Income Tax Slabs and Rates for FY 2025-26 (AY 2026-27)

If you earn income in India while living abroad, you have probably already looked for the correct NRI income tax slabs to estimate your Indian tax liability. However, the calculation is not simply about applying one percentage to your total income because the tax regime, type of income, surcharge, cess and NRI-specific rules can affect the final amount.

In this guide, you will find the income tax slabs and rates for NRIs for AY 2026–27, a direct old-versus-new regime comparison, NRI-specific rules on age and Section 87A rebate, special-rate income, and practical tax calculations.

Assessment Year covered: AY 2026–27 | Financial Year: FY 2025–26
Last updated: September 2026

Official reference: Income Tax Department, Non-Resident Individual for AY 2026–2027.

Key Takeaways

• NRI income tax slabs are the normal slab rates used to calculate tax on taxable income that is subject to normal rates in India.

• AY 2026–27 new-regime slabs start with Nil tax up to ₹4 lakh and progress through 5%, 10%, 15%, 20%, 25% and 30%.

• Old-regime NRI slabs provide a Nil rate up to ₹2.5 lakh, followed by 5%, 20% and 30% rates, with the normal rates applying irrespective of the NRI's age.

• The new tax regime is the default regime for eligible taxpayers, but eligible NRIs can opt for the old regime subject to the applicable rules.

• Section 87A rebate is not a general NRI benefit because the Income Tax Department specifies the rebate for resident individuals.

• Surcharge and 4% Health & Education Cess can increase the final tax payable beyond the basic slab-calculated tax.

• Special-rate income must be calculated separately because not every category of NRI income is taxed using ordinary slab rates.

What Are Income Tax Slabs and Rates for NRIs?

NRI income tax slabs are progressive tax rates used to calculate Indian income tax on taxable income that is subject to normal slab taxation. For AY 2026–27, a non-resident individual can be taxed under either the default new regime or the old regime if eligible, with different normal slab structures applying under each regime.

First, NRI status does not mean that every Indian-source income item automatically follows the normal slab system. Salary, eligible house-property income and certain other income may enter the normal tax calculation, while specified capital gains, dividends and other categories can be governed by special provisions.

For example, an NRI with ₹15 lakh of taxable income consisting entirely of normal-rate income can calculate basic tax using the applicable slabs. An NRI whose ₹15 lakh includes income taxed under a special rate needs to separate that income before applying the ordinary slabs.

The assessment year is also important because tax slabs can change from year to year. This article covers AY 2026–27, which relates to income earned during FY 2025–26.

Why Are NRI Income Tax Slabs Important?

NRI income tax slabs matter because they determine the basic tax payable on taxable income that is subject to normal rates. Using the wrong year's slabs or applying a slab rate to income that has a special tax rate can produce an incorrect tax estimate.

First, the slab system is progressive rather than a single-rate system. If your taxable income reaches the 30% slab, your entire income is not automatically taxed at 30%; each portion is taxed according to the applicable slab.

For example, under the AY 2026–27 new regime, taxable income of ₹15 lakh does not mean that ₹15 lakh is multiplied by 15% or 30%. The tax is calculated progressively across the applicable ₹4–8 lakh, ₹8–12 lakh and ₹12–15 lakh bands.

Second, the regime can change the calculation significantly. The new regime has a Nil threshold of ₹4 lakh and introduces additional 10%, 15%, 20% and 25% bands before the 30% rate, whereas the old regime reaches the 30% rate above ₹10 lakh.

Third, your final liability can be higher than the basic slab tax. Surcharge, where applicable, and 4% Health & Education Cess are added after calculating the applicable income tax.

What Are the New Tax Regime Slabs for NRIs in AY 2026–27?

For AY 2026–27, the new tax regime for a non-resident individual has a Nil rate up to ₹4 lakh, followed by 5%, 10%, 15%, 20%, 25% and 30% slabs. The Income Tax Department's NRI guidance provides these rates under Section 115BAC.

Source: Income Tax Department, 2026.

The new regime is progressive across seven normal-rate bands. For example, the tax on ₹15 lakh is calculated as ₹20,000 on the ₹4–8 lakh band, ₹40,000 on the ₹8–12 lakh band and ₹45,000 on the ₹12–15 lakh portion, producing basic tax of ₹1,05,000 before applicable cess.

The new tax regime is also the default regime for eligible individual taxpayers. An eligible NRI can opt out of the default regime and choose the old regime subject to the applicable rules.

What Are the Old Tax Regime Slabs for NRIs in AY 2026–27?

