Income Tax Slab Rates in India for FY 2026-27

Understanding income tax slab rates is an important part of personal financial planning. Whether you are a salaried employee, a self-employed professional, or a business individual, knowing how income is taxed helps you plan savings, expenses, and long-term goals more effectively.

For FY 2026–27, taxpayers can choose between the new tax regime and the old tax regime. Both have different structures, benefits, and limitations. Choosing the right option depends on income level, deductions, and tax-saving preferences.

Income Tax Slabs in India for FY 2026–27 (New Tax Regime)

The government has introduced revised slabs under the new regime to simplify taxation and reduce dependency on exemptions.

New Tax Regime- Income Tax Slab Rates

Annual Taxable Income	Tax Rate
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%

Under this structure, tax slabs are more gradual, which helps reduce sudden jumps in tax liability as income increases.

Income Tax Slabs Under the Old Tax Regime

The old regime continues to exist for taxpayers who prefer claiming deductions and exemptions.

Income Tax Slab Rates Under the Old Tax Regime

Annual Taxable Income	Tax Rate
Up to ₹2,50,000	Nil
₹2,50,001 to ₹5,00,000	5%
₹5,00,001 to ₹10,00,000	20%
Above ₹10,00,000	30%

This regime benefits those who actively invest in tax-saving schemes and claim deductions.

Income Tax Rebate and Tax-Free Income

Under the new structure, income tax rebate provisions ensure that taxpayers earning within a specified threshold effectively pay zero tax. This helps increase tax free income for lower and middle income groups.

But  a surcharge on income tax continues to apply for high-income earners, based on prescribed limits.

Tax Slabs for Business Individuals

For self-employed professionals and business individuals, income tax slabs apply in the same manner as individuals, but deductions and compliance requirements may vary depending on the nature of income and the accounting method used.

Understanding the income tax slab for a business individual is especially important for cash flow planning and advance tax payments.

Tax Saving Options Under the Old Regime

Taxpayers opting for the old regime can reduce taxable income using various tax-saving schemes, such as:

• Investments under the eligible sections

• Insurance premiums

• Retirement contributions

• Education and housing-related deductions

These tax-saving options can significantly lower final tax liability if used correctly.

How Income Tax Planning Affects Personal Finance

Tax planning goes beyond just filing returns. It directly impacts savings, monthly budgets, and borrowing capacity. Many individuals assess their affordability using tools like a personal loan EMI plan or explore short-term solutions through a quick loan app during emergencies.

When applying for credit through platforms such as Kissht, income stability and tax compliance play a key role in eligibility assessment. Choosing the right tax regime can indirectly support better financial management and repayment capacity.

Which Tax Regime Should You Choose?

There is no one-size-fits-all answer.

Choose the new tax regime if:

• You prefer simplicity

• You do not claim many deductions

• You want predictable tax rates

Choose the old tax regime if:

• You actively invest in tax-saving instruments

• You have housing loans or insurance deductions

• You want to reduce taxable income using exemptions

It is advisable to calculate tax liability under both regimes before making a decision.

Final Thoughts

The income tax rates in India for FY 2026–27 offer flexibility by allowing taxpayers to choose between simplicity and deduction-driven savings. Understanding slab rates, surcharge applicability, and rebate benefits helps make informed financial decisions.

Whether planning investments, managing expenses, or preparing for future financial needs, knowing how income tax works is a crucial step toward long-term stability.

FAQs

Q1. What are the income tax rates in India for FY 2026–27?

For FY 2026–27, taxpayers can choose between the new and old tax regimes. The new tax regime offers multiple slabs starting from nil tax up to ₹4,00,000 and going up to 30 percent for income above ₹24,00,000, while the old tax regime follows the traditional slab structure with higher deductions.

Q2. Which is better, the new tax regime or the old tax regime?

The better option depends on your financial profile. The new tax regime suits individuals who do not claim many deductions and prefer simplicity. The old tax regime is beneficial for those who invest in tax-saving options and claim exemptions like insurance or housing-related benefits.

Q3. Is there any income tax rebate available in FY 2026–27?

Yes, eligible taxpayers can claim an income tax rebate under the applicable regime, which can reduce their tax liability to zero if their income falls within the prescribed limit.

Q4. Do income tax slabs apply differently to business individuals?

No, income tax slabs apply in the same way to business individuals and salaried taxpayers. However, deductions, advance tax rules, and compliance requirements may differ based on the nature of income.