From 1 July 2026, tax on salaries follows new slabs in the Finance Act 2026. The first Rs 600,000 a year is still tax free, and the rates in the middle bands are lower than last year.
| Annual taxable salary | Tax |
|---|---|
| Up to 600,000 | Nil |
| 600,001 – 1,200,000 | 1% above 600,000 |
| 1,200,001 – 2,200,000 | 6,000 + 11% above 1.2M |
| 2,200,001 – 3,200,000 | 116,000 + 20% above 2.2M |
| 3,200,001 – 4,100,000 | 316,000 + 25% above 3.2M |
| 4,100,001 – 5,600,000 | 541,000 + 29% above 4.1M |
| 5,600,001 – 7,000,000 | 976,000 + 32% above 5.6M |
| Above 7,000,000 | 1,424,000 + 35% above 7M |
Example
A salary of Rs 150,000 a month is Rs 1.8 million a year. Tax is 6,000 + 11% of 600,000 = Rs 72,000 a year, or Rs 6,000 a month.
What else changed
- The 9% surcharge on salaries above Rs 10 million has been abolished.
- Your employer deducts tax every month; your annual return still has to be filed to stay on the Active Taxpayers List.
Use the salary calculator on this page to check your own figure.
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General information, not advice for your specific case. Rates and dates can change; check the current law or ask us before acting.