This page covers Tax Year 2026-27 (1 April 2026 to 31 March 2027) under the Income Tax Act, 2025. The new framework uses the income period's tax year, rather than an assessment-year label for the following year. Department transition FAQs, question 9.
Income earned in FY 2025-26 is filed for AY 2026-27 under the Income Tax Act, 1961, including returns filed after 1 April 2026. The current NiyamFin tax calculators model that earlier period. The Act's commencement date does not move those returns into Tax Year 2026-27. Department transition FAQs, question 21.
The 2025 Act commenced on 1 April 2026; Section 3 defines the tax year and Section 536 provides the transition to the new Act. Use the section references applicable to each period. Income Tax Act, 2025, as amended by Finance Act, 2026.
New-regime slabs for Tax Year 2026-27
The table follows Section 202(1) of the 2025 Act. Official enacted text.
| Total income band | Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 to ₹8,00,000 | 5% |
| ₹8,00,001 to ₹12,00,000 | 10% |
| ₹12,00,001 to ₹16,00,000 | 15% |
| ₹16,00,001 to ₹20,00,000 | 20% |
| ₹20,00,001 to ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
For eligible salaried taxpayers in the new regime, the ₹75,000 standard deduction is capped at salary under Section 19(1), Table item 2. The Section 156(2) rebate applies to qualifying resident individuals, subject to its limits; Section 156(3) restricts it to tax payable at Section 202(1) rates. Special-rate income and marginal relief mean “income up to ₹12 lakh is tax-free” is not a universal statement. Official provisions: Sections 19, 156 and 202.
Old-regime comparison
The old regime retains its separate slab structure and conditional deductions and exemptions. A deduction ceiling is not an automatic entitlement, and its tax effect depends on eligibility, unused headroom and the complete computation.
The lower-tax regime depends on income composition and deductions or exemptions that are actually available. Salary alone, rent alone or a home loan alone does not establish a universal winner.
Arithmetic is not a recommendation
For a resident individual in the new regime with only normal-rate salary income, a ₹12,75,000 gross salary less a ₹75,000 standard deduction gives ₹12,00,000 before any other applicable adjustment. Under the stated new-regime slabs, the pre-cess tax is ₹60,000; if all Section 156 conditions are met, the rebate can reduce that amount to nil.
This is a statutory-mechanics example for Tax Year 2026-27 under Sections 19, 156 and 202 of the 2025 Act. It excludes special-rate income, surcharge and taxpayer-specific complications. Official enacted text.
Using NiyamFin's calculators
The current Income Tax and New vs Old Tax calculators model FY 2025-26 / AY 2026-27. Their labels and assumptions are the source of truth for those tools. Use them only for that period and verify current filing rules separately.
Official sources
- Income Tax Department: Income Tax Act, 2025 transition FAQs
- Income Tax Department: AY 2026-27 individual return guidance
- Income Tax Act, 2025, as amended by Finance Act, 2026: Sections 1, 3, 19, 156, 202 and 536
- Income Tax Department: Interplay and transition FAQs, questions 1.9-1.12
Sources for these period labels and the stated example were checked on 14 October 2026. This page does not state a return-filing deadline; check the Department's current instructions and applicable notifications for the relevant period before filing.