Money basics3 min read · Updated 21 October 2026
New tax regime slabs for FY 2026-27, with the ₹12 lakh rebate
The new regime slabs, the ₹75,000 standard deduction, the section 87A rebate and marginal relief explained with salary examples.
The slabs
| Taxable income | 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% |
Add 4% cess on the tax.
The rebate and marginal relief
If taxable income is ₹12 lakh or less, the section 87A rebate (up to ₹60,000) cancels the tax. Just above ₹12 lakh, marginal relief caps your tax at the amount by which you cross ₹12 lakh. At ₹12.5 lakh taxable, tax is ₹50,000 before cess (₹52,000 with cess), not ₹67,500.
Standard deduction
Salaried employees deduct ₹75,000 before applying the slabs. So ₹12.75 lakh of salary is ₹12 lakh taxable, which is tax-free.
What this leaves out
Surcharge above ₹50 lakh, capital gains, and the old regime are not covered. If you have large deductions such as home loan interest, compare both regimes before you file.
Common questions
Is income up to ₹12 lakh tax-free?
Taxable income up to ₹12 lakh pays no tax in the new regime because of the section 87A rebate.
What is the standard deduction?
₹75,000 for salaried employees and pensioners in the new regime.
Which regime should I pick?
If your deductions are large, such as home loan interest and 80C, run both. Otherwise the new regime is usually simpler.