New Tax Regime — FY 2026-27 (AY 2027-28) / Income-tax Act, 2025

नई कर व्यवस्था (FY 2026-27 / आयकर अधिनियम 2025) विश्लेषण

Comprehensive guide to India's default New Tax Regime for FY 2026-27 (Income-tax Act, 2025): slab rates, ₹75,000 standard deduction, Section 156 tax rebate for taxable income up to ₹12,00,000 (zero tax up to ₹12.75 Lakh gross salary), and allowable deductions.

Written by: Author Profile

Direct Tax & CA Review Panel

Chartered Accountancy Review Panel • Senior Direct Tax Review Desk

Reviewed & Fact-Checked by: Technical Review Panel

Tax Law & Dispute Review Desk

Tax Litigation & Legal Review Panel • Tax Appeal & Procedure Review Desk

Published: 1st April 2026•Last Updated: 15th August 2026•Last Reviewed: 15th August 2026

Key Statutory Highlights (FY 2026-27 (AY 2027-28))

New Tax Regime under Income-tax Act, 2025 is the statutory default tax regime for all individual taxpayers, HUFs, and AOPs.

Gross salary up to ₹12,75,000 incurs ZERO tax liability under FY 2026-27 rules (₹75,000 standard deduction + ₹12,00,000 taxable income rebated 100% u/s 156).

Streamlined 7 slab brackets (0%, 5%, 10%, 15%, 20%, 25%, 30%) with maximum surcharge capped at 25%.

Employer contribution to NPS under Section 80CCD(2) allowed up to 14% of Basic + DA across government and private employees.

Historical FY 2025-26 rules: Section 87A rebate provided zero tax up to ₹7,00,000 taxable income (₹7.75L gross salary).

Who is Eligible & When Does it Apply?

Applicability #1

All resident and non-resident individual taxpayers.

Applicability #2

Salaried employees, professionals, pensioners, and business proprietors.

Applicability #3

Taxpayers can switch between regimes each financial year if they have no business income.

Step-by-Step Procedure & Compliance Roadmap

Determine Gross Annual Salary & Other Income

Sum all salary components and other income sources such as savings bank interest and fixed deposits.

Apply Allowable New Regime Deductions

Subtract ₹75,000 standard deduction and Section 80CCD(2) employer NPS contributions.

Apply Income-tax Act, 2025 Slab Brackets

Compute slab-wise tax: ₹0-4L Nil, ₹4-8L @ 5%, ₹8-12L @ 10%, ₹12-16L @ 15%, ₹16-20L @ 20%, ₹20-24L @ 25%, Above ₹24L @ 30%.

Apply Section 156 Full Rebate

If taxable income does not exceed ₹12,00,000, tax liability is 100% rebated up to ₹60,000 (with marginal relief above ₹12L).

Mandatory Documents Checklist

Form 16 from employer

Form 26AS and AIS statement

Bank statements for interest earnings

Common Mistakes & Compliance Risks to Avoid

•Trying to claim Section 80C or Section 80D deductions under the New Regime (these are disallowable under Section 115BAC).

•Forgetting that Section 80CCD(2) employer NPS IS allowed under the New Regime.

Frequently Asked Questions

Can I opt out of the New Tax Regime into the Old Regime?

Yes. Salaried individuals without business income can opt into the Old Tax Regime at the time of filing their ITR on or before 31st July.

Interactive Tax Calculators

Income Tax Calculator (Old vs New)Salary Take-Home Calculator

Related Tax Knowledge

Old Tax Regime Detailed Guide Current Tax Slabs Comparison

Ask FinSetu Mitra about New Tax Regime — FY 2026-27 (AY 2027-28) / Income-tax Act, 2025

Need clarification on this tax topic? Ask our bilingual AI Guide for instant conceptual guidance.

Connect with a Tax Consultant

Need filing assistance or personalized case representation? Connect with a qualified active professional.

🛡️ Educational Disclaimer: FinSetu India is an independent educational guidance and calculation platform. Content is published for general citizen awareness based on applicable laws as of FY 2026-27 (AY 2027-28). We do not provide personalized legal/tax advice or file returns directly. Verify current applicable rules on official portals or consult a qualified Chartered Accountant / Tax Lawyer.