Income Tax Slabs and Rates for AY 2026-27: Complete Guide Under Finance Act 2026

This guide consolidates the income-tax rates prescribed under the Income-tax Act, 1961, as modified by the Finance Act, 2026, applicable for Assessment Year 2026-27. It covers every major category of assessee — Individuals, HUFs, AOPs, BOIs, partnership firms, LLPs, local authorities, domestic companies, foreign companies, and co-operative societies — along with applicable surcharge, health and education cess, marginal relief mechanics, and Alternate Minimum Tax (AMT) / Minimum Alternate Tax (MAT) implications.

Since taxation of individuals and HUFs follows a slab-based structure while companies are largely taxed at flat rates (barring certain specified incomes), this write-up walks through each category separately so that an assessee can quickly identify the rate structure relevant to their status.

1. Individuals, HUFs, AOPs, BOIs and Artificial Juridical Persons

Individual Assessees (Excluding Resident Senior/Super Senior Citizens)

Net Income Range AY 2026-27 AY 2025-26
Up to Rs. 2,50,000 Nil Nil
Rs. 2,50,000 to Rs. 5,00,000 5% 5%
Rs. 5,00,000 to Rs. 10,00,000 20% 20%
Above Rs. 10,00,000 30% 30%

Resident Senior Citizens (Age 60 to below 80 years during the previous year)

Net Income Range AY 2026-27 AY 2025-26
Up to Rs. 3,00,000 Nil Nil
Rs. 3,00,000 to Rs. 5,00,000 5% 5%
Rs. 5,00,000 to Rs. 10,00,000 20% 20%
Above Rs. 10,00,000 30% 30%

Resident Super Senior Citizens (Age 80 years or above during the previous year)

Net Income Range AY 2026-27 AY 2025-26
Up to Rs. 5,00,000 Nil Nil
Rs. 5,00,000 to Rs. 10,00,000 20% 20%
Above Rs. 10,00,000 30% 30%

HUF, AOP, BOI and Artificial Juridical Person

Net Income Range AY 2025-26 AY 2024-25
Up to Rs. 2,50,000 Nil Nil
Rs. 2,50,000 to Rs. 5,00,000 5% 5%
Rs. 5,00,000 to Rs. 10,00,000 20% 20%
Above Rs. 10,00,000 30% 30%

Applicable Surcharge

An additional surcharge kicks in once the total income of an assessee crosses defined thresholds:

Income Bracket Surcharge Rate
Rs. 50 Lakhs to Rs. 1 Crore 10%
Rs. 1 Crore to Rs. 2 Crores 15%
Rs. 2 Crores to Rs. 5 Crores 25%
Above Rs. 5 Crore 37%

Key Notes:

  1. The elevated surcharge rates of 25% and 37% do not apply to dividend income or income falling under Section 111A, Section 112, Section 112A and Section 115AD(1)(b). For such income streams, the surcharge is capped at 15%.
  2. Where all members of an AOP are companies, the surcharge rate is restricted to a maximum of 15%.
  3. No surcharge is levied where the total income of a 'specified fund' under Section 10(4D) comprises income from securities as described in Section 115AD(1)(a).

Marginal relief provisions ensure that surcharge liability doesn't disproportionately erode income gains near threshold limits:

  1. Where income exceeds Rs. 50 lakh but stays within Rs. 1 crore, the combined income-tax and surcharge cannot exceed the tax payable on Rs. 50 lakh income plus the incremental income beyond Rs. 50 lakh.
  2. Where income exceeds Rs. 1 crore but stays within Rs. 2 crore, similar relief applies referencing the Rs. 1 crore threshold.
  3. Where income exceeds Rs. 2 crore but stays within Rs. 5 crore, relief is computed with reference to the Rs. 2 crore threshold.
  4. Where income exceeds Rs. 5 crore, relief is computed with reference to the Rs. 5 crore threshold.

Health and Education Cess

A flat 4% cess applies on the sum of income-tax and surcharge.