Old vs new tax regime FY 2026-27: which one should you choose?
Budget 2026 kept the slabs unchanged. For most salaried people the new regime now wins, unless your deductions are large.
Budget 2026 did not change the income tax slabs, so FY 2026-27 (AY 2027-28) works the same way as last year.
New regime slabs (FY 2026-27)
| Taxable income | Rate |
|---|---|
| Up to ₹4 lakh | Nil |
| ₹4–8 lakh | 5% |
| ₹8–12 lakh | 10% |
| ₹12–16 lakh | 15% |
| ₹16–20 lakh | 20% |
| ₹20–24 lakh | 25% |
| Above ₹24 lakh | 30% |
Salaried people get a ₹75,000 standard deduction, and a rebate makes the tax zero when taxable income is up to ₹12 lakh. So a salary of up to ₹12.75 lakh pays no tax under the new regime.
Old regime slabs
No tax up to ₹2.5 lakh (₹3 lakh at age 60–79, ₹5 lakh at 80+), then 5% up to ₹5 lakh, 20% up to ₹10 lakh and 30% above. The standard deduction is ₹50,000, and you can claim 80C, 80D, HRA, home loan interest and more.
An example
On a ₹15 lakh salary with ₹1.5 lakh of 80C and ₹25,000 of health insurance, the new regime tax is about ₹97,500 and the old regime about ₹2,02,800 (both including 4% cess). The old regime only catches up when deductions are very large, typically a big HRA plus a home loan.
Check yours
This is an estimate. Capital gains and other special-rate income are taxed separately, so check with a tax professional before filing.
This article is general information, not personal financial advice. Rules and rates change; check the latest before you act.