Knowledge Base

Income Tax Slabs (FY 2025-26)

Progressive slab system — higher income taxed at higher rates

New Regime: 0-4L: Nil, 4-8L: 5%, 8-12L: 10%, 12-16L: 15%, 16-20L: 20%, 20-24L: 25%, >24L: 30%.

Old Regime: 0-2.5L: Nil, 2.5-5L: 5%, 5-10L: 20%, >10L: 30%.

Surcharge: 10% (>50L), 15% (>1Cr), 25% (>2Cr). Max surcharge capped at 25% in New Regime.

Health & Education Cess: 4% on total tax + surcharge — applicable to everyone.

Rebate u/s 87A: Full tax rebate if income ≤ ₹12L (New) or ≤ ₹5L (Old).

Pro Tip

The "marginal relief" rule ensures your post-tax income never decreases — check if your income is near a surcharge threshold.

Income Tax Slabs (FY 2025-26) - Complete Guide

Everything you need to know about Income Tax Slabs (FY 2025-26) and how to optimize your financial strategy.

Understanding the Formula

The core calculation is based on:

Progressive slab system — higher income taxed at higher rates

Key Concepts & Rules

New Regime: 0-4L: Nil, 4-8L: 5%, 8-12L: 10%, 12-16L: 15%, 16-20L: 20%, 20-24L: 25%, >24L: 30%.

Old Regime: 0-2.5L: Nil, 2.5-5L: 5%, 5-10L: 20%, >10L: 30%.

Surcharge: 10% (>50L), 15% (>1Cr), 25% (>2Cr). Max surcharge capped at 25% in New Regime.

Health & Education Cess: 4% on total tax + surcharge — applicable to everyone.

Rebate u/s 87A: Full tax rebate if income ≤ ₹12L (New) or ≤ ₹5L (Old).

Expert Strategy

The "marginal relief" rule ensures your post-tax income never decreases — check if your income is near a surcharge threshold.

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