What are the income tax slab rates under the new regime for FY 2025-26?

Under the new tax regime for FY 2025-26 (AY 2026-27), the slab rates are: up to Rs 4 lakh — nil; Rs 4-8 lakh — 5%; Rs 8-12 lakh — 10%; Rs 12-16 lakh — 15%; Rs 16-20 lakh — 20%; Rs 20-24 lakh — 25%; and above Rs 24 lakh — 30%. The new regime is the default regime and offers a standard deduction of Rs 75,000 for salaried individuals.

Can I still choose the old tax regime for FY 2025-26?

Yes, individuals and HUFs can still opt for the old tax regime with deductions under Sections 80C, 80D, HRA exemption, and other provisions. Salaried individuals can switch between old and new regime each year. However, individuals with business income who opt out of the new regime can switch back only once in their lifetime. The old regime may be beneficial if your total deductions and exemptions exceed approximately Rs 3.75 lakh.

What is the surcharge rate on income tax for FY 2025-26?

Surcharge rates for FY 2025-26 under the new regime are: 10% on income above Rs 50 lakh, 15% on income above Rs 1 crore, and 25% on income above Rs 2 crore. The maximum surcharge rate under the new regime is capped at 25% (reduced from 37% under the old regime for income above Rs 5 crore). Under the old regime, the 37% surcharge still applies for income above Rs 5 crore.

Is income up to Rs 12 lakh tax-free under the new regime for FY 2025-26?

Effectively yes, for salaried individuals. With the Rs 75,000 standard deduction, the taxable income threshold becomes Rs 12.75 lakh. For individuals with taxable income up to Rs 12 lakh (before standard deduction), a rebate under Section 87A ensures no tax is payable. However, once income crosses this threshold, tax is calculated on the entire income as per the slab rates, not just the amount above Rs 12 lakh.

How is income tax calculated for senior citizens under the new regime?

Under the new tax regime, there is no separate slab benefit for senior citizens (age 60+) or super senior citizens (age 80+) — the same slab rates apply to all individuals regardless of age. However, under the old regime, senior citizens get a higher basic exemption of Rs 3 lakh and super senior citizens get Rs 5 lakh. Senior citizens should compare both regimes based on their deduction profile before choosing.

Income Tax Slab Rate & Surcharge For Ay 2023-24

TL;DR Summary

Income tax slab rates in India for FY 2025-26 vary by taxpayer category — individuals pay 5%–30% based on income brackets (with higher exemption limits for senior and super senior citizens), while partnership firms and local authorities are taxed at a flat 30%, domestic companies at 15%–30% depending on the regime opted, and foreign companies at 40%–50%. Surcharge rates range from 10%–37% for individuals based on income level, and 7%–12% for domestic companies — with a 4% health and education cess applied on top of tax plus surcharge across all categories. Key reliefs include an 87A rebate of up to ₹12,500 for resident individuals with net income up to ₹5 lakh, and special rates of 10%–15% for long-term and short-term capital gains under Sections 112A and 111A respectively.

Individuals, HUF, AOP/BOI & AJP and Non-Resident Individuals

Net Income Range	Rates
Up to 2,50,0002,50,001 – 5,00,0005,00,001 – 10,00,000Above 10,00,001	Nil5%20%30%

SENIOR CITIZEN (60Yrs <= Age < 80Yrs) Resident

Net Income Range	Rates
Up to 3,00,0003,00,001 – 5,00,0005,00,001 – 10,00,000Above 10,00,001	Nil5%20%30%

SUPER SENIOR CITIZEN (80 Yrs or more) – Resident

Net Income Range	Rates
Up to 5,00,0005,00,001 – 10,00,000Above 10,00,001	Nil20%30%

Total Income of Individuals/HUF/AOP/BOI/AJP	Surcharge Rates
Rs. 50 Lakhs – Rs. 1 Crore	10% of Income Tax
Rs. 1 Crore – Rs. 2 Crores	15% of Income Tax
Rs. 2 Crores – Rs. 5 Crores	25% of Income Tax
Rs. 5 crores or more	37% of Income Tax

Other points:

25%, 37% Surcharge rates are not applicable to Capital gain U/S 111A & 112A, Dividend Income.
The above Surcharge rates are also applicable to Assessee’s who opt for concessional rates U/S 115BAC (new tax regime)
Compare with income tax slab rates for AY 2020-21 to see how rates have changed.

PARTNERSHIP FIRMS/LLP :Tax rate of 30%

SURCHARGE: The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief.

CO – OPERATIVE SOCIETIES

Net Income Range	Rates
Up to 10,00010,001 – 20,000Above 20,000	10%20%30%

SURCHARGE:

The amount of income-tax shall be increased by a surcharge at the rate of 12% of such tax, where total income exceeds one crore rupees. However, the surcharge shall be subject to marginal relief.
In case Co – Operative Societies opts concessional rates u/s 115BAD– Applicable surcharge rate is 10%.

