New Tax Regime Is Now Section 202: Same Slabs, New Number

Intro: If you have seen a new section number on a tax article this month, you are not reading about a new tax. The new tax regime — the default for most individual taxpayers — has moved from Section 115BAC of the Income-tax Act, 1961 to Section 202 of the Income-tax Act, 2025, for income earned from 1 April 2026 onwards. The slabs, standard deduction and rebate are the same. Only the legal references have changed — and mixing up old and new references is now the easiest way to misread a tax guide. Quick Answer: Under the Income-tax Act, 2025, the new tax regime sits in Section 202, replacing Section 115BAC from 1 April 2026. Slabs are unchanged: nil to ₹4 lakh, then 5% to 25% in ₹4 lakh steps, 30% above ₹24 lakh. Salaried taxpayers still get a ₹75,000 standard deduction, and residents with taxable income up to ₹12 lakh still get up to ₹60,000 rebate, now Section 156.

Changed: the Act itself. Income earned from 1 April 2026 falls under the Income-tax Act, 2025, and the year is now called a "tax year" rather than an assessment year. The regime's number is 202; the rebate's is 156. The rule for leaving the new regime is now Rule 136 of the Income-tax Rules, 2026, replacing Rule 21AD, according to guides tracking the transition. Unchanged: every number that affects your bill — slabs, ₹75,000 standard deduction, ₹60,000 rebate cap, ₹12 lakh rebate threshold and 4% cess. The Finance Act, 2026 did not change the slab rates. For tax year 2026-27, any guide claiming different taxation is describing renumbering, not a rate change. One more distinction: returns for FY 2025-26 income, filed in AY 2026-27, are still governed by the 1961 Act — that is why the extended 21 November 2026 deadline for audited taxpayers belongs to the old Act's season. Do not apply new-Act numbers to an old-Act return, or vice versa.

The new-regime slabs for tax year 2026-27, before cess, are: - Up to ₹4,00,000: nil - ₹4,00,001 to ₹8,00,000: 5% - ₹8,00,001 to ₹12,00,000: 10% - ₹12,00,001 to ₹16,00,000: 15% - ₹16,00,001 to ₹20,00,000: 20% - ₹20,00,001 to ₹24,00,000: 25% - Above ₹24,00,000: 30% The slabs are the same for every age group under the new regime — no separate senior-citizen slab, unlike the old regime. Tax at the top of each band builds up predictably: ₹20,000 at ₹8 lakh, ₹60,000 at ₹12 lakh, ₹1,20,000 at ₹16 lakh, before cess.

The rebate is the reason "₹12 lakh tax-free" is accurate and also easy to misunderstand. At a taxable income of ₹12 lakh, the slab tax is ₹60,000 (₹20,000 from the 5% band plus ₹40,000 from the 10% band). The rebate of up to ₹60,000 wipes that out, leaving nil tax before cess. For a salaried taxpayer, the ₹75,000 standard deduction comes first: a salary of ₹12,75,000 becomes ₹12,00,000 of taxable income, and the same rebate applies. Two limits matter. First, the rebate applies only to slab-rate income, not to special-rate income such as capital gains. Second, it is for resident individuals only, not companies or firms. Just above ₹12 lakh, marginal relief softens the cliff, so tax does not suddenly jump on ₹1 of extra income — but the relief tapers out, and by roughly ₹12.75 lakh of taxable income the full slab tax applies.

Take a salary of ₹15,00,000. Less the ₹75,000 standard deduction, taxable income is ₹14,25,000. Slab tax: ₹20,000 plus ₹40,000 plus 15% of ₹2,25,000 (₹33,750) equals ₹93,750. Add 4% cess (₹3,750) and the total is ₹97,500. No rebate applies, because taxable income exceeds ₹12 lakh. Take a salary of ₹18,00,000. Less ₹75,000, taxable income is ₹17,25,000. Slab tax: ₹20,000 plus ₹40,000 plus ₹60,000 plus 20% of ₹1,25,000 (₹25,000) equals ₹1,45,000. Add 4% cess (₹5,800) and the total is ₹1,50,800. These are simplified illustrations before any other income, deductions or surcharge that may apply to an individual case; they are not a substitute for a computation on your own figures.

The new regime remains the default. Anyone who wants the old regime and its deductions must actively opt out, by the due date — the same position as before. The old regime still offers its familiar deductions, including the 80C basket, now Section 123 under the new Act (covered here on 30 September), but only if you opt out. Business taxpayers face a stricter rule: guides tracking Section 202 note that a business taxpayer who opts out can switch back to the new regime only once, while salaried taxpayers can generally choose each year. If you have business income, treat a switch as a longer-term decision and take advice first.

First, check which regime your employer's payroll uses for tax deduction at source. Near ₹12.75 lakh, a wrong assumption shows up as smaller monthly take-home, even though the final return would correct it. Second, compare old and new on the same year's rules — do not mix a 1961-Act deduction list with a 2025-Act slab table. Third, keep your AY 2026-27 return's numbers separate: your next return will cite Section 202, not 115BAC. Educational content only — not financial advice. Consult a SEBI-registered investment adviser for personal guidance; investments are subject to market risk. Sources: TaxGuru, "Section 202 vs Section 115BAC: New Tax Regime Under Income-tax Act, 2025"; Upstox, "New Tax Regime shifts from Section 115BAC to Section 202" (2 November 2026); Business Standard, "November money changes" (2 November 2026, audited-ITR extension to 21 November 2026). Tax examples computed by hand from the published slabs and verified against the published band totals.