What are the new tax regime slabs for FY 2026-27?

The new tax regime slabs for FY 2026-27 (AY 2027-28) are unchanged from FY 2025-26 as per Budget 2026: 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%. Plus 4% education cess on total tax. Surcharge applies for income above ₹50 lakh.

Is income up to ₹12 lakh tax-free in FY 2026-27?

Yes. Under the new tax regime for FY 2026-27, salaried individuals with gross income up to ₹12,75,000 pay zero tax. Here's how: Gross income ₹12,75,000 minus standard deduction ₹75,000 equals taxable income of ₹12,00,000. Tax on ₹12,00,000 = ₹60,000. Section 87A tax rebate = ₹60,000. Net tax = ₹0. So the effective tax-free limit for salaried employees is ₹12,75,000 (not just ₹12,00,000). For non-salaried individuals without standard deduction, the tax-free limit is ₹12,00,000.

What is the standard deduction in new tax regime FY 2026-27?

The standard deduction under the new tax regime for FY 2026-27 is ₹75,000 for salaried employees and pensioners. This was increased from ₹50,000 to ₹75,000 in Budget 2024 and remains unchanged in Budget 2026. The standard deduction is automatically applied — no documentation or proof required. It reduces your taxable income from gross salary before applying tax slabs.

What deductions are allowed in the new tax regime?

The new tax regime allows very limited deductions compared to the old regime: Standard deduction of ₹75,000 (salaried/pensioners); Employer NPS contribution under Section 80CCD(2) — up to 14% of basic salary; Family pension standard deduction of ₹25,000 or 1/3rd of pension (whichever is lower); Agniveer Corpus Fund deduction under Section 80CCH. All other deductions — 80C, 80D, HRA, LTA, home loan interest, 80CCD(1B) NPS — are NOT available under the new regime.

Old regime vs new regime — which is better for FY 2026-27?

For most salaried individuals with income below ₹15 lakh and limited 80C/80D investments, the new regime is now better. The new regime wins when: your total deductions (80C + 80D + HRA + home loan) are less than ₹3,75,000 for ₹15L income. The old regime still wins if: you have home loan interest above ₹2L, HRA exemption above ₹1.5L, and maximum 80C + 80D contributions. Use our Old vs New Regime Calculator for your exact comparison.

What is the surcharge on income tax in new regime FY 2026-27?

Surcharge rates under the new regime for FY 2026-27: Income ₹50L–₹1Cr: 10% surcharge on tax; Income ₹1Cr–₹2Cr: 15% surcharge; Income ₹2Cr–₹5Cr: 25% surcharge; Income above ₹5Cr: 25% surcharge (capped at 25% under new regime — was 37% in old regime). Marginal relief is applied at each surcharge threshold so actual tax never exceeds income in the surcharge slab. Plus 4% education cess on (tax + surcharge).

What is Section 87A tax rebate in FY 2026-27?

Section 87A provides a tax rebate of up to ₹60,000 for taxpayers whose net taxable income does not exceed ₹12,00,000 under the new tax regime. If your taxable income is ₹12L or below, your tax liability is completely waived — effectively making ₹12L income tax-free (₹12.75L for salaried with standard deduction). Marginal relief under 87A ensures that taxpayers just above ₹12L (e.g., ₹12.1L) don't pay more tax than the excess income above ₹12L.

What is the NPS deduction under 80CCD(2) in new regime?

Section 80CCD(2) allows deduction for employer's contribution to NPS — up to 14% of basic salary (raised from 10% to 14% in Budget 2024). This is one of the few deductions available under the new tax regime. For example, if your basic salary is ₹50,000/month, employer can contribute ₹7,000/month (14%) to your NPS account, reducing your taxable income by ₹84,000/year. This deduction is available under both Old and New tax regimes, making it a tax-efficient benefit regardless of regime choice.

Income Tax New Regime Calculator FY 2026-27 (AY 2027-28)

Calculate your exact income tax under the new tax regime for FY 2026-27. Instant slab-wise breakdown with standard deduction, NPS 80CCD(2), Section 87A rebate, surcharge, and Old vs New comparison — all live.

📌 FY 2026-27 (AY 2027-28) ✅ ₹12L Tax-Free (New Regime) 🏠 Std Deduction: ₹75,000 📋 87A Rebate: ₹60,000 ⚖ Old vs New Comparison Live

Tax Calculator FY 2026-27

New Regime Tax with Old vs New Comparison

Enter your gross income, employer NPS contribution, and select regime. Slab-wise tax, rebate, surcharge, and in-hand salary all update live.

Gross Annual Income (CTC)₹12.00 L

₹1 Lakh₹1 Crore

Monthly Employer NPS (80CCD-2)₹0

₹0₹50,000/mo

Other Income (FD interest, rent etc.)₹0

₹0₹20 Lakh

✅ Your tax is ₹0 — fully covered by 87A rebate!

