What are the Personal Income Tax Rates in India for FY 2026–27?

NRIs should pay particular attention to the residency rules. The new tax regime slabs generally apply to both resident and non-resident individuals, but certain benefits are restricted.

For example, the Section 87A rebate is available only to resident individuals, not NRIs. Also, the old regime's higher basic exemption limits for senior citizens apply to resident individuals. A non-resident individual does not receive those age-based higher exemption limits.

The tax treatment of income such as capital gains, dividends and other special-rate income may also differ from normal slab taxation.

One important point is the Section 87A rebate. Eligible resident individuals with total income up to ₹12 lakh can receive a rebate of up to ₹60,000 under the new regime, subject to the applicable conditions.

For salaried taxpayers, the standard deduction of ₹75,000 can also reduce taxable salary under the new regime. This means an eligible salaried resident individual may have no tax liability on salary income up to ₹12.75 lakh, assuming no special-rate income or other adjustments.

However, this benefit should not be confused with the basic exemption limit. It is available through the standard deduction and tax rebate.

The new tax regime is the default regime, but eligible taxpayers can opt for the old regime.

For FY 2026–27, the new regime has seven income slabs, starting with a nil rate up to ₹4 lakh and going up to 30% for income above ₹24 lakh.

The old regime has fewer slabs and generally allows more deductions and exemptions. It may be beneficial for people who have substantial eligible investments, insurance premiums, housing loan interest or HRA exemptions.

It is worth calculating tax under both regimes before deciding.