Latest Income Slabs FY 2026-2027: Finance Minister Nirmala Sitharaman has kept the income tax slabs for the upcoming financial year FY 2026-2027 unchanged for both the old and new income tax regime. Taxpayers will continue to pay income tax as per the ongoing income tax slabs that are currently effective for FY 2025-2026.
The income tax slabs under the new income tax regime underwent a major overhaul in last year’s Budget and hence this year the expectation was low of the FM bringing any changes to the new and old income tax regimes. This is especially true in the light of the new Income Tax Act which will come into effect in a few months.
"In July 2024, I announced a comprehensive review of the Income Tax Act, 1961. This was completed in a record time and the Income Tax Act, 2025 will come into effect from 1st April, 2026. The simplified Income Tax Rules and Forms will be notified shortly, giving adequate time to taxpayers to acquaint themselves with its requirements. The forms have been redesigned such that ordinary citizens can comply without difficulty," FM Sitharaman said in her Budget speech.
If you are wondering what the income tax slabs for FY 2026-2027 are under the old and the new income tax regime, we have you covered:Latest Income Tax Slabs FY 2026-2027 Under New Tax Regime: Explained
- The basic exemption limit under the new income tax regime is Rs 4 lakh
- Between Rs 4 lakh to Rs 8 lakh income the tax rate is 5%
- From Rs 8 lakh to Rs 12 lakh the tax rate is 10%
- For income between Rs 12 lakh to Rs 16 lakh, a 15% tax rate is applicable
- Rs 16 lakh to Rs 20 lakh income is taxed at 20%
- For income in the range of Rs 20 lakh to Rs 24 lakh, income is taxed at 25%
- If your income is above Rs 24 lakh, then it will be taxed at 30%, which is the highest tax slab.
- In effect, an individual earning around Rs 1 lakh per month pays ZERO or NIL tax. For a monthly income of above Rs 2 lakh, you pay taxes at 30% slab.
| Income Tax Slab | Income Tax Rate |
| 0-4 lakh | Nil |
| 4-8 lakh | 5% |
| 8-12 lakh | 10% |
| 12-16 lakh | 15% |
| 16-20 lakh | 20% |
| 20-24 lakh | 25% |
| Above 24 lakh | 30% |
The above tax slabs are applicable for resident taxpayers and there are no separate tax rates, tax slabs or exemption limits for senior citizens or super senior citizens. The new income tax regime continues to be the default regime.
Latest Income Tax Slabs FY 2026-2027 Under Old Tax Regime: Explained
The old income tax regime has remained unchanged for years now. To the extent that it now needs to be specially opted for at the time of filing the income tax return. In case a taxpayer fails to file his ITR before the July 31 deadline, they cannot file their tax return under the old regime and will automatically be switched to the new tax regime.
While the number of tax exemptions and deductions are very high under the old income tax regime, it also has high tax rates and at very low levels of income too.
- Under the old income tax regime an individual earning up to Rs 2.5 lakh is exempt from tax since that’s the basic exemption limit
- For income above Rs 2.5 lakh and up to Rs 5 lakh, the tax rate is 5%.
- The tax rate for income between Rs 5 lakh to Rs 10 lakh becomes four times at 20%
- The highest tax slab of 30% kicks in for an income of Rs 10 lakh and above.
| Income Tax Slab | Income Tax Rate |
| 0-2.5 lakh | Nil |
| 2.5-5 lakh | 5% |
| 5-10 lakh | 20% |
| Above 10 lakh | 30% |
The above rates are applicable for resident individuals up to the age of 60.
However the basic exemption limit for senior citizens and super senior citizens varies under the old tax regime. For senior citizens above the age of 60 and below 80, the basic exemption limit is Rs 3 lakh. For super senior citizens above the age of 80, the basic exemption limit is Rs 5 lakh.
Some of the popular tax deductions and exemptions available under the old income tax regime are: - Standard deduction (also available under new regime with a Rs 25,000 higher limit compared to Rs 50,000 in old regime)
- House Rent Allowance (HRA)
- Leave Travel Allowance (LTA)
- Section 80C (with popular exemptions including PPF or Public Provident Fund, Provident Fund or PF, equity mutual funds, NPS. The National Pension System has an additional exemption of Rs 50,000)
- Section 80D for medical insurance
- Section 80TTA for bank interest
- Section 80G for donations and charity
- Home Loan Interest Benefit
Latest Income Tax Slabs FY 2026-27: Top FAQs Answered
1. Has Budget 2026 made any changes in the income tax slabs?No, FM Nirmala Sitharaman has not announced any changes in the new income tax regime or the old income tax regime tax slabs. Hence, the current income tax slabs effective FY 2025-26 will continue to be applicable for FY 2026-27.
2. Has the deadline to file revised and belated income tax returns been revised?Yes, in her Union Budget 2026 speech, FM Sitharaman announced that taxpayers can now file a revised or belated income tax return up to March 31 on the payment of a nominal fee.
Smriti Jain is a business and economy journalist with over 15 yea...
Read MoreSmriti Jain is a business and economy journalist with over 15 years of reporting and editing experience. She writes extensively on the Indian economy, infrastructure stock markets, personal finance and Indian Railways. She has also hosted weekly video shows on TOI - TOI Business Bytes and TOI Wallet Talks. A graduate in Economics (H) from Delhi University, she has worked in Economic Times Digital and Financial Express Digital in her previous stints.
Read Less