New Tax Regime Slabs: How Income Tax Is Calculated

Tax is charged progressively, not at one rate on all income

For FY 2025–26, assessed in AY 2026–27, taxable ordinary income is divided across the new-regime slabs. Each slice is taxed at its own rate. The highest rate reached is not applied to the entire amount.

Enter an already-determined taxable ordinary income amount in the Income Tax Calculator. The tool calculates slab tax, applicable Section 87A rebate or marginal relief, then 4% Health & Education Cess.

New-regime slabs for the supported period

A rate applies only to the part of income inside its band. The amounts from all occupied bands are added to produce slab tax.

Worked example: ₹15 lakh of taxable ordinary income

Assume ₹15,00,000 of taxable ordinary income under the new regime. This is an engine-generated illustration for the supported period; it does not derive taxable income from salary or other receipts.

Read the result in statutory sequence

The ₹1,05,000 slab tax comes from adding tax across the occupied bands. At this income there is no ordinary rebate or marginal relief, so tax after relief remains ₹1,05,000. Cess is ₹4,200, producing an estimated total of ₹1,09,200.

The threshold rules are explained in the Section 87A guide, while the cess guide explains why cess is applied after relief rather than to taxable income.

What this calculation includes—and leaves out

Within its ₹50 lakh ceiling, the calculator supports a selected old or new regime, age-sensitive old-regime slabs, ordinary slab-rate taxable income, configured Section 87A rebate and new-regime marginal relief, and Health & Education Cess.

It expects taxable ordinary income as an input. It does not derive gross salary, standard deduction, other deductions or exemptions; compute house-property or business income; classify capital gains, crypto/VDA, lottery or other special-rate income; or aggregate agricultural income.

It also does not model surcharge or surcharge marginal relief, determine residential or NRI status, simulate TDS/TCS or payroll withholding, calculate advance tax, tax paid, refund, sections 234A/B/C interest, Section 89 relief, foreign-tax or treaty relief, return-filing liability, or every statutory filing and payment rounding convention.