Income Tax Slabs India 2026-27 — New Regime vs Old Regime Complete Comparison
India’s dual income tax regime system gives taxpayers the choice between the new tax regime (with lower rates but fewer deductions) and the old regime (with higher rates but more deductions and exemptions). Choosing the right regime can save you significant tax. This guide compares both regimes with the latest 2026-27 slab rates.
New Tax Regime Slabs (Default Regime)
The new tax regime is the default option for FY 2026-27. Slab rates:
Up to ₹3,00,000: Nil | ₹3,00,001–₹7,00,000: 5% | ₹7,00,001–₹10,00,000: 10% | ₹10,00,001–₹12,00,000: 15% | ₹12,00,001–₹15,00,000: 20% | Above ₹15,00,000: 30%
Standard deduction of ₹75,000 is available. Rebate under Section 87A makes income up to ₹7,00,000 effectively tax-free.
Old Tax Regime Slabs
Slab rates: Up to ₹2,50,000: Nil | ₹2,50,001–₹5,00,000: 5% | ₹5,00,001–₹10,00,000: 20% | Above ₹10,00,000: 30%
Standard deduction of ₹50,000 plus all deductions under Section 80C (₹1,50,000), 80D (health insurance), 80E (education loan), HRA exemption, LTA, and other exemptions are available.
When to Choose Old Regime
The old regime is beneficial if your total deductions and exemptions exceed approximately ₹3,75,000–₹4,00,000 per year. Common scenarios: high HRA claims in metro cities, significant Section 80C investments, home loan interest deduction under Section 24, health insurance premiums for family, and NPS contributions under Section 80CCD(1B).
When to Choose New Regime
The new regime works better if you have few investments/deductions, live in company-provided accommodation (no HRA claim), have no home loan, or simply prefer the simplicity of lower rates without tax planning.
How INDPayroll Helps
INDPayroll’s regime comparison tool lets employees see their exact tax liability under both regimes side by side, factoring in their actual salary structure, deductions, and exemptions. HR teams can run a company-wide analysis to advise employees. TDS is automatically calculated based on each employee’s chosen regime. Start your free trial to optimize tax calculations for your workforce.
