Default new regime slabs ₹0-3-7-10-12-15-20-30L. ₹75K standard deduction salaried. ₹25K 87A rebate. NO 80C/80D/HRA. Simplified compliance.
Section 115BAC = NEW TAX REGIME (default from FY 2023-24). SLABS (FY 2026-27): (1) Up to ₹3L: 0%. (2) ₹3-7L: 5%. (3) ₹7-10L: 10%. (4) ₹10-12L: 15%. (5) ₹12-15L: 20%. (6) ₹15-20L: 25%. (7) Above ₹20L: 30%. PLUS: (1) ₹75K standard deduction (salaried). (2) 87A rebate ₹25K for income ≤ ₹7L (zero tax). (3) NO 80C/80D/80E/80G/HRA/24(b)/most deductions. (4) Most simplifications. (5) DEFAULT — selected automatically unless you opt for old regime.
115BAC SIMPLIFICATIONS: (1) FEWER slabs (7 vs old's 5). (2) Lower marginal rates at lower-mid income. (3) NO investment-tracking requirements. (4) NO documentation burden. (5) NO 80C/80D/HRA/etc. (6) Standard deduction ₹75K. (7) Employer NPS contribution (80CCD(2)) still allowed (max 10% basic). (8) Family pension deduction allowed. PURPOSE: Simplify tax filing, reduce compliance burden, encourage broader tax base.
NEW REGIME WINS: (1) Income < ₹7L (ZERO tax via 87A). (2) Income < ₹12L (lower slabs). (3) No significant deductions to claim. (4) Simplification preference. (5) Self-employed/freelancer without 80C utilization. OLD REGIME WINS: (1) Home loan + 80C + 80D maxed = ₹3L+ deductions. (2) HRA significant (metro renters). (3) Income > ₹15L with substantial deductions. (4) Children's education + family medical insurance + parents medical. SWITCH: salaried annually via Form 12BB. Business once via Form 10-IEA.
SALARIED FLEXIBILITY: (1) Switch each FY via Form 12BB to employer. (2) Compare both regimes annually via calculator. (3) NEW REGIME DEFAULT — if you don't elect explicitly, new applies. (4) Can switch back-and-forth indefinitely. (5) BUSINESS INCOME: ONE-TIME switch via Form 10-IEA. Once selected, locked. Move back hard. STRATEGIC: Salaried have flexibility. Business owners with significant deductions: stay old regime once selected.
EXAMPLES (FY 2026-27): (1) ₹6L salary: ZERO tax (87A rebate). (2) ₹10L salary: ₹54,600 tax (15% on ₹10-12L slab — actually 15% on ₹10L = ₹54.6K). (3) ₹15L salary: ₹1.4L tax. (4) ₹20L salary: ₹2.6L tax. (5) ₹30L salary: ₹5.5L tax. STANDARD DEDUCTION ₹75K reduces taxable income. Compare to OLD REGIME with deductions: 30L salary, ₹3L deductions (80C+80D+HRA): old regime ₹4.7L tax. NEW WINS ₹0.8L. For 50L salary: new regime advantageous in most scenarios.