₹0 total tax

In-Hand Tax + Cess Deductions

🚀 Plan Tax + Investments for FY 2026-27

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

📈 New Tax Regime Slabs — FY 2026-27 (AY 2027-28)

No change in tax slabs from FY 2025-26 as per Budget 2026. Tax-free income up to ₹12,00,000 for all taxpayers (₹12,75,000 for salaried with standard deduction) via Section 87A rebate.

Up to ₹4,00,000

NIL — Tax Free

₹4L – ₹8L

₹20,000 max tax in this slab

₹8L – ₹12L

₹40,000 max tax in this slab

10%

₹12L – ₹16L

₹60,000 max tax in this slab

15%

₹16L – ₹20L

₹80,000 max tax in this slab

20%

₹20L – ₹24L

₹1,00,000 max tax in this slab

25%

Above ₹24L

30% on amount above ₹24L

30%

Plus 4% Education Cess on total tax. Surcharge: 10% (>₹50L), 15% (>₹1Cr), 25% (>₹2Cr) — capped at 25% under new regime. Section 87A rebate of ₹60,000 makes net tax zero for taxable income up to ₹12,00,000. Standard deduction of ₹75,000 for salaried employees — so gross salary up to ₹12,75,000 = zero tax.

⚖ Old vs New Regime — Live Tax Comparison for Your Income

Based on the income and deductions you entered above. The calculator updates this comparison live as you adjust sliders.

📅 Income Tax Calculation Table — FY 2026-27 New Regime

Slab-wise tax computation at various income levels. After standard deduction of ₹75,000 for salaried. Includes Section 87A rebate and 4% education cess.

Gross Salary	Taxable Income (after ₹75K std dedn)	Tax Before Cess	87A Rebate	Education Cess (4%)	Total Tax Payable	Eff. Tax Rate
₹8,00,000	₹7,25,000	₹0 (87A rebate)	₹0	₹0	₹0	0%
₹10,00,000	₹9,25,000	₹0 (87A rebate)	₹0	₹0	₹0	0%
₹12,00,000	₹11,25,000	₹0 (87A rebate)	₹0	₹0	₹0	0%
₹12,75,000	₹12,00,000	₹60,000 → Rebate ₹60K	₹60,000	₹0	₹0	0%
₹13,00,000	₹12,25,000	₹63,750	₹0	₹2,550	₹66,300	5.1%
₹15,00,000	₹14,25,000	₹93,750	₹0	₹3,750	₹97,500	6.5%
₹20,00,000	₹19,25,000	₹2,18,750	₹0	₹8,750	₹2,27,500	11.4%
₹25,00,000	₹24,25,000	₹3,73,750	₹0	₹14,950	₹3,88,700	15.5%
₹30,00,000	₹29,25,000	₹5,23,750	₹0	₹20,950	₹5,44,700	18.2%
₹50,00,000	₹49,25,000	₹11,23,750	₹0	₹44,950	₹11,68,700	23.4%

Standard deduction of ₹75,000 applied for all salaried rows. Section 87A rebate fully covers tax up to ₹12,00,000 taxable income (gross salary ₹12,75,000). No surcharge for income below ₹50L. Education cess 4% applied on final tax after rebate. Values approximate — use the live calculator above for exact figures including NPS deduction and marginal relief.

💡 4 Smart Tax Planning Tips for FY 2026-27

Key actions to reduce your tax liability in FY 2026-27 under both regimes.

✅

New Regime is Better for Most Below ₹15L

For salaried individuals with gross income below ₹15 lakh and limited investments, the new regime almost always wins in FY 2026-27. The ₹12,75,000 zero-tax threshold, lower slab rates, and no paperwork make it compelling. Only switch to old regime if total deductions (80C + 80D + HRA + home loan interest) exceed ₹3.75 lakh for ₹15L income. Use the "Compare Both" mode above to check your exact case.

🏠

Employer NPS 80CCD(2) Works in Both Regimes

Section 80CCD(2) — employer's NPS contribution up to 14% of basic salary — is deductible under BOTH Old and New tax regimes. Ask your employer to restructure your CTC to include 14% NPS contribution. On ₹30,000 basic, this saves ₹4,200/month in taxable income = ₹50,400/year deduction. At 20% slab, that's ₹10,080 saved annually — at zero cost to your in-hand if structured as part of CTC.

📋

Old Regime: Maximise All 5 Deduction Categories

To make old regime worth it, stack all 5 deduction categories: (1) 80C: ₹1.5L via EPF + ELSS + PPF, (2) 80D: ₹25K self + ₹50K senior citizen parents = ₹75K, (3) HRA: if renting — substantial exemption, (4) Home loan interest: up to ₹2L under Sec 24b, (5) 80CCD(1B): extra ₹50K NPS. Total potential = ₹4.75L+ in deductions. Only then does old regime beat new regime above ₹15L income.

