New Tax Regime Slabs (Default, Tax Year 2026-27)
Section 202 makes the following rates the default for Tax Year 2026-27: • ₹0 – ₹4,00,000: Nil • ₹4,00,001 – ₹8,00,000: 5% • ₹8,00,001 – ₹12,00,000: 10% • ₹12,00,001 – ₹16,00,000: 15% • ₹16,00,001 – ₹20,00,000: 20% • ₹20,00,001 – ₹24,00,000: 25% • Above ₹24,00,000: 30% The salary standard deduction is ₹75,000 under Section 19(1), Table serial 2. Section 156 can reduce slab tax by up to ₹60,000 only for a resident individual whose total income meets the ₹12 lakh test; special-rate and other income can prevent nil tax.
Old Tax Regime Slabs (Tax Year 2026-27)
The optional old-regime rates for an individual below age 60 are: • ₹0 – ₹2,50,000: Nil • ₹2,50,001 – ₹5,00,000: 5% • ₹5,00,001 – ₹10,00,000: 20% • Above ₹10,00,000: 30% Resident senior individuals can have different basic-exemption bands. The salary standard deduction is ₹50,000. Section 156(1) provides a resident-individual rebate up to ₹12,500 when total income does not exceed ₹5 lakh. Use the form and option process shown in the current Tax Year 2026-27 e-filing utility rather than relying on a legacy form number.
Deductions Available: Old vs New Regime
Common optional-old-regime items include the Section 123/Schedule XV investment deduction (legacy 80C), Section 126 medical-insurance deduction (legacy 80D), eligible house-property interest under Section 22, and the HRA exemption in Schedule III. Each has its own conditions and caps; a ₹2 lakh house-property figure is not a universal deduction for every property. The salary standard deduction applies in both regimes at different amounts. Eligible employer NPS contribution under Section 124 can also apply in both: for a private-sector employee the represented ceiling is 10% of salary in the optional old regime and 14% in the default regime, subject to the statutory definition and overall employer-contribution cap.
The Breakeven Principle: When Old Regime Wins
There is no reliable salary-only breakeven table. The result depends on residential status, age under the optional regime, salary composition, actual HRA facts, house-property computation, eligible medical premiums, NPS contributions, special-rate income, losses and surcharge. Compare both regimes using the same complete income facts. Treat the site result as an estimate when a deduction category or special income is not represented.
Decision Checklist
Check before choosing: • Is the taxpayer resident and eligible for the relevant Section 156 rebate? • Is the input gross salary, not CTC? • Is HRA based on actual qualifying salary, rent, city and period? • Are medical premiums split between self/family and parents with the correct senior-citizen limits? • Has house-property income or loss been computed rather than inserting a blanket interest amount? • Is there capital gain, winnings, VDA, foreign income or another special-rate component? • Does the current e-filing utility permit and record the intended option?
How to Switch Between Regimes
A taxpayer without business or professional income can generally make the regime choice in the return for each tax year; an employer declaration controls salary withholding but does not by itself finalize the return choice. Taxpayers with business or professional income face stricter option and withdrawal rules. Because the 2025 Act and 2026 Rules use new numbering and forms, follow the form name, due date and workflow displayed by the official Tax Year 2026-27 e-filing utility. Do not submit legacy Form 10-IEA merely because an older article names it.
Official References
Source date: 2026-07-28. Confirm later notifications, rules and portal forms before filing or transacting.