A tax slab is a band of income charged at one rate. India does not tax your entire income at the rate of the top band you touch. Each band taxes only the rupees that fall inside it. Cross into 15% and the rupees below that line stay at the lower rates.
In the new regime, section 202, the bands for FY 2026-27 are: nil up to ₹4,00,000, 5% on the next slice up to ₹8 lakh, 10% up to ₹12 lakh, 15% up to ₹16 lakh, 20% up to ₹20 lakh, 25% up to ₹24 lakh, and 30% above ₹24 lakh. Age does not move these lines.
In the old regime a resident under 60 has a nil band of ₹2,50,000, then 5% up to ₹5,00,000, 20% up to ₹10 lakh, and 30% above ₹10 lakh. A senior and a super senior have a higher nil band. That is one reason two people with the same salary can see different old-regime bills.
The slab tax is not the bill you pay. Section 156 may reduce it. Surcharge may increase it once income crosses ₹50 lakh. Cess of 4% is charged on tax plus surcharge. Special-rate gains under sections 196, 197 and 198 are not poured through these bands.
A worked example
Taxable income of ₹14,25,000 in the new regime, from salary of ₹15,00,000 after the standard deduction, is split like this by the tax engine.
₹4,00,000 is taxed at 5%, which is ₹20,000. ₹4,00,000 is taxed at 10%, which is ₹40,000. ₹2,25,000 is taxed at 15%, which is ₹33,750. Add those and the slab tax is ₹93,750. The first ₹4,00,000 contributes nothing. Cess is ₹3,750. The bill is ₹97,500. Nobody should multiply ₹14,25,000 by 15% and call that the tax. That would ignore the lower bands.
The income tax calculator shows the rows. The slab guide writes the bands in words. If you are choosing a regime, the slab shapes are half the choice. The deductions are the other half, on the regime calculator.
Mistakes people make
- Multiplying total income by the top rate you reached.
- Using the new-regime bands on an old-regime return, or the reverse.
- Assuming a senior citizen gets a higher nil band in section 202. The higher nil band is an old-regime rule.
- Forgetting that a rebate can wipe the slab tax even when a band above nil was used. That is how ₹12,00,000 of income can owe ₹0.
- Putting a section 198 share gain into a slab because it “feels like income”.
The section
New-regime bands: section 202 (this was section 115BAC). Old-regime bands: the First Schedule rates for a person not taxed under section 202. The rebate that can clear a slab bill is section 156 (this was section 87A).
Questions
Does crossing a slab tax my whole income at the higher rate?
No. Only the slice inside each band is taxed at that band’s rate. On taxable income of ₹14,25,000 in the new regime, ₹4,00,000 is taxed at 5% and a higher slice is taxed at 15%. The income below ₹4,00,000 stays at zero.
Are the slabs the same in both regimes?
No. The new regime’s nil band is ₹4,00,000 and the top rate starts above ₹24 lakh. The old regime’s nil band for a resident under 60 is ₹2,50,000, and 30% starts above ₹10 lakh.
Do capital gains use the slabs?
Listed equity does not. Section 196 is 20% and section 198 is 12.5%. A short-term gain on gold or a house does use the slabs of the regime you file.
Sources
Figures checked 28 Oct 2026.