How much income is tax-free in India for AY 2026-27?

⚡ Short answerUnder the new tax regime for AY 2026-27, income up to ₹12 lakh is effectively tax-free for resident individuals because of the enhanced Section 87A rebate. With the ₹75,000 standard deduction, a salaried person earning up to about ₹12.75 lakh can pay zero tax. Under the old regime, the basic exemption is ₹2.5 lakh (₹3 lakh for seniors, ₹5 lakh for super-seniors).

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New regime — the ₹12 lakh threshold

The new regime is the default. The 87A rebate wipes out tax for total income up to ₹12 lakh. Above that, slab rates apply on the whole income, but a marginal-relief mechanism softens the jump just over the threshold.

Old regime — exemption plus deductions

The old regime keeps a ₹2.5 lakh basic exemption but lets you stack deductions (80C, 80D, HRA, home-loan interest). With full deductions a taxpayer can also push their taxable income well down — compute both regimes before choosing.

Related questions

Is ₹12 lakh income completely tax-free?

Under the new regime, yes — the 87A rebate makes income up to ₹12 lakh tax-free. A salaried person also gets the ₹75,000 standard deduction on top, so the salary break-even is around ₹12.75 lakh.

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General information for AY 2026-27, not professional advice. Rules change with each Finance Act / notification and depend on your facts — verify with a licensed CA or advocate before acting.