The new regime is the default for salaried people in India. It has lower rates and a larger tax-free limit than the old regime, but it gives up most deductions such as HRA, 80C and home-loan interest. Here is how the tax is worked out for FY 2026-27 (assessment year 2027-28).
Slab rates
| Taxable income | Tax rate |
|---|---|
| Up to ₹4 lakh | Nil |
| ₹4 lakh to ₹8 lakh | 5% |
| ₹8 lakh to ₹12 lakh | 10% |
| ₹12 lakh to ₹16 lakh | 15% |
| ₹16 lakh to ₹20 lakh | 20% |
| ₹20 lakh to ₹24 lakh | 25% |
| Above ₹24 lakh | 30% |
Tax is charged slab by slab, so only the part of your income inside each band is taxed at that band's rate. Add 4% health and education cess on the tax.
Standard deduction and the ₹12 lakh rebate
- Standard deduction: salaried employees and pensioners subtract ₹75,000 from their salary before the slabs apply.
- Section 87A rebate: if your taxable income is ₹12 lakh or less, the rebate (up to ₹60,000) brings the tax to zero.
- Marginal relief: just above ₹12 lakh, your tax cannot exceed the amount by which your income is above ₹12 lakh, so a small raise never costs you more tax than the extra income.
Putting the two together, a salary up to ₹12.75 lakh (₹12 lakh + ₹75,000) pays no income tax in the new regime.
Income tax at common salaries
This table takes the gross salary, subtracts the ₹75,000 standard deduction, and applies the slabs, rebate and cess. It assumes you claim nothing else.
| Gross salary | Taxable after ₹75,000 | Income tax a year | Per month |
|---|---|---|---|
| ₹8 lakh | ₹7,25,000 | Nil | Nil |
| ₹10 lakh | ₹9,25,000 | Nil | Nil |
| ₹12 lakh | ₹11,25,000 | Nil | Nil |
| ₹12.75 lakh | ₹12,00,000 | Nil | Nil |
| ₹15 lakh | ₹14,25,000 | ₹97,500 | ₹8,125 |
| ₹20 lakh | ₹19,25,000 | ₹1,92,400 | ₹16,033 |
| ₹25 lakh | ₹24,25,000 | ₹3,19,800 | ₹26,650 |
| ₹30 lakh | ₹29,25,000 | ₹4,75,800 | ₹39,650 |
| ₹50 lakh | ₹49,25,000 | ₹10,99,800 | ₹91,650 |
What you cannot claim in the new regime
HRA exemption, section 80C (including your own PF contribution and ELSS), 80D health insurance, home-loan interest on a self-occupied house and most other deductions are not available. Employer contribution to NPS (up to 14% of basic) is allowed. If your deductions are large, compare with the old regime using our old vs new regime guide.
Work out your own number
Tax is only part of the story. Your in-hand pay also depends on PF, professional tax and any variable pay. Use the in-hand salary calculator to turn your CTC into a monthly take-home, or look up a ready-made figure on the salary by CTC chart.
Frequently asked questions
Is income up to ₹12 lakh really tax-free?
Taxable income up to ₹12 lakh is tax-free because of the section 87A rebate. For a salaried person that means gross salary up to ₹12.75 lakh, after the ₹75,000 standard deduction.
Is the new regime the default?
Yes. Unless you tell your employer or choose the old regime when you file, the new regime applies.
Can I switch between regimes every year?
Salaried people without business income can choose a regime every year when they file their return. Check the current rules for your situation.
Does cess apply on top?
Yes. A 4% health and education cess is added to the tax. Surcharge also applies at very high incomes.
Last updated 2026-10-02. This guide gives general information for salaried individuals, not tax advice. Check the latest rules or ask a chartered accountant before you act.