If there are any changes in the income tax income slab or other taxation slab rates, the Finance Minister of India announces it during the presentation of the Union Budget. The income tax slabs in India determine the rates at which different taxpayers are supposed to pay income tax to the Government, and it serves as the foundation for the current Indian income tax slabs.

During the Union Budget 2020 presentation, Finance Minister Mrs Nirmala Sitharaman announced the new tax regime and existing tax regimes. The new regime differs from the old regime in multiple ways and is launched to simplify the tax filing process for taxpayers.

Since India has two different income tax regimes, the tax slabs for each are different.

As per the Income Tax Act of 1961, all earning individuals in India are required to pay income tax to the Government. The income tax rate slab rate at which different individuals are required to pay the income tax is referred to as the income tax slab. Different income tax rates apply to taxpayers belonging to different income groups. As per the current tax slab in salary in India, the tax rate depends on the taxpayer’s income.

As per the Union Budget 2023, no changes have been made to the current Indian income tax slabs for individual taxpayers. As per the income tax slab details, individuals earning less than Rs. 2.5 lakhs per year are not required to pay any tax. The minimum current income tax slab rate is 5% for those earning between Rs. 2.50 lakhs to Rs. 5 lakhs.

Below are the income tax slab rates for FY 2025-26 (AY 2026-27) as per the old regime:

Please note that the above income tax slab is applicable for individuals aged below 60 years. The following table presents the senior citizen tax slab, i.e., the tax slab for those aged between 60 to 80 years.

The income tax slab for super senior citizens, i.e., those aged 80 or above is:

During the Union Budget 2020, it was announced that the new regime tax slab would be the same for all individuals, including senior and super-senior citizens. Moreover, paying taxes per the new tax regime is currently optional for taxpayers. The following table presents the applicable tax rate per the new regime:

If you want to evaluate how much tax you are liable to pay under your taxable salary slab, you can use an online income tax calculator. You will need to enter your total taxable income after tax deductions and specify whether you’ve opted for the old or the new tax regime. The calculator shows your estimated tax under the relevant current salary tax slab.

Since the Government of India has currently made it default for taxpayers to opt for the new tax regime, you can choose between the old and new taxation slab rates while filing your Income Tax Returns (ITR).

Here are a few pointers that can help you make an informed decision:

• No tax deductions will be available if you opt for the new tax regime. So it may benefit those in different tax slabs who make fewer investments.
• The new regime has six income tax slabs with lower rates than the four slabs in the old regime. Individuals falling into mid-income group slabs can benefit from the new regime.
• If you invest in tax-saving instruments like NPS, PPF, and health insurance, selecting the old tax regime may be more beneficial when considering your income tax individual slab.
• Do a comparative evaluation of the tax you must pay under both regimes to arrive at a decision.