For Assessment Year (AY) 2026-27 (Financial Year 2025-26), the new tax regime is the default option,
New Tax Regime Slab Rates for Individuals & HUF for AY 2026-27 (FY 2025-26)
- ₹0 – ₹4,00,000: Nil
- ₹4,00,001 – ₹8,00,000: 5%
- ₹8,00,001 – ₹12,00,000: 10%
- ₹12,00,001 – ₹16,00,000: 15%
- ₹16,00,001 – ₹20,00,000: 20%
- ₹20,00,001 – ₹24,00,000: 25%
- Above ₹24,00,000: 30%
So if Your Total Income is below Rs.12 Lakhs, then you don’t need to pay any tax due to Tax Rebate u/s 87A is available up-to Rs 60,000 tax liability so whatever tax liability would be calculated with above tax slab will become zero after claiming Rebate, so ultimately your total Tax Liability would be zero. so understand this from below case scenario:-
Case-1: when your Total Income is up-to 12 Lakhs:-
So if your Total Gross Salary is 12.75 Lakhs, then after reducing standard deduction of Rs.75,000/-, your Total income would be Rs.12 Lakhs and in that case your tax would be calculated as below;
First 0 to 4 Lakh Income- Tax zero, from next 4 Lakh Income from Rs 4 to 8 lakh- tax Rate is 5%, so on next Rs 4 lakhs your tax would be 4 Lakhs x 5%= 20,000 and on next 4 lakh from Rs 8 Lakh to Rs.12 Lakh, Tax Rate is 10%, so here on next Rs 4 lakhs tax would be Rs 4 Lakhs x 10%= 40,000. So total Tax liability as per above slab for 12 lakh Income would be Rs.20,000 + 40,000= Rs.60,000 so here total tax liability before cess is Rs 60,000 but here is some twist in taxation, you don’t need to pay any taxes since as per Section 87A Rebate if your income is upto 12 lakhs, then you will get rebate of 60,000, so ultimately here your tax would be Zero ( 60,000-60,000.
Case-2: when your Total Income is above 12 Lakhs:-
So if your Gross Salary is Rs.14 Lakhs and after reducing standard deduction of Rs.75000/-, your Total Income would be Rs.13.25 lakhs. that case your tax would be calculated as below;
Upto 12 Lakhs income we seen in case-1 that Tax before Rebate is Rs.60,000 so from next 12 to 13.25 lakhs, Tax Rate is 15% so on next Rs.1.25 lakh Income, Tax liability would be 1.25 lakhs x 15%= Rs.18,750/-. So here total Tax would be Rs 60,000+18750 = 78,750 and now you will not get any Rebate u/s 87A because you will get Rebate only when your income is Up-to Rs.12 lakhs so now you have to pay Tax of Rs.78,750 and 4% Cess would also be paid, so Total Tax you have to pay tax Rs.81,900/-
I hope i would able to explain about this Tax Rebate.
Note: Total Income is calculated after adding all 5 groups of income and then reducing any deduction if any available, so in New Income Tax Regime Standard Deduction up-to Rs.75000 is available for all Salaried class employees.