New Tax Regime Slabs: How Income Tax Is Calculated

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

For Tax Year 2026–27 (the financial year from 1 April 2026 to 31 March 2027), taxable ordinary income is divided across the new-regime slabs in section 202 of the Income-tax Act, 2025. 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, the applicable resident-individual rebate or marginal relief under section 156, 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 resident-individual rebate 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, the configured resident-individual 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, salary-arrears relief, foreign-tax or treaty relief, return-filing liability, or every statutory filing and payment rounding convention.