answered with exact figures.

New Regime slabs for FY 2025-26 (Budget 2024):

• Up to ₹4,00,000 → Nil
• ₹4,00,001 – ₹8,00,000 → 5% (max ₹20,000)
• ₹8,00,001 – ₹12,00,000 → 10% (max ₹40,000)
• ₹12,00,001 – ₹16,00,000 → 15% (max ₹60,000)
• ₹16,00,001 – ₹20,00,000 → 20% (max ₹80,000)
• ₹20,00,001 – ₹24,00,000 → 25% (max ₹1,00,000)
• Above ₹24,00,000 → 30%

Plus 4% Health & Education Cess. Section 87A rebate of ₹60,000 applies if taxable income ≤ ₹12L (after standard deduction of ₹75,000). For salaried employees: gross salary up to ₹12.75L = zero tax.

Marginal relief prevents a "cliff-edge" where earning ₹1 more results in a tax jump larger than that ₹1.

At 87A rebate threshold (₹12L taxable income):
Formula: Tax payable = Minimum of (Normal Tax) OR (Income above ₹12L)
• Taxable income = ₹12,10,000 → Normal tax = ₹18,000 | Income above ₹12L = ₹10,000 → Tax = ₹10,000 (marginal relief of ₹8,000)
• Taxable income = ₹12,60,000 → Normal tax = ₹22,500 | Income above ₹12L = ₹60,000 → Tax = ₹22,500 (no relief needed)

At surcharge thresholds: same logic — surcharge is capped so that the additional tax from surcharge doesn't exceed the additional income above the threshold. This calculator applies all marginal relief automatically.

Capital gains are taxed at their own rates, separate from regular income:

Step 1: Calculate regular income tax (salary/business income minus deductions) at slab rates.
Step 2: Add capital gains tax separately:
• LTCG on equity/equity MF: 12.5% on gains above ₹1.25L
• STCG on equity/equity MF: 20%
• LTCG on property/gold (24+ months): 12.5% without indexation
• STCG on debt/property: added to regular income, taxed at slab

Step 3: Capital gains are added to regular income only for surcharge computation (to determine the surcharge rate bracket). Add 4% cess on total tax. Use the capital gains sliders in the calculator above for exact computation.

For ₹12 lakh gross salary:

New Regime: Taxable income = ₹12L − ₹75K standard deduction = ₹11.25L → Tax = ₹72,500 BUT 87A rebate of ₹60,000 applies since taxable ≤₹12L → Zero Tax. Take-home = ₹12L.

Old Regime: Even with all deductions (80C + NPS + 80D + standard), taxable income ≈ ₹6.75L → Tax ≈ ₹46,800 → Zero after 87A rebate (₹5L limit). Actually ₹46,800 tax under old regime.

Winner: New Regime saves ₹46,800 at ₹12L salary. For ₹12.75L: new regime = ₹0 (under ₹12L taxable after ₹75K std deduction), old regime ≈ ₹54,600. New regime wins decisively at this income level.

Section 80CCD(2) allows deduction of employer's NPS contribution up to 14% of basic salary — available even under the New Tax Regime (raised from 10% in Budget 2024).

How to calculate:
Basic salary = 50% of CTC (typical). At ₹10L CTC: Basic = ₹5L/year. 14% of ₹5L = ₹70,000 deductible under 80CCD(2) in new regime.

Tax saving at 30% slab: ₹70,000 × 30% × 1.04 (cess) = ₹21,840 tax saved annually — even in the new regime.

Ask your HR to restructure CTC to include employer NPS as part of your compensation. This is the only major remaining deduction for new regime salaried employees.

Surcharge rates (same for both regimes, except 37% cap):

• Income ₹50L–₹1Cr: 10% surcharge on income tax
• ₹1Cr–₹2Cr: 15% surcharge
• ₹2Cr–₹5Cr: 25% surcharge
• Above ₹5Cr: 25% surcharge (new regime) — vs 37% under old regime

Plus 4% Health & Education Cess on (tax + surcharge). Marginal relief applies at each surcharge threshold — the calculator above handles this automatically. The 25% cap on surcharge under the new regime makes it attractive for very high-income earners (₹5Cr+).

Choose the old regime in FY 2025-26 only if your total deductions exceed the regime break-even for your income:

• Income ₹10L–₹15L: Old regime wins if deductions > ~₹3.5–3.75L
• Income ₹15L–₹25L: Old regime wins if deductions > ~₹3.75–4.25L
• Income > ₹50L: New regime often wins due to 37%→25% surcharge cap

Old regime is typically worth it if you have:
✓ Full 80C (₹1.5L) + NPS 80CCD(1B) (₹50K) + significant HRA + home loan interest ₹2L + 80D (₹50K for senior parents)
Total: ₹5L+ in deductions → old regime likely wins between ₹12L–₹40L income.

Use the calculator above — it shows you the exact tax under both regimes and which one saves more for your specific situation.

🚁 Optimise Your Tax for FY 2025-26 — Get a Personal Tax Plan

Every rupee saved in tax is a rupee that can be invested. Vikash Royal will review your salary structure, deductions, and capital gains to find the exact regime that minimises your FY 2025-26 tax — and help you restructure CTC for maximum 80CCD(2) benefit. SEBI-Registered. ARN: ARN-356458

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