Above \u20b924,00,000<\/td> 30%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\nThese slabs are the same for everyone, including senior citizens. The new regime does not give the higher age-based exemption that the old regime does \u2014 the basic exemption is \u20b94 lakh for all individuals. A 4% Health and Education Cess applies on the final tax under this regime, as it does under the old one. The same slabs continue for FY 2026-27, with no change announced in Budget 2026.<\/p>\n\n\n\n
The Section 87A rebate: Income up to \u20b912 lakh is tax-free<\/h2>\n\n\n\n The biggest feature of the new regime is the Section 87A rebate. For FY 2025-26, a resident individual with taxable income up to \u20b912 lakh gets a rebate of up to \u20b960,000, which cancels out the tax entirely. So if your taxable income is \u20b912 lakh or less, your tax is zero.<\/p>\n\n\n\n
Two conditions are worth remembering. The rebate is only for resident individuals, and it applies only to normal income. Special-rate income such as capital gains under Sections 111A and 112A is not covered by the rebate, so you can still owe tax on that part even if your total is around \u20b912 lakh.<\/p>\n\n\n\n
The \u20b975,000 standard deduction: \u20b912.75 lakh tax-free for the salaried<\/h2>\n\n\n\n Salaried individuals and pensioners get a standard deduction of \u20b975,000 under the new regime, raised from \u20b950,000. This is subtracted from your salary before tax is calculated.<\/p>\n\n\n\n
Because of it, a salaried person earning up to \u20b912.75 lakh has taxable income of \u20b912 lakh after the standard deduction, which the rebate then makes tax-free. This is why \u20b912.75 lakh is the tax-free salary figure you often see for the new regime, while \u20b912 lakh is the tax-free figure for taxable income.<\/p>\n\n\n\n
Marginal relief: What happens just above \u20b912 lakh<\/h2>\n\n\n\n Without a cushion, earning slightly more than \u20b912 lakh would create a sharp tax jump, because the rebate stops applying. Marginal relief prevents this.<\/p>\n\n\n\n
If your taxable income crosses \u20b912 lakh by a small amount, your tax is limited to the amount by which your income exceeds \u20b912 lakh. For example, with a taxable income of \u20b912,25,000, the normal slab tax would be \u20b963,750, but marginal relief caps it at \u20b925,000 \u2014 the excess over \u20b912 lakh \u2014 which becomes \u20b926,000 after cess. This relief continues until roughly \u20b912.70 lakh of taxable income, after which the regular slab tax applies in full.<\/p>\n\n\n\n
Worked examples: Tax at different income levels<\/h2>\n\n\n\n These figures are for a salaried person with only the \u20b975,000 standard deduction, and include 4% cess.<\/p>\n\n\n\nGross salary<\/td> Taxable income (after \u20b975,000 deduction)<\/td> Tax payable (incl. cess)<\/td><\/tr> \u20b98,00,000<\/td> \u20b97,25,000<\/td> \u20b90<\/td><\/tr> \u20b912,00,000<\/td> \u20b911,25,000<\/td> \u20b90<\/td><\/tr> \u20b912,75,000<\/td> \u20b912,00,000<\/td> \u20b90<\/td><\/tr> \u20b913,00,000<\/td> \u20b912,25,000<\/td> \u20b926,000<\/td><\/tr> \u20b916,00,000<\/td> \u20b915,25,000<\/td> \u20b91,13,100<\/td><\/tr> \u20b920,00,000<\/td> \u20b919,25,000<\/td> \u20b91,92,400<\/td><\/tr> \u20b924,00,000<\/td> \u20b923,25,000<\/td> \u20b92,92,500<\/td><\/tr> \u20b930,00,000<\/td> \u20b929,25,000<\/td> \u20b94,75,800<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\nTake the \u20b920,00,000 salary. After the \u20b975,000 deduction, taxable income is \u20b919,25,000. The tax is nil on the first \u20b94 lakh, \u20b920,000 on the next \u20b94 lakh (5%), \u20b940,000 on the next \u20b94 lakh (10%), \u20b960,000 on the next \u20b94 lakh (15%), and \u20b965,000 on the remaining \u20b93.25 lakh (20%) \u2014 \u20b91,85,000 in total, or \u20b91,92,400 after 4% cess.<\/p>\n\n\n\n
Deductions you can still claim in the new regime<\/h2>\n\n\n\n The new regime removes most deductions, but a few remain:<\/p>\n\n\n\n