Income Tax Slab

An income tax slab is a band of income taxed at a particular rate. India follows a progressive system: the first slab of your income is taxed lightly (or not at all), and only income above each threshold is taxed at the next, higher rate. So a raise never leaves you with less money in hand; only the extra income crosses into a higher bracket.

Two regimes

India runs two parallel systems, and you choose the one that costs you less:

- The New Tax Regime is now the default. It offers lower slab rates and a higher basic exemption, but disallows most deductions like 80C, HRA and 80D. It does include a standard deduction for salaried people. - The Old Tax Regime has higher rates but lets you claim a long list of deductions and exemptions.

Under the new regime, a generous Section 87A rebate means individuals with taxable income up to ₹12 lakh effectively pay zero tax, with marginal relief smoothing the jump just above that line. The old regime offers a smaller rebate up to ₹5 lakh.

In India

The slabs apply to your total taxable income after eligible deductions. On top of the slab tax, a 4% Health and Education Cess is added, and a surcharge applies to very high incomes. Salaried people see this collected monthly as TDS.

Why it matters

The regime choice is the single biggest tax decision most salaried Indians make each year. Roughly speaking:

- If you have large deductions (home loan interest, big 80C, HRA, health insurance), the old regime may still win. - If you have few deductions or want simplicity, the new regime usually wins, and after the ₹12 lakh rebate, many middle-class earners pay nothing.

A practical step: run your actual numbers through any tax calculator under both regimes before the financial year ends. Don't pick blindly. And remember that the new regime being default means you must actively opt for the old one if it benefits you.