Income Tax Slabs 2026-27 Explained: How Much Tax Do You Really Pay?

Many people in India feel confused about income tax. This usually happens because of a misunderstanding of tax slabs, choosing the wrong tax regime, or not knowing how deductions affect the final tax amount.

Common questions include:
Which tax slab do I fall under?
Am I paying more tax than required?
Should I choose the old tax regime or the new one?

For FY 2026–27 (AY 2027–28), understanding the tax slabs is crucial. Dileep Gupta’s professional income tax filing services in Kanpur ensure accurate calculation and seamless filing. The Income Tax Department now uses pre-filled returns, data matching, and digital checks. Even a small mistake can cause notices, delays in refunds, or additional tax liability.

In this blog, we break down the tax slabs in simple language, making it easier to calculate your taxes accurately.

Understanding the Income Tax Slab System in India

India follows a progressive tax system. This means tax rates increase as income increases. However, an important point many people miss is this:

Higher tax rates apply only to the extra income in that slab, not to your full income.

For example, if part of your income falls under the 20% slab, only that part is taxed at 20%. Your entire income is not taxed at that rate.

This slab-wise calculation is the basis of correct tax filing. Many people either pay extra tax or receive income tax notices simply because they do not understand how slabs work.

Our team of income tax practitioners in Kanpur ensures precise slab-wise tax calculation, so you pay exactly what you owe and stay fully compliant.

Tax Regimes Available for FY 2026-27

For FY 2026-27, individual taxpayers can choose between two tax regimes:

• Old Tax Regime—allows deductions and exemptions

• New Tax Regime—lower tax rates but fewer deductions (this is the default option)

Both regimes are valid. The better option depends on your income, deductions, and financial planning. For personalized advice, our income tax advocate in Kanpur can guide you on which regime suits your income and deductions best.

Latest Income Tax Slabs for FY 2026-27 (AY 2027-28)

Old Tax Regime

(Applicable for FY 2025-26 & FY 2026-27)

Under the old tax regime, once your taxable income crosses ₹10,00,000, a 30% tax rate applies to income above that limit.

That is why all higher income slabs under the old regime show the same tax rate.

Old Regime – Higher Income Slabs:

• ₹12,00,001 – ₹16,00,000 → 30%

• ₹16,00,001–₹20,00,000 → 30%

• ₹20,00,001 – ₹24,00,000 → 30%

• Above ₹24,00,000 → 30%

Income up to ₹10 lakh is taxed at lower rates (0%, 5%, and 20%), after considering deductions.

The old regime is useful if you claim deductions such as

• Investments under Section 80C

• Health insurance under Section 80D

• HRA, LTA, or home loan interest

We, as experienced income tax practitioners in Kanpur, can help check whether these deductions reduce your tax enough to make the old regime beneficial.

New Tax Regime

(Applicable for FY 2025-26 & FY 2026-27)

The new tax regime has gradual tax slabs, where tax rates increase step by step as income increases.

New Regime—Higher Income Slabs:

• ₹12,00,001 – ₹16,00,000 → 15%

• ₹16,00,001 – ₹20,00,000 → 20%

• ₹20,00,001 – ₹24,00,000 → 25%

• Above ₹24,00,000 → 30%

Important Benefits of the New Regime

• Resident individuals pay zero tax up to ₹12 lakh due to the Section 87A rebate

• Standard deduction is available for salaried taxpayers

• No separate tax slabs for senior citizens

Because of these benefits, many people find the new regime simpler and more cost-effective, especially when deductions are limited.

How Much Tax Do You Really Pay?

Let’s understand this with an example.

Example: Taxable Income of ₹15,00,000

Under the Old Tax Regime:

• Income above ₹10 lakh is taxed at 30%

• Tax is higher unless you claim large deductions

Under the New Tax Regime:

• Income between ₹12 lakh and ₹16 lakh is taxed at 15%

• Overall tax is often lower due to slab-wise calculation

Key Point to Remember

The tax rate you see is not applied to your full income. Actual tax depends on:

• Slab-wise calculation

• Available rebates

• Deductions (if any)

As income tax advocates at Dileep Gupta Tax Firm, we guide clients in Kanpur to file their tax returns accurately and confidently, ensuring peace of mind every step of the way

Old vs New Tax Regime: How to Choose

The new tax regime may be better if:

• You have fewer deductions

• Your income is mainly salary or professional income

• You want simple tax compliance

• Your taxable income is up to ₹12 lakh

The old tax regime may be better if:

• You invest under Section 80C

• You claim HRA or home loan interest

• You want long-term tax planning benefits

Doing a proper comparison before filing returns is important to avoid paying extra tax.

Common Taxpayer Mistakes

Many people increase their tax burden by:

• Choosing the default tax regime without comparison

• Ignoring interest income from savings accounts or FDs

• Missing advance tax payments

• Claiming wrong deductions

• Filing returns late or with errors

We provide expert income tax services in Kanpur to help our clients avoid tax mistakes through accurate calculations and timely compliance.

Why Income Tax Planning Is Important

Income tax filing is not just a yearly task. Good planning helps you:

• Pay less tax legally

• Avoid last-minute pressure

• Receive refunds faster

• Maintain a clean tax record

As a reliable income tax consultant in Kanpur, we focus on accuracy, clarity, and maximizing your long-term tax efficiency.

Final Thoughts

Income tax slabs for FY 2026-27 decide how much tax you pay, but only when they are applied correctly. True tax savings come from understanding slab-wise taxation, choosing the right tax regime, and planning your taxes on time.

Whether you are a salaried employee, professional, business owner, or NRI, making the right tax decisions helps you avoid extra tax and reduces the risk of notices or compliance problems.

To make this easier and stress-free, get expert income tax filing services in Kanpur from our experienced income tax consultants and advocates.

File accurately, stay compliant, and avoid costly mistakes.