Who pays how much tax in FY 2026-27? Slabs, rates and surcharge for salaried, senior and super senior citizens

For Financial Year (FY) 2026–27, salaried taxpayers, senior citizen, and super senior citizen continue to have the option of choosing between the old and new income-tax regimes, each offering a distinct mix of tax slabs, rates, and benefits.

While the new regime provides lower rates and a simplified structure with minimal exemptions, the old regime remains relevant for employees who can claim deductions and allowances such as HRA, and other tax-saving benefits. The choice between the two depends largely on an individual’s income structure and ability to optimise available exemptions.

Old Tax Regime

₹0 – ₹2.5 lakh → Nil

₹2.5 lakh – ₹5 lakh → 5%

₹5 lakh – ₹10 lakh → 20%

Above ₹10 lakh → 30%

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FY 2025 - 2026

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0 - 59 yrs

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New Tax Regime

₹0 – ₹4 lakh → Nil

₹4 lakh – ₹8 lakh → 5%

₹8 lakh – ₹12 lakh → 10%

₹12 lakh – ₹16 lakh → 15%

₹16 lakh – ₹20 lakh → 20%

₹20 lakh – ₹24 lakh → 25%

Above ₹24 lakh → 30%

The new regime has become increasingly popular, particularly among salaried individuals, as it offers a higher tax-free threshold and simpler calculations. Meanwhile, the old regime still appeals to those who can maximise deductions under sections like 80C, 80D, and for home loan interest.

These include significant increases in children’s education allowance, hostel expenditure allowance, and transport allowance for persons with disabilities. By retaining and modernising these provisions, the draft rules ensure that the old tax regime remains a viable and attractive option for taxpayers who rely on housing-related and family-oriented deductions to manage their tax liability.