How much income tax do I pay in India?
Short answer
It depends on your regime and slab. India taxes income progressively through slabs, with a new regime offering lower rates and almost no deductions, and an old regime with higher rates and substantial deductions. A rebate means many taxpayers below a threshold pay nothing at all.
Verified · 3 cited sources
Indian income tax is slab-based and progressive: income within each band is taxed at that band's rate, so moving into a higher slab never reduces your take-home. Surcharge applies above high income thresholds, and a health and education cess is added on the tax.
Two regimes run in parallel. The new regime, now the default, has more slabs at lower rates but removes almost all exemptions and deductions. The old regime has higher rates but allows HRA, home loan interest on a self-occupied property, section 80C investments, 80D health insurance and others.
A rebate under section 87A means taxpayers with total income below a threshold pay no tax at all, and that threshold is different under the two regimes. This is why a large share of filers have zero liability but still need to file.
Slab rates, the rebate threshold, the standard deduction and every deduction limit change with each Finance Act and take effect from 1 April, which is why this page quotes none of them. Use the calculator on incometax.gov.in for the assessment year you are filing.
Capital gains are taxed separately under their own rates depending on the asset and holding period, and are not part of the slab computation.
Salaried people also pay professional tax in states that levy it, and contribute to provident fund — neither is income tax, but both reduce take-home.
Filing is required if income before deductions exceeds the basic exemption limit, and separately in specified situations such as holding foreign assets or making high-value transactions, even where no tax is payable.
- Progressive slabs; moving up a slab never reduces take-home
- New regime: lower rates, almost no deductions. Old regime: higher rates, many deductions
- Section 87A rebate means many below a threshold pay nothing
- Capital gains are taxed separately, outside the slabs
- Rates change with each Budget, effective 1 April
Sources & provenance
Facts verified
- 1.Tax calculator OfficialIncome Tax DepartmentUsed for: Current slabs and side-by-side regime comparison
- 2.Income-tax Act — sections 87A and 115BAC LawGovernment of IndiaUsed for: Rebate and the new regime's structure
- 3.Who must file a return OfficialIncome Tax DepartmentUsed for: Mandatory filing conditions beyond the exemption limit
The slab structure, rebate mechanism and regime difference come from the Income Tax Department and the Income-tax Act as cited. Every specific figure — slab rates, thresholds, the rebate limit, standard deduction, surcharge bands and cess — changes with each Finance Act and is deliberately not quoted. Run the official calculator for your assessment year.
Facts on this page are taken from the sources listed above — Government of India ministries and departments, statutory authorities, regulators such as the RBI, SEBI, IRDAI and TRAI, state governments and official statistical releases. Comparisons, judgments and "which option suits whom" conclusions are AI-assisted analysis written over those sources; they are marked in the text and listed as an AI-analysis entry in the sources, not attributed to any authority. Fees, slabs, limits and processing times change, often at the start of a financial year on 1 April; figures are current as of the review date shown and should be confirmed with the responsible department before you rely on them. A great deal of Indian administration is state administration — where a rule differs by state, this site says so.