Income tax FY 2026-27

How much income tax on a Rs 12 lakh salary in India?

Worked out slab by slab on the Finance Act rates in force for FY 2026-27 (assessment year 2027-28), including the standard deduction, the section 87A rebate and 4% cess.

On a gross salary of Rs 12 lakh, income tax for FY 2026-27 under the default new regime is Rs 0 — that is Rs 0 of slab tax plus Rs 0 of 4% health and education cess, after the Rs 75,000 standard deduction and a Rs 52,500 rebate under section 87A. Under the old regime with Rs 1.5 lakh of 80C and the Rs 50,000 standard deduction, the same salary would pay Rs 1,17,000, so the new regime is cheaper by Rs 1,17,000.

Worked out 2026-09-04 (IST) · Salaried resident individual under 60, new regime, no exempt allowances

The slab-by-slab working

Gross salary Rs 12,00,000, minus the Rs 75,000 standard deduction, gives a taxable income of Rs 11,25,000. The new-regime slabs then apply to that figure.

New regime, FY 2026-27 (AY 2027-28)
Income slab	Rate	Income taxed in this slab	Tax
Rs 0 to Rs 4,00,000	0%	Rs 4,00,000	Rs 0
Rs 4,00,000 to Rs 8,00,000	5%	Rs 4,00,000	Rs 20,000
Rs 8,00,000 to Rs 12,00,000	10%	Rs 3,25,000	Rs 32,500

Slab tax: Rs 52,500
Less section 87A rebate: − Rs 52,500
Health & education cess at 4%: Rs 0
Total tax payable: Rs 0 — an effective rate of 0.0% on gross salary.

Old regime vs new regime

The old regime only wins if your deductions are large enough to beat the new regime's lower rates. Here is the same salary under both, at four different levels of old-regime deductions.

Total tax on Rs 12,00,000 gross salary, FY 2026-27
Old-regime deductions claimed	Old regime tax	New regime tax	Cheaper by
None beyond standard deduction	Rs 1,63,800	Rs 0	New regime, Rs 1,63,800
Rs 1,50,000 (80C + 80D etc.)	Rs 1,17,000	Rs 0	New regime, Rs 1,17,000
Rs 2,50,000 (80C + 80D etc.)	Rs 96,200	Rs 0	New regime, Rs 96,200
Rs 4,00,000 (80C + 80D etc.)	Rs 65,000	Rs 0	New regime, Rs 65,000

The FY 2026-27 slabs in full

Unchanged from FY 2025-26. These are the rates the calculations above use.

New regime slabs, FY 2026-27
Taxable income	Rate
Up to Rs 4,00,000	Nil
Rs 4,00,001 to Rs 8,00,000	5%
Rs 8,00,001 to Rs 12,00,000	10%
Rs 12,00,001 to Rs 16,00,000	15%
Rs 16,00,001 to Rs 20,00,000	20%
Rs 20,00,001 to Rs 24,00,000	25%
Above Rs 24,00,000	30%

Rebate and cess, the two things people forget. Section 87A wipes out the tax entirely if taxable income is Rs 12,00,000 or less — a gross salary of Rs 12.75 lakh. Just above that, marginal relief caps your tax at the amount by which you crossed Rs 12 lakh. And 4% cess is charged on the tax, not on the income, so it is easy to under-budget.

Check your own numbers

Enter your actual salary, HRA, 80C and 80D figures to compare both regimes on your own numbers.

Income Tax CalculatorOld vs new regime, FY 2026-27 slabs, standard deduction and cess.

Frequently asked

Is a Rs 12 lakh salary tax free in India?

Almost. Under the new regime for FY 2026-27 a gross salary of up to Rs 12,75,000 pays zero tax: the Rs 75,000 standard deduction brings taxable income to Rs 12,00,000, and the section 87A rebate of up to Rs 60,000 cancels the tax on it exactly. A Rs 12 lakh gross salary is therefore comfortably tax free, with Rs 75,000 of headroom to spare.

What is the standard deduction for FY 2026-27?

Rs 75,000 under the new regime and Rs 50,000 under the old regime, for salaried employees and pensioners. It is applied automatically — you do not have to invest anything or produce a proof to claim it. That is why a gross salary of Rs 12.75 lakh pays zero tax under the new regime: Rs 12.75 lakh minus Rs 75,000 is exactly the Rs 12 lakh rebate ceiling.

Which regime is the default?

The new regime has been the default since FY 2023-24. If you say nothing, your employer deducts TDS under the new regime and you file under it. Choosing the old regime is an active opt-in; salaried taxpayers with no business income may switch either way each year at the time of filing.

Do the new-regime slabs allow 80C, HRA or home loan interest?

No. The new regime disallows 80C, 80D, HRA exemption, LTA and the Rs 2 lakh self-occupied home loan interest deduction. It keeps the Rs 75,000 standard deduction, the employer NPS contribution under 80CCD(2), and gratuity and leave-encashment exemptions. That trade — lower rates, no deductions — is the entire choice.

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