🚫

Switching Regime: Salaried Can Decide Every Year

Salaried employees can switch between old and new regime every year when filing ITR — you are NOT locked in permanently. However, business income taxpayers can switch back to old regime only once in a lifetime. Declare your preferred regime to your employer at the start of each financial year for TDS purposes. If you don't declare, employer defaults to new regime from FY 2024-25 onwards. You can still switch at ITR filing time regardless of TDS regime.

❓ Income Tax New Regime FY 2026-27 — FAQ

Most searched income tax questions for FY 2026-27 (AY 2027-28) — answered clearly.

The new tax regime slabs for FY 2026-27 (AY 2027-28) are unchanged from FY 2025-26 as per Budget 2026:

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

Plus 4% education cess. Section 87A rebate of ₹60,000 makes net tax zero for taxable income up to ₹12,00,000. For salaried employees with ₹75,000 standard deduction, gross salary up to ₹12,75,000 = zero tax.

Yes — and for salaried employees, the actual zero-tax limit is ₹12,75,000:

Gross Salary: ₹12,75,000
Less Standard Deduction: −₹75,000
Taxable Income: ₹12,00,000
Tax on ₹12,00,000: ₹60,000 (computed slab-wise)
Less 87A Rebate: −₹60,000
Net Tax = ₹0

The key: Section 87A rebate of ₹60,000 wipes out the entire tax liability for taxable income up to ₹12L. But marginal relief applies just above ₹12L — so taxpayers with taxable income slightly above ₹12L pay only the excess tax on income above ₹12L, not the full slab tax.

The new regime is better for most taxpayers in FY 2026-27. The break-even point (where both regimes give equal tax) based on income:

• ₹10L income: New regime better unless deductions > ₹2.75L
• ₹15L income: New regime better unless deductions > ₹3.75L
• ₹20L income: New regime better unless deductions > ₹4.25L
• ₹30L income: Old regime better if deductions > ₹5.25L

Old regime still wins when: you have a home loan (₹2L Sec 24b), HRA (₹1.5L+), max 80C (₹1.5L), max 80D (₹75K), and NPS 80CCD(1B) (₹50K) — total ~₹5.75L deductions. Use the Compare mode in the calculator above for your exact figures.

The new regime allows very few deductions — this is its main tradeoff for lower tax rates:

Allowed under New Regime:
✅ Standard deduction: ₹75,000 (salaried/pensioners)
✅ Employer NPS contribution: 80CCD(2) up to 14% of basic salary
✅ Agniveer Corpus Fund: 80CCH
✅ Family pension standard deduction: ₹25,000 or 1/3rd

NOT allowed under New Regime:
❌ 80C (PF, ELSS, PPF, LIC, NSC, tax-saving FD)
❌ 80D (health insurance)
❌ HRA exemption
❌ LTA exemption
❌ Home loan interest (Sec 24b)
❌ 80CCD(1B) — personal NPS contribution
❌ 80E, 80G, 80TTA/TTB and all other deductions

Section 87A provides a tax rebate of up to ₹60,000 for FY 2026-27 under the new tax regime, for taxpayers whose net taxable income does not exceed ₹12,00,000.

How it works: If your taxable income ≤ ₹12L, the 87A rebate equals your entire computed tax (up to ₹60,000), making net tax = ₹0.

Marginal relief: For taxable income just above ₹12L (e.g., ₹12.1L), the actual tax payable = excess over ₹12L (i.e., ₹10,000) — not the full computed slab tax. This prevents a cliff-edge situation where earning ₹1 more causes disproportionate tax.

Under the old regime, 87A rebate is ₹12,500 for taxable income up to ₹5L — significantly less generous than the new regime.

Surcharge is an additional levy on high-income taxpayers:

• Taxable income ₹50L – ₹1Cr: 10% surcharge on tax
• Taxable income ₹1Cr – ₹2Cr: 15% surcharge
• Taxable income above ₹2Cr: 25% surcharge (capped at 25% under new regime)

Under the old regime, surcharge could go up to 37% for income above ₹5Cr — but the new regime caps it at 25%, making the new regime significantly better for very high incomes above ₹5Cr.

Marginal relief is applied at each surcharge threshold. Education cess of 4% applies on (tax + surcharge).

For FY 2026-27 (AY 2027-28):

• Non-audit cases (salaried individuals, most taxpayers): 31st July 2027
• Audit cases (businesses requiring tax audit): 31st October 2027
• Belated ITR (after due date with penalty): Up to 31st December 2027 with penalty of ₹1,000–₹5,000

File on time to: avoid penalties, carry forward capital losses, claim refunds faster, and avoid interest on unpaid tax. The new tax regime is the default from FY 2024-25 — if you want to choose old regime, you must explicitly opt for it in your ITR filing.

🚀 Optimise Your Tax + Investments for FY 2026-27

Knowing your tax is only the first step. Vikash Royal will help you pick the right regime, structure your salary for maximum NPS 80CCD(2) benefit, and build an investment plan (ELSS, SIPs, NPS) that minimises tax while maximising wealth. SEBI-Registered. ARN: ARN-356458

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