7 tax slabs from 0% to 30% (New Regime)
India's hidden trap: the 30% top rate becomes 42.7% after surcharge (up to 37%) and 4% cess. A ₹15 lakh earner pays ~₹1.87 lakh (~12.5%) under the New Regime. Old vs New Regime choice: take New if you don't have ₹2.5+ lakh in 80C/80D deductions. ₹3 lakh is tax-free. Advance tax due quarterly if liability exceeds ₹10,000.
India offers two parallel tax regimes: the New Regime (lower rates 0-30%, no deductions) and Old Regime (higher rates but ₹1.5+ lakh in deductions under Section 80C/80D). New Regime is default from FY2024-25. But the 30% headline rate is misleading—add surcharge (10-37% of tax for incomes above ₹50 lakh) and 4% health & education cess. True top rate reaches 42.7% for ₹5 crore+ earners. A ₹15 lakh earner pays roughly ₹1.87 lakh (~12.5%) under New Regime. TDS (Tax Deducted at Source) means most salaried employees have tax auto-deducted. Advance tax quarterly payments required if liability exceeds ₹10,000. Filing deadline is July 31 (October 31 if audited). NRIs are taxed only on India-sourced income. Use our calculator to estimate your Indian tax liability.
| Taxable Income | Tax Rate |
|---|---|
| ₹0 - ₹400,000 | 0% |
| ₹400,000 - ₹800,000 | 5% |
| ₹800,000 - ₹1,200,000 | 10% |
| ₹1,200,000 - ₹1,600,000 | 15% |
| ₹1,600,000 - ₹2,000,000 | 20% |
| ₹2,000,000 - ₹2,400,000 | 25% |
| Over ₹2,400,000 | 30% |
Note: These are marginal rates - you only pay the higher rate on income within each bracket.
Source: Income Tax India
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Get Paid as a Contractor →New Regime slabs for FY 2026-27: 0% up to ₹4 lakh, 5% on ₹4-8 lakh, 10% on ₹8-12 lakh, 15% on ₹12-16 lakh, 20% on ₹16-20 lakh, 25% on ₹20-24 lakh, and 30% above ₹24 lakh. Standard deduction of ₹75,000 available. Section 87A rebate makes income up to ₹12 lakh effectively tax-free. New Regime is default but you can opt for Old Regime.
Choose Old Regime if you have significant deductions: Section 80C (₹1.5 lakh for PF, ELSS, insurance), 80D (health insurance ₹25,000-75,000), HRA exemption, or home loan interest (₹2 lakh). Rule of thumb: if deductions exceed ₹2.5-3 lakh, Old Regime saves money. Salaried employees can switch each year; business owners must commit for the year.
Surcharge is extra tax on high earners: 10% surcharge on income ₹50 lakh-1 crore, 15% on ₹1-2 crore, 25% on ₹2-5 crore, and 37% above ₹5 crore. The surcharge applies on the tax amount, not income. Combined with 4% cess, a ₹5 crore+ earner pays 30% × 1.37 × 1.04 = 42.7% effective marginal rate.
TDS (Tax Deducted at Source) means employers, banks, and payers automatically deduct tax from salary, interest, rent, etc. Most salaried employees need no action—TDS covers their liability. Self-employed and those with non-TDS income exceeding ₹10,000 tax liability must pay advance tax quarterly: 15% by June 15, 45% by Sept 15, 75% by Dec 15, 100% by March 15.
NRIs (Non-Resident Indians) pay tax only on India-sourced income: Indian salary, rental income from Indian property, capital gains on Indian assets, and interest from Indian banks. Foreign income is not taxable. NRI status: outside India for 182+ days in the financial year. RNOR (Returning NRI) status provides 2-3 year transition with limited taxation on foreign income.
Last Updated: March 2026