For AY 2026–27, the normal old-regime slabs for a non-resident individual are Nil up to ₹2.5 lakh, 5% from ₹2.5 lakh to ₹5 lakh, 20% from ₹5 lakh to ₹10 lakh and 30% above ₹10 lakh. The Income Tax Department specifically states that these normal rates apply to a non-resident individual irrespective of the taxpayer's date of birth.

Source: Income Tax Department, 2026.

The old regime can be relevant when an NRI has eligible deductions and exemptions that are available under that regime. For example, an NRI with eligible deductions may reduce taxable income under the old regime before applying the slab rates.

The old regime does not mean that every deduction is automatically available to every NRI. Eligibility depends on the particular provision, income type and taxpayer's circumstances.

NRI Tax Slabs: Old vs New Tax Regime Compared

The direct NRI tax comparison for AY 2026–27 shows that the new regime has a higher Nil threshold and more gradual slab rates, while the old regime has fewer slabs and a wider range of deductions and exemptions. The Income Tax Department confirms both structures for non-resident individuals.

Source: Income Tax Department, 2026.

The biggest difference is the point at which higher rates begin. Under the old regime, the 30% normal rate starts above ₹10 lakh, while under the new regime the 30% rate applies only to income above ₹24 lakh.

Direct Tax Comparison at Common Income Levels

The following examples compare basic tax under both regimes when the entire amount is normal-rate taxable income. These calculations exclude surcharge, Health & Education Cess, special-rate income, deductions and rebates.

Basic tax comparison calculated from the AY 2026–27 normal slab rates.

The comparison does not mean that the new regime will always produce lower final tax for every NRI. The old regime may become more competitive where the taxpayer has substantial deductions or exemptions that are available under the old regime but restricted under the new regime.

For example, an NRI with ₹15 lakh of gross income should not automatically compare ₹2.625 lakh under the old regime with ₹1.05 lakh under the new regime. The correct comparison requires calculating taxable income under each regime after applying the deductions and exemptions permitted by law.

Can NRIs Choose Between the Old and New Tax Regimes?

NRIs can choose between the new and old tax regimes if they are eligible, with the new regime being the default regime for AY 2026–27. The Income Tax Department's NRI guidance expressly provides an option to opt out of the default regime and choose the old regime.

For non-business cases, an eligible taxpayer can generally change the regime choice each year through the income-tax return. The return must be filed by the applicable due date under Section 139(1) when exercising the relevant option.

For eligible taxpayers with business or professional income, additional rules apply. An NRI who wants to opt out of the default new regime in such a case must generally furnish Form 10-IEA within the prescribed timeline, and restrictions apply when subsequently returning to the new regime.

When Should an NRI Consider the New Regime?

The new regime may be attractive when an NRI has limited eligible deductions and wants the lower, more gradual normal slab structure. For AY 2026–27, the regime does not reach the 30% normal slab until taxable income exceeds ₹24 lakh.

For example, an NRI with ₹15 lakh of normal-rate taxable income and limited deductions would have basic tax of ₹1.05 lakh under the new regime before cess and other applicable adjustments.

When Should an NRI Consider the Old Regime?

The old regime may be worth comparing when an NRI has significant deductions or exemptions that can reduce taxable income. The old regime preserves a broader set of deductions and exemptions than the new regime, subject to individual eligibility.

For example, an NRI with substantial eligible deductions may reduce old-regime taxable income enough to narrow or reverse the difference suggested by a simple headline slab comparison.

The best regime therefore depends on the taxpayer's actual taxable income rather than gross income alone. Compare both calculations after accounting for eligible deductions, exemptions and income taxed at special rates.

Does an NRI's Age Change the Income Tax Slabs?

An NRI's age does not create separate normal old-regime slab rates for a non-resident individual. The Income Tax Department specifically states that old-regime tax rates for a non-resident individual remain the same irrespective of the taxpayer's date of birth.

This rule is important for NRIs who are 60 or 80 years old because resident senior citizens can have different old-regime basic exemption limits. An NRI should not automatically apply those resident senior-citizen slabs simply because they have crossed the relevant age.

For example, a 65-year-old NRI does not use the resident senior-citizen old-regime Nil threshold merely because of age. The NRI-specific normal slab table applies instead.

Is Section 87A Rebate Available to NRIs?

The Section 87A rebate should not be presented as a general tax benefit available to NRIs because the Income Tax Department's AY 2026–27 guidance specifies the rebate for resident individuals. Therefore, an NRI should not reduce their calculated tax by automatically claiming the ₹60,000 new-regime rebate.

For example, if an NRI has ₹12 lakh of normal taxable income under the new regime, the basic slab tax is ₹60,000 before cess, but the resident-individual Section 87A rebate should not simply be applied to make that tax zero.

This distinction is especially important because general articles about the ₹12 lakh rebate may be written for resident taxpayers. NRIs should use the NRI-specific Income Tax Department guidance when determining rebate eligibility.

How Are Surcharge and Health & Education Cess Calculated for NRIs?

An NRI's basic income tax can be increased by surcharge, where applicable, and Health & Education Cess at 4%. The Income Tax Department provides separate surcharge rates for the old and new regimes and states that 4% cess applies to income tax plus surcharge, if any.

Source: Income Tax Department, 2026.

Health & Education Cess is calculated at 4% of income tax plus applicable surcharge. For example, if the basic tax is ₹1,05,000 and no surcharge applies, the 4% cess is ₹4,200, producing ₹1,09,200 before considering other adjustments.

Special surcharge rules can apply to certain categories of income. The Income Tax Department notes that enhanced surcharge rates are not levied on specified income covered by Sections 111A, 112, 112A and dividend income to the extent applicable, subject to the statutory exceptions listed by the Department.

Which NRI Income Is Taxed at Special Rates?

Special-rate income is income that is taxed under a specific statutory rate instead of being calculated entirely through the ordinary income-tax slabs. This means an NRI cannot assume that every item of Indian taxable income should simply be added together and subjected to the normal slab table.

For example, certain capital gains and other specified categories can have their own tax provisions. The applicable rate depends on the type of income, the relevant section and the transaction date.

This distinction matters because normal slab rates and special rates can operate within the same tax return. An NRI may therefore have some income calculated under normal slabs while another category is separately taxed at a prescribed rate.

As such, capital gains, dividends, winnings and other specially taxed income should be reviewed under their specific provisions before calculating the final liability. Do not use the normal NRI slab table as a substitute for the applicable special-rate provision.

NRI capital gains tax

How to Calculate Income Tax as an NRI: Examples

NRI tax calculation starts by identifying taxable income that is subject to normal rates and then applying the chosen regime's progressive slabs. You should separately account for special-rate income, eligible deductions, surcharge and cess.

Example 1: NRI With ₹8 Lakh of Normal Taxable Income

An NRI with ₹8 lakh of normal taxable income would have basic tax of ₹72,500 under the old regime and ₹20,000 under the new regime, before cess and other adjustments.

Under the old regime:

• Up to ₹2.5 lakh: Nil

• ₹2.5–₹5 lakh: ₹12,500

• ₹5–₹8 lakh: ₹60,000

• Basic tax: ₹72,500

Under the new regime:

• Up to ₹4 lakh: Nil

• ₹4–₹8 lakh: ₹20,000

• Basic tax: ₹20,000

The new-regime tax including 4% cess would be ₹20,800, assuming no surcharge or other adjustment.

Example 2: NRI With ₹15 Lakh of Normal Taxable Income

An NRI with ₹15 lakh of normal taxable income would have basic tax of ₹2,62,500 under the old regime and ₹1,05,000 under the new regime before cess.

Under the old regime:

• Up to ₹2.5 lakh: Nil

• ₹2.5–₹5 lakh: ₹12,500

• ₹5–₹10 lakh: ₹1,00,000

• Above ₹10 lakh: ₹1,12,500

• Basic tax: ₹2,62,500

Under the new regime:

• Up to ₹4 lakh: Nil

• ₹4–₹8 lakh: ₹20,000

• ₹8–₹12 lakh: ₹40,000

• ₹12–₹15 lakh: ₹45,000

• Basic tax: ₹1,05,000

The new-regime tax including 4% cess would be ₹1,09,200, assuming no surcharge or other adjustment.

Example 3: NRI With ₹30 Lakh of Normal Taxable Income

An NRI with ₹30 lakh of normal taxable income would have basic tax of ₹7,12,500 under the old regime and ₹4,80,000 under the new regime before cess.

Under the old regime:

• Up to ₹2.5 lakh: Nil

• ₹2.5–₹5 lakh: ₹12,500

• ₹5–₹10 lakh: ₹1,00,000

• Above ₹10 lakh: ₹6,00,000

• Basic tax: ₹7,12,500

Under the new regime:

• Up to ₹4 lakh: Nil

• ₹4–₹8 lakh: ₹20,000

• ₹8–₹12 lakh: ₹40,000

• ₹12–₹16 lakh: ₹60,000

• ₹16–₹20 lakh: ₹80,000

• ₹20–₹24 lakh: ₹1,00,000

• Above ₹24 lakh: ₹1,80,000

• Basic tax: ₹4,80,000

Because ₹30 lakh is below ₹50 lakh, no surcharge applies under the standard surcharge table. The new-regime amount after 4% cess would therefore be ₹4,99,200, assuming the entire income is normal-rate income and no other adjustments apply.

These examples are illustrations rather than complete tax-return calculations. Actual liability can change when deductions, special-rate income, losses, surcharge rules, tax credits or other statutory provisions apply.

How Can an NRI Estimate Taxable Income Before Applying the Slabs?

An NRI should determine taxable income before applying the tax slabs because gross receipts are not necessarily the same as taxable income. The calculation should begin with the nature and source of income and then apply the deductions, exemptions and special-rate provisions that are legally available.

First, determine your residential status for the relevant financial year. Residential status affects the scope of income taxable in India and should be established before making a detailed tax calculation.

NRI residential status guide

Second, identify Indian taxable income by category. Common categories can include salary, house-property income, interest, dividends, capital gains and business or professional income.

NRI tax on rental income guide 

Third, separate normal-rate income from special-rate income. This prevents you from incorrectly applying the ordinary slab table to income that is governed by a separate tax provision.

Fourth, calculate your tax under the eligible regimes. Compare the old and new regimes after applying the deductions and exemptions permitted under each regime.

Fifth, add surcharge and 4% Health & Education Cess where applicable. Also account for tax already deducted or paid when determining the remaining amount payable.

NRI TDS rates guide

Finally, verify the result against the applicable return and compliance requirements. A slab calculation is only one part of an NRI's overall Indian tax position.

NRI income tax return guide

Tools and Practical Application for NRI Tax Calculation

An NRI tax calculator can simplify the initial comparison between tax regimes, but it should be used only after correctly identifying taxable income and special-rate income. A calculator is most useful for comparing scenarios rather than replacing a tax professional's review of complex cross-border situations.

For example, you can enter normal taxable income of ₹15 lakh and compare the basic tax under both regimes before reviewing deductions and other adjustments.

NRI tax calculator

Free alternatives can also help with basic verification. The official Income Tax Department e-Filing portal provides an income-tax calculator and other tax services for taxpayers.

Income Tax Department e-Filing Portal

That being said, a calculator cannot decide whether an income item is subject to a special tax rate or whether a particular deduction is available to an NRI. Those questions require reviewing the relevant provisions and the taxpayer's facts.

What's Next for an NRI Calculating Indian Tax?

An NRI should follow a structured process before treating a slab calculation as their final tax liability. The following sequence reduces the risk of applying the wrong rate or regime.

1. Confirm residential status for the relevant financial year.

2. Identify Indian taxable income by income category.

3. Separate normal-rate and special-rate income.

4. Calculate taxable income after applicable deductions and exemptions.

5. Compare the old and new regimes if eligible.

6. Calculate basic income tax using the applicable rates.

7. Add surcharge and 4% Health & Education Cess, where applicable.

8. Adjust eligible tax already paid or deducted, including applicable TDS.

9. Review ITR and compliance requirements before filing.

The correct tax calculation depends on more than your total Indian income. Residential status, income classification, tax regime, deductions, special rates, surcharge and cess all need to be considered together.

NRI DTAA benefits

If you have income in both India and another country, you should also check whether treaty provisions or foreign-country tax rules affect the overall position. DTAA analysis is separate from simply determining your Indian slab rate.

Conclusion

NRI income tax slabs for AY 2026–27 depend on the applicable tax regime and whether the income is subject to normal or special tax rates. Under the new regime, the normal slabs range from Nil up to ₹4 lakh to 30% above ₹24 lakh, while the old regime uses Nil up to ₹2.5 lakh, 5% up to ₹5 lakh, 20% up to ₹10 lakh and 30% above ₹10 lakh.

The new regime is the default for eligible taxpayers, but an eligible NRI can opt for the old regime subject to the applicable rules. The old regime can remain relevant when eligible deductions and exemptions materially reduce taxable income.

NRIs should also remember that the Section 87A rebate is not a general NRI benefit, age does not create separate normal old-regime slabs for non-residents, and surcharge and 4% Health & Education Cess can affect the final amount. Most importantly, special-rate income should be calculated under its applicable provisions rather than being forced into the ordinary slab table.

If your Indian income includes property transactions, capital gains, business income, DTAA considerations or significant cross-border transactions, a simple slab comparison may not be sufficient. In those situations, professional tax advice can help ensure that the final calculation reflects the rules applicable to your specific circumstances.