Income Tax Slabs – New Tax Regime vs Old Tax Regime AY 2026-27

Yes, the new tax regime under section 115BAC is the default tax regime for AY 2026-27. Every taxpayer is initially taxable under the new regime unless they opt for the old tax regime subject to the applicable conditions.

For non-business income taxpayers, you can exercise the option directly in the ITR form while filing. For business taxpayers, the option needs to be exercised through Form 10-IEA before the due date of ITR filing u/s 139(1).

Under the new tax regime, individual residents with net taxable income up to ₹12,00,000 can claim a rebate up to ₹60,000. Under the old tax regime, the rebate limit is ₹12,500 for income up to ₹5,00,000.

Surcharge rates apply as follows: 10% for income ₹50 lakh to ₹1 crore, 15% for ₹1-2 crore, 25% for ₹2-5 crore. For income above ₹5 crore, surcharge is 25% (new regime) or 37% (old regime).

Health and education cess is applicable at 4% on the aggregate of income tax and surcharge (if any). This is in addition to the income tax and surcharge calculations.

Yes, under the old tax regime, senior citizens (60-80 years) have a higher basic exemption of ₹3,00,000, and super senior citizens (80+ years) have ₹5,00,000. Under the new regime, all individuals get ₹4,00,000 regardless of age.

Under the new tax regime, most Chapter VIA deductions are not available. However, deductions for section 24(b) interest on let-out property, section 80CCD(2) employer contribution, and section 80CCH for Agniveer Corpus Fund are still allowed.

This depends on your total income and eligible deductions. Generally, if you have significant deductions under old regime (80C, 80D, HRA, home loan interest), the old regime may result in lower tax. For simpler income with fewer deductions, the new regime with higher exemption may be beneficial.