Income Tax Slabs in India — Quick Reference Guide
Current income tax slabs under the new regime in India with worked calculation examples. Educational reference for students and professionals.
Introduction
India’s income tax system uses a slab-based structure where different portions of your income are taxed at different rates. The more you earn, the higher the rate on the additional income — this is called progressive taxation. Understanding these slabs helps you estimate your tax liability, plan investments, and verify payslip deductions.
⚠️ Important Disclaimer: Tax slabs change annually with the Union Budget. The rates below are for educational reference. Always verify current rates on the Income Tax Department website or consult a qualified CA/tax professional before filing.
How Slab-Based Taxation Works
Your total taxable income is divided into portions (slabs). Each slab is taxed at its own rate. You do NOT pay the highest rate on your entire income — only on the portion that falls in that slab.
Example concept: If slab rates are 0% up to ₹3L and 5% from ₹3L to ₹7L, then someone earning ₹5L pays:
- ₹0 on the first ₹3,00,000 (0% slab)
- ₹10,000 on the next ₹2,00,000 (5% slab)
- Total tax: ₹10,000 (not 5% of entire ₹5L)
New Tax Regime Slabs (Reference)
The following slabs are provided as an educational reference based on recent budgets. Verify with official sources for the current assessment year.
| Income Slab | Tax Rate |
|---|---|
| Up to ₹3,00,000 | Nil (0%) |
| ₹3,00,001 to ₹7,00,000 | 5% |
| ₹7,00,001 to ₹10,00,000 | 10% |
| ₹10,00,001 to ₹12,00,000 | 15% |
| ₹12,00,001 to ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
Standard deduction: ₹75,000 (salaried individuals under new regime) Rebate under Section 87A: No tax payable if taxable income ≤ ₹7,00,000
Note: These rates are indicative. The actual slabs, surcharges, cess, and rebate thresholds are confirmed each year in the Finance Act.
Worked Example 1: Income of ₹9,00,000
Gross Income: ₹9,00,000 Standard Deduction: ₹75,000 Taxable Income: ₹9,00,000 − ₹75,000 = ₹8,25,000
| Slab | Taxable Amount | Rate | Tax |
|---|---|---|---|
| ₹0 – ₹3,00,000 | ₹3,00,000 | 0% | ₹0 |
| ₹3,00,001 – ₹7,00,000 | ₹4,00,000 | 5% | ₹20,000 |
| ₹7,00,001 – ₹8,25,000 | ₹1,25,000 | 10% | ₹12,500 |
Total Tax: ₹0 + ₹20,000 + ₹12,500 = ₹32,500 Add 4% Cess: ₹32,500 × 1.04 = ₹33,800
Worked Example 2: Income of ₹16,00,000
Gross Income: ₹16,00,000 Standard Deduction: ₹75,000 Taxable Income: ₹15,25,000
| Slab | Taxable Amount | Rate | Tax |
|---|---|---|---|
| ₹0 – ₹3,00,000 | ₹3,00,000 | 0% | ₹0 |
| ₹3,00,001 – ₹7,00,000 | ₹4,00,000 | 5% | ₹20,000 |
| ₹7,00,001 – ₹10,00,000 | ₹3,00,000 | 10% | ₹30,000 |
| ₹10,00,001 – ₹12,00,000 | ₹2,00,000 | 15% | ₹30,000 |
| ₹12,00,001 – ₹15,00,000 | ₹3,00,000 | 20% | ₹60,000 |
| ₹15,00,001 – ₹15,25,000 | ₹25,000 | 30% | ₹7,500 |
Total Tax: ₹1,47,500 Add 4% Cess: ₹1,47,500 × 1.04 = ₹1,53,400
Key Points to Remember
- Health & Education Cess of 4% is added on top of calculated tax
- Surcharge applies if income exceeds ₹50 lakh (10%) or ₹1 crore (15%) — additional layer above base tax
- Section 87A rebate — if taxable income is within the threshold, full tax is rebated (effectively zero tax)
- New vs Old regime — taxpayers can choose. New regime has lower rates but fewer deductions. Old regime allows HRA, 80C, 80D claims.
New Regime vs Old Regime (Key Difference)
| Feature | New Regime | Old Regime |
|---|---|---|
| Tax rates | Lower slab rates | Higher slab rates |
| Deductions (80C, HRA, etc.) | Not available (mostly) | Available |
| Standard deduction | ₹75,000 | ₹50,000 |
| Best for | Low investment individuals | Heavy investment in PPF, ELSS, insurance |
Frequently Asked Questions
What is the rebate under Section 87A?
If your total taxable income (after deductions) is within the rebate threshold (currently ₹7,00,000 under new regime), the entire tax calculated is rebated — you pay zero tax.
Do I have to choose between new and old regime every year?
Salaried individuals can switch between regimes each year. Business/profession income holders must make a one-time choice (can switch once).
Is income tax calculated on gross salary or take-home?
It is calculated on “taxable income” — gross salary minus exemptions (HRA, LTA) and deductions (80C, 80D, standard deduction) that apply under your chosen regime.
What is cess and why is it added?
The 4% Health & Education Cess funds healthcare and education initiatives. It is calculated on the total tax amount (including surcharge if applicable) and cannot be avoided.
How do I know which regime is better for me?
Compare your tax under both regimes. If your total deductions (80C + HRA + 80D + others) exceed approximately ₹2.5–3.5 lakh, the old regime may save more. Otherwise, the new regime’s lower rates are usually better.
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Tags: tax, india, finance, income tax
Last Updated: June 2026
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