DOMESTIC COMPANY

Particulars	Rates
Total turnover or gross receipts during the previous year 2017-18 does not exceed Rs. 400 crores	25%
Opted for Section 115BA	25%
Opted for Section 115BAA	22%
Opted for Section 115BAB	15%
Any other domestic company	30%

SURCHARGE:

1 Crore – 10 Crore	More than 10 Crore
7%	12%

In case Domestic Companies opts concessional rates u/s 115BAB/ 115BAA – Applicable surcharge rate is 10%.

FOREIGN COMPANY

Nature of Income	Tax Rate
Royalty received from Government or an Indian concern or fees for rendering technical services where such agreement has been approved by the Central Government	50%
Any other income	40%

SURCHARGE:

1 Crore – 10 Crore	More than 10 Crore
2%	5%

LOCAL AUTHORITY: A local authority is taxable at 30%

Special Tax Rates

	Particulars	Rates
a).	Sec. 112 A (LTCG – In excess of 1,00,000)	10%
b).	Sec. 112 (LTCG)	20%
c).	Sec. 111A (STCG)	15%
d).	Sec. 115BB (Lottery)	30%
e).	Sec. 115BBE (Deemed Income)	78% (Flat Rate 60% + Surcharge @ 25% + Education Cess @ 4%)

CESS & REBATE:

Health and Education Cess: The amount of income-tax and the applicable surcharge, shall be further increased by health and education cess calculated at the rate of four percent of such income-tax and surcharge.

Rebate u/s 87a: A resident individual (whose net income does not exceed Rs. 5,00,000) can avail rebate under section 87A. It is deductible from income-tax before calculating education cess. The amount of rebate is 100 per cent of income-tax or Rs. 12,500, whichever is less.

Beyond slabs, companies can legally reduce their tax liability through structured planning.

Frequently Asked Questions

Q1. What are the income tax slab rates for individuals for FY 2025-26 (AY 2026-27)?

For individuals, HUFs, AOPs, BOIs, and non-resident individuals, the tax slab rates for FY 2025-26 are — income up to ₹2,50,000 is exempt; ₹2,50,001 to ₹5,00,000 is taxed at 5%; ₹5,00,001 to ₹10,00,000 at 20%; and income above ₹10,00,000 at 30%.

Senior citizens (60 to 80 years) get a higher basic exemption of ₹3,00,000. Super senior citizens (80 years and above) are fully exempt up to ₹5,00,000, with no 5% slab applicable — income above ₹5,00,000 moves directly to the 20% rate.

Q2. What are the surcharge rates on income tax for individuals for AY 2026-27?

Surcharge is levied on the income tax payable when total income crosses ₹50 lakh. The applicable rates for individuals for AY 2026-27 are — 10% for income between ₹50 lakh and ₹1 crore; 15% for income between ₹1 crore and ₹2 crores; 25% for income between ₹2 crores and ₹5 crores; and 37% for income of ₹5 crores and above.

Two important points: the higher surcharge rates of 25% and 37% do not apply to long-term capital gains under Section 112A, short-term capital gains under Section 111A, or dividend income — the maximum surcharge on these incomes is capped at 15%. These surcharge rates also apply to taxpayers who have opted for the new tax regime under Section 115BAC.

Q3. What are the special income tax rates for capital gains and lottery income in India?

Certain types of income are taxed at flat rates regardless of the income slab. Long-term capital gains on listed equity shares and equity mutual funds exceeding ₹1,00,000 (Section 112A) are taxed at 10%. Other long-term capital gains (Section 112) are taxed at 20%. Short-term capital gains on equity (Section 111A) are taxed at 15%. Lottery winnings and game show prizes (Section 115BB) are taxed at a flat 30%.

Deemed income detected during search or survey operations (Section 115BBE) attracts the highest effective rate — 78%, comprising a flat tax of 60%, surcharge of 25% on that tax, and 4% education cess on the total.

Q4. What are the income tax rates for domestic and foreign companies for FY 2025-26?

For domestic companies, the applicable tax rate depends on turnover and the regime opted for. Companies with turnover not exceeding ₹400 crores in FY 2017-18 pay 25%. Companies opting for Section 115BAA pay 22%, while new manufacturing companies under Section 115BAB pay 15%. All other domestic companies are taxed at 30%. Surcharge for domestic companies is 7% where income is between ₹1 crore and ₹10 crores, and 12% above ₹10 crores. Companies under Sections 115BAA and 115BAB pay a flat surcharge of 10%.

For foreign companies, the tax rate is 40% on general income and 50% on royalties or approved technical service fees. Surcharge is 2% for income between ₹1 crore and ₹10 crores, and 5% above ₹10 crores.

Q5. Who can claim the Section 87A rebate, and what is the Health and Education Cess?

The Section 87A rebate is available to resident individuals with net taxable income up to ₹5,00,000. The rebate equals 100% of the income tax payable or ₹12,500, whichever is lower, effectively reducing the tax liability to nil for eligible taxpayers. It is applied before calculating cess and is not available to HUFs, firms, or companies.

Health and Education Cess at 4% is levied on the combined amount of income tax and surcharge and applies to all categories of taxpayers without exception. It is calculated after surcharge is added but before the Section 87A rebate is applied — so the rebate reduces the base tax, and cess is then calculated on the reduced figure.

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