Income Tax Slabs FY 2026-27 (Tax Year 2026-27): New vs Old Regime, ₹12 Lakh Rebate & Worked Example

A software engineer in Gachibowli with a ₹14 lakh package opens payroll in April and asks one question: how much will actually be cut this year? The answer depends on the regime chosen, and since 1 April 2026 it also depends on a new statute. The Income-tax Act, 2025 now governs, and the old “financial year” and “assessment year” pair is replaced by a single “tax year”. The slab rates, however, have not been rewritten.

New regime slabs for FY 2026-27

The new regime is the default. You must actively opt out to be assessed under the old regime, and a person with business income can switch only in limited ways verify.

The same slabs apply to individuals of every age, to HUFs, and to AOPs and BOIs (other than co-operative societies) that stay in the new regime. There is no separate slab for senior citizens under it.

Old regime slabs

The old regime keeps deductions such as Chapter VI-A (the 80C family), HRA, home-loan interest on a self-occupied house and LTA. Its rebate is only ₹12,500, for total income up to ₹5 lakh. Because the section numbers were rearranged by the 2025 Act, check the new numbering before quoting a deduction in a return verify. Our old vs new regime comparison for Hyderabad taxpayers runs the break-even maths, and our note on the tax year under the Income-tax Act, 2025 explains the terminology.

Rebate, standard deduction and cess

The rebate is not available against income taxed at special rates, such as short-term capital gains on listed equity or lottery winnings. The rebate provision is numbered differently in the 2025 Act (reported as section 156) verify.

Worked example: ₹15 lakh salary, new regime

Assumptions: salaried, no other income, no old-regime deductions. Illustration only.

Surcharge

Surcharge applies on tax, not income, and only on total income above ₹50 lakh: 10% above ₹50 lakh, 15% above ₹1 crore, 25% above ₹2 crore. Under the new regime it stops at 25%, whereas the old regime goes to 37% above ₹5 crore verify. Surcharge on dividend income and on capital gains taxed at special rates is capped at 15%.

What salaried Hyderabad taxpayers should check

Employees in Kondapur, Hitech City, Gachibowli and Nanakramguda should check three things. First, the regime declared to the employer, since TDS is deducted on that basis and can be corrected only in the return. Second, HRA: reports on Budget 2026 say Hyderabad has been added to the cities with a 50% HRA limit, together with a requirement to disclose the landlord’s relationship verify. Third, the due date: reports indicate ITR-3 and ITR-4 filers now have until 31 August, while ITR-1 and ITR-2 remain 31 July verify. For return filing support see our ITR filing in Hyderabad page.

Why work with ComplianceKart

Tax planning is rarely only about slabs. It touches payroll, investments, a side business, perhaps a company or a foreign remittance. ComplianceKart is a boutique practice bringing CAs, CSs and advocates under one roof, like a multi-speciality hospital where the specialist you need is already in the building. We compare regimes on your numbers, file the return, and handle notices if they follow. We make no promise of tax savings.

Related reading

Disclaimer. This article is general information on Indian law as at 20 October 2026 and is not advice on any specific case. Items marked verify should be checked against the current official text before reliance. Contact: team@compliancekart.com · 9959536391 · compliancekart.com.