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Microlesson · 5-min read

Slab Rates under Optional (Old) Tax Regime

# Slab Rates under Optional Scheme (Old Tax Regime)

## (1) Individual / HUF / AOP / BOI / AJP (Resident or Non-Resident)

Total Income SlabRate
Up to Rs. 2,50,000Nil
Rs. 2,50,001 – Rs. 5,00,0005%
Rs. 5,00,001 – Rs. 10,00,00020%
Above Rs. 10,00,00030%

## (2) Senior Citizen (Resident Individual, Age 60 or more)

Total Income SlabRate
Up to Rs. 3,00,000Nil
Rs. 3,00,001 – Rs. 5,00,0005%
Rs. 5,00,001 – Rs. 10,00,00020%
Above Rs. 10,00,00030%

## (3) Super Senior Citizen (Resident Individual, Age 80 or more)

Total Income SlabRate
Up to Rs. 5,00,000Nil
Rs. 5,00,001 – Rs. 10,00,00020%
Above Rs. 10,00,00030%

## Important Note: Age Cut-off

> A Resident Individual whose 60th/80th birthday falls on 1st April 2026 would be treated as 60/80 years in the PY 2025-26, and would be eligible for the higher basic exemption limit of Rs. 3 lakh / Rs. 5 lakh in computing his tax liability for AY 2026-27.

### Why?

Under Income Tax law, a person born on 1st April is treated as having completed the age on the previous day (31st March) per the General Clauses Act — hence treated as senior in PY 2025-26 itself.

## Non-Individual Entities (Optional Regime)

### (4) Firm / LLP / Local Authority

  • Flat Rate of 30% on whole of Total Income (no slabs)

### (5) Co-operative Society

Total IncomeRate
Up to Rs. 10,00010%
Rs. 10,001 – Rs. 20,00020%
Above Rs. 20,00030%

### (6) Domestic Company

ConditionRate
If TOTAL T/O or Gross Receipts in PY 2023-24 is up to Rs. 400 crore25%
In any other case30%

### (7) Foreign Company (General Rate)

  • 35%

Worked example

### Example 1

Example 1: Mr. X (age 45, Resident) has Total Income of Rs. 8,00,000 under Old Regime.

Tax computation:

  • Up to Rs. 2,50,000 → Nil = 0
  • Rs. 2,50,001 to Rs. 5,00,000 (Rs. 2,50,000) × 5% = Rs. 12,500
  • Rs. 5,00,001 to Rs. 8,00,000 (Rs. 3,00,000) × 20% = Rs. 60,000
  • Total Tax = Rs. 72,500 (before cess)

### Example 2

Example 2: Mrs. Y (age 65, Resident Senior Citizen) has Total Income of Rs. 7,00,000 under Old Regime.

Tax computation:

  • Up to Rs. 3,00,000 → Nil = 0
  • Rs. 3,00,001 to Rs. 5,00,000 (Rs. 2,00,000) × 5% = Rs. 10,000
  • Rs. 5,00,001 to Rs. 7,00,000 (Rs. 2,00,000) × 20% = Rs. 40,000
  • Total Tax = Rs. 50,000