Koshur Samachar

The latest income tax slabs specify the tax rates applicable to different income levels for individuals in India. They also determine the income threshold up to which no tax is payable, the rates applied beyond that and how tax liability is calculated under the old and new tax regimes.

Knowing the current slabs helps you understand how your income is taxed, whether you are eligible for rebates or deductions and which tax regime results in a lower final tax outgo.

The latest income tax slabs

Each income tax slab specifies the rate at which a particular portion of total income is taxed.

New tax regime slab rates (FY 2025-26, AY 2026-27)

Rebate and standard deduction

• Resident individuals are eligible for a rebate that can reduce tax liability to zero when taxable income does not exceed ₹12,00,000 under the new regime.
• Salaried taxpayers can additionally claim a standard deduction of ₹75,000, effectively pushing the no-tax threshold to ₹12,75,000.

This combination significantly lowers tax liability for a large segment of middle-income taxpayers.

Income Tax Slabs Under the Old Tax Regime

FY 2025–26 | AY 2026–27

Taxpayers may opt for the old regime if they wish to claim deductions and exemptions.

Under this regime, taxpayers can reduce taxable income through deductions such as:

• Section 80C investments
• Health insurance premiums under Section 80D
• House Rent Allowance
• Home loan interest
• Other specified allowances and exemptions

The effectiveness of the old regime depends entirely on the level and consistency of these deductions.

How the latest slabs change tax outcomes

The key difference between the two regimes lies in how relief is provided.

• The new regime offers relief through wider slabs, lower incremental rates and a large rebate.
• The old regime offers relief through deductions that reduce taxable income.

As a result, two individuals with the same gross income can end up with different tax liabilities depending on:

• Residency status
• Salary structure
• Deduction usage
• Chosen tax regime

Impact on salaried individuals

Salaried taxpayers with limited deductions often benefit from the new regime. The higher standard deduction and rebate remove the need for extensive tax-saving investments purely for compliance purposes.

For those who actively claim HRA, home loan interest and Section 80C deductions, the old regime may still produce a lower tax outgo. The advantage narrows as income rises and deductions taper off.

The decision is no longer automatic and requires a side-by-side comparison.

Senior citizens and super senior citizens

Under the new regime, there are no separate slab rates based on age. Senior citizens are taxed using the same slab structure as other individuals.

However, other measures ease compliance and cash flow:

• The threshold for TDS on interest income for senior citizens has been increased to ₹1,00,000 per year.
• The TDS threshold on rental income has been raised to ₹6,00,000 per year.
• Certain withdrawals from National Savings Scheme (NSS) accounts are exempt from tax, subject to prescribed conditions.

Senior citizens with limited deductions often prefer the simplicity of the new regime, while those with structured exemptions may continue with the old regime.

As per Old Regime

Income Tax Slabs for Senior Citizens (60 to 80 Years)

Income Tax Slabs for Super Senior Citizens (Above 80 Years)

Business owners and professionals

For individuals earning income from business or profession, slab rates apply to net taxable income. The new regime simplifies compliance for those using presumptive taxation or claiming minimal deductions.

However, taxpayers who rely on depreciation, capital expenditure benefits or investment-linked deductions may find the old regime more efficient. Once a choice is made, it can have implications for future years, especially for business income.

How NRIs are taxed under the slabs

Non-resident Indians are taxed on income earned in India using the same slab rates. However, the rebate available to resident individuals does not apply to NRIs.

This means tax liability can arise at lower income levels compared to residents. Since TDS is often deducted on NRI income, understanding slab applicability helps in estimating refunds or additional tax payable at the time of filing.

Choosing the right regime

The new regime suits taxpayers who:

• Prefer simplicity
• Have limited deductions
• Want predictable tax outcomes

The old regime may be more suitable for those who:

• Claim multiple exemptions
• Have significant housing or loan-related deductions
• Maintain detailed tax documentation

Running a comparison once during the year using an income tax calculator helps avoid surprises at filing time.

Endnote

The current tax slabs decide how much tax applies to each part of your income. Depending on how your income is structured, the same earnings can lead to different tax outcomes under the two regimes. Checking the slabs against your income once during the year helps you choose the regime that results in lower tax and fewer adjustments later.

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