Income Tax Slabs FY 2025-26: Zero Tax Up to Rs 12.75 Lakh
New Regime Slabs (Default)
| Income Range | Tax Rate |
|---|---|
| Up to Rs 4,00,000 | Nil |
| Rs 4,00,001 – Rs 8,00,000 | 5% |
| Rs 8,00,001 – Rs 12,00,000 | 10% |
| Rs 12,00,001 – Rs 16,00,000 | 15% |
| Rs 16,00,001 – Rs 20,00,000 | 20% |
| Rs 20,00,001 – Rs 24,00,000 | 25% |
| Above Rs 24,00,000 | 30% |
Standard deduction: Rs 75,000. Section 87A rebate: Up to Rs 60,000 (taxable income up to Rs 12 lakh). Salaried employees earning up to Rs 12,75,000 pay zero tax.
Old Regime Slabs (Opt-in Only)
| Income Range | Below 60 | 60-80 (Senior) | Above 80 (Super Senior) |
|---|---|---|---|
| Up to Rs 2,50,000 | Nil | Nil | Nil |
| Rs 2,50,001 – Rs 3,00,000 | 5% | Nil | Nil |
| Rs 3,00,001 – Rs 5,00,000 | 5% | 5% | Nil |
| Rs 5,00,001 – Rs 10,00,000 | 20% | 20% | 20% |
| Above Rs 10,00,000 | 30% | 30% | 30% |
Standard deduction under old regime: Rs 50,000. Section 87A rebate: Up to Rs 12,500 (taxable income up to Rs 5 lakh). Old regime allows deductions under 80C, 80D, 80G, HRA, LTA, and others.
Worked Example: Rs 15 Lakh Salary
| Step | New Regime | Old Regime |
|---|---|---|
| Gross Salary | Rs 15,00,000 | Rs 15,00,000 |
| Standard Deduction | Rs 75,000 | Rs 50,000 |
| Other Deductions (80C, 80D, NPS) | — | Rs 2,50,000 |
| Taxable Income | Rs 14,25,000 | Rs 12,22,500 (approx) |
| Tax Before Cess | Rs 93,750 | Rs 1,79,250 |
| 4% Cess | Rs 3,750 | Rs 7,170 |
| Total Tax | Rs 97,500 | Rs 1,86,420 |
At Rs 15 lakh with Rs 2.5 lakh in deductions, new regime saves about Rs 89,000. You'd need over Rs 4.25 lakh in deductions to break even under the old regime.
The 87A Catch: Capital Gains
From FY 2025-26, the Section 87A rebate under the new regime does not apply to income taxed at special rates — specifically STCG under Section 111A (15%) and LTCG under Section 112A (12.5%). If you have capital gains that push your taxable income above Rs 12 lakh, you might owe tax even if your regular income qualifies for the rebate.
Surcharge Rates
| Income | New Regime | Old Regime |
|---|---|---|
| Up to Rs 50 Lakh | Nil | Nil |
| Rs 50L – Rs 1 Cr | 10% | 10% |
| Rs 1 Cr – Rs 2 Cr | 15% | 15% |
| Above Rs 2 Cr | 25% (capped) | 37% |
Quick Decision Guide
- Up to Rs 12.75 lakh (salaried): New regime wins — zero tax
- Rs 15-20 lakh with < Rs 3 lakh deductions: New regime likely better
- Rs 15-20 lakh with > Rs 4 lakh deductions: Run the calculator
- Above Rs 50 lakh: Factor in the 25% surcharge cap advantage of the new regime