Income tax in India

Income tax in India is a direct tax levied by the Government of India on the income earned by individuals, businesses, and other entities. It is administered by the Income Tax Department.

### Current Individual Income Tax Slabs (FY 2025–26 / AY 2026–27)

**New Tax Regime (default regime):**

| Annual Income | Tax Rate |
| ------------------- | -------- |
| Up to ₹4 lakh | Nil |
| ₹4 lakh – ₹8 lakh | 5% |
| ₹8 lakh – ₹12 lakh | 10% |
| ₹12 lakh – ₹16 lakh | 15% |
| ₹16 lakh – ₹20 lakh | 20% |
| ₹20 lakh – ₹24 lakh | 25% |
| Above ₹24 lakh | 30% |

Salaried taxpayers also get a standard deduction of ₹75,000. Under the new regime, income up to ₹12 lakh can effectively have zero tax liability because of the Section 87A rebate, subject to applicable conditions. ([cleartax][1])

### Old Tax Regime

| Annual Income | Tax Rate (below 60 years) |
| ------------------- | ------------------------- |
| Up to ₹2.5 lakh | Nil |
| ₹2.5 lakh – ₹5 lakh | 5% |
| ₹5 lakh – ₹10 lakh | 20% |
| Above ₹10 lakh | 30% |

The old regime allows deductions and exemptions such as:

* Section 80C (PPF, ELSS, LIC, etc.)
* Section 80D (Health Insurance)
* HRA exemption
* Home loan benefits

([cleartax][2])

### Which Regime Is Better?

* **New regime:** Usually better if you do not claim many deductions.
* **Old regime:** Often beneficial if you claim substantial deductions through investments, insurance, HRA, or home loans.

### Income Tax Return (ITR)

Most taxpayers file an Income Tax Return (ITR) every year, reporting:

* Salary income
* Business/professional income
* Capital gains
* Interest income
* Rental income
* Deductions and exemptions

Before filing, it is recommended to verify Form 26AS, AIS, TDS details, and other income records. ([The Times of India][3])