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Tax Slab

Income tax is charged in slabs: the first portion of income may be tax-free, the next portion taxed at 5%, the next at 10% and so on. Only the income within each slab is taxed at that slab’s rate.

Why It Matters

Moving into a higher slab does not mean all your income is taxed at the higher rate, a common misunderstanding.

In India

If the 20% slab starts at ₹16 lakh, someone earning ₹16.5 lakh pays 20% only on the last ₹50,000.

See it in the news
The new Income Tax Act starts today. Your tax doesn’t change. The book does.Apr 1, 2026Budget 2026: the tax on trading went up. The tax on salaries didn’t.Feb 2, 2026
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