The New Tax Regime under Section 115BAC continues for FY 2026–27 as per the latest Union Budget. There are no major changes in slab rates, and the structure remains simplified.
In this article, we explain:
-
Latest new tax slabs
-
Standard deduction
-
Section 87A rebate
-
Key features
-
Simple tax calculation example
Let’s understand clearly.
What is the New Tax Regime?
The New Tax Regime is a simplified income tax system introduced to reduce complexity.
It offers:
✔ Lower slab rates
✔ Fewer exemptions
✔ Simple calculation
✔ Default tax regime (unless you opt for old)
Most deductions like 80C, 80D, HRA, home loan interest etc. are not available under this regime.
Income Tax Slabs – New Tax Regime (FY 2026–27)
| Taxable Income | Tax Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
These rates apply to:
-
Salaried individuals
-
Professionals
-
Business income individuals
-
All age groups
Standard Deduction
For salaried individuals and pensioners:
₹75,000 standard deduction is allowed.
This reduces your taxable income before calculating tax.
Example:
Salary = ₹10,00,000
After standard deduction = ₹9,25,000 taxable income
Section 87A Rebate
Under the New Regime:
If your taxable income is up to ₹12,00,000, you may be eligible for full rebate under Section 87A.
This means:
👉 Your final tax liability can become ZERO (subject to conditions).
This is one of the biggest benefits of the new regime.
Health & Education Cess
After calculating tax:
4% cess is added on total tax.
Example:
Tax = ₹50,000
Cess (4%) = ₹2,000
Final tax payable = ₹52,000
Simple Tax Calculation Example
Suppose your gross salary is ₹13,00,000.
Standard deduction = ₹75,000
Taxable income = ₹12,25,000
Tax calculation:
0 – 4L → 0
4 – 8L (4L × 5%) = ₹20,000
8 – 12L (4L × 10%) = ₹40,000
12 – 12.25L (0.25L × 15%) = ₹3,750
Total tax = ₹63,750
-
4% cess = ₹2,550
Final tax = ₹66,300
Key Features of New Tax Regime
✔ Lower initial tax slabs
✔ Standard deduction allowed
✔ No need to invest compulsorily to save tax
✔ Same slabs for all age groups
✔ Default regime while filing ITR
Important Points to Remember
-
You can opt for old regime while filing return.
-
Salaried individuals can switch every year.
-
Business/profession income taxpayers have restrictions on switching.
-
Capital gains may be taxed separately.
-
Surcharge applies for higher income levels.
Conclusion
The New Tax Regime for FY 2026–27 continues with simplified slab rates and rebate benefits. It is beneficial for taxpayers who do not claim large deductions and prefer simple compliance.
Before filing your ITR, always compare both regimes and choose the one with lower tax liability.
For more simplified taxation guides, follow CAExplained.
Frequently Asked Questions (FAQs) – New Tax Regime FY 2026–27
1. Is the New Tax Regime compulsory in FY 2026–27?
No. The New Tax Regime is the default option, but taxpayers can choose the Old Tax Regime while filing their Income Tax Return (ITR).
2. What is the basic exemption limit under the New Tax Regime?
Under the New Tax Regime for FY 2026–27, income up to ₹4,00,000 is not taxable.
3. Is standard deduction allowed under the New Tax Regime?
Yes. Salaried individuals and pensioners can claim a standard deduction of ₹75,000 under the New Tax Regime.
4. Is income up to ₹12 lakh tax-free under the New Tax Regime?
Taxpayers with taxable income up to ₹12,00,000 may be eligible for rebate under Section 87A, which can reduce tax liability to zero (subject to conditions).
5. Can I claim 80C deductions under the New Tax Regime?
No. Most deductions like Section 80C, 80D, HRA, and home loan interest are not available under the New Tax Regime.
6. Can I switch between old and new tax regimes every year?
Salaried individuals can switch between regimes every year while filing ITR. However, individuals having business or professional income have restrictions on switching.
7. Is cess applicable under the New Tax Regime?
Yes. A 4% Health and Education Cess is applicable on the total tax calculated.
8. Which tax regime is better for FY 2026–27?
It depends on your income and deductions. If you do not claim many deductions, the New Tax Regime may be beneficial. Always compare both regimes before filing your return
0 Comments:
Post a Comment