tax
Know Taxation in India: Old vs New Slabs, Interest & ITR Forms
By Himanshu Kumar · 2026-05-06
If you are confused by tax language, start here. This page gives you a practical map of Indian personal taxation.
1) Tax regime choice: old vs new
- Old regime: wider deduction usage (for eligible users), useful when your deductible stack is strong.
- New regime: cleaner slabs and simpler filing for many salaried users.
- The right choice is always your final tax payable, not social media rules.
2) Slab-wise tax rates (quick view)
Old regime (illustrative non-senior slab structure)
- Up to ₹2.5L: 0% - ₹2.5L–₹5L: 5% - ₹5L–₹10L: 20% - Above ₹10L: 30%
New regime (illustrative FY 2025-26 model)
- Up to ₹4L: 0% - ₹4L–₹8L: 5% - ₹8L–₹12L: 10% - ₹12L–₹16L: 15% - ₹16L–₹20L: 20% - ₹20L–₹24L: 25% - Above ₹24L: 30%
> Always compare after rebate, surcharge, and cess.
3) Section 87A in one line
87A is a rebate on tax, not an investment section like 80C.
It can reduce slab tax significantly if taxable income is within notified limits.
4) Cess and surcharge
- Health and education cess is generally 4% on tax + surcharge.
- Surcharge applies only beyond higher income thresholds.
- Effective tax can jump when surcharge bands trigger.
5) Interest under income-tax (not FD/loan interest)
These are filing/compliance interests, commonly at 1% per month under applicable conditions:
- 234A: delay in filing return
- 234B: shortfall in advance tax
- 234C: deferment of advance-tax installments
6) Which ITR form is usually used?
- ITR-1: simple eligible salaried/pension profiles
- ITR-2: capital gains/foreign complexity without business income
- ITR-3: business or professional income
- ITR-4: eligible presumptive business/profession cases
Always validate final eligibility for your year before filing.
7) Practical checklist before filing
- Form 16
- AIS and 26AS reconciliation
- Interest certificates
- Capital gains statement
- Rent / loan / deduction proofs
Need a practical comparison with your numbers? Use the Tax Regime Calculator.
Frequently asked questions
- Is new regime always better up to ₹15–20 lakh?
- Often yes for many salaried users, but not always. Strong HRA/home-loan/deduction stacks can still make old regime better. Compare both using actual data.
- Is 87A the same as 80C?
- No. 87A is a rebate on computed tax. 80C is a deduction section that can reduce taxable income in eligible cases.
- Can wrong ITR form create notices?
- Yes. Wrong form selection and AIS mismatch are common reasons for post-filing issues. Validate form eligibility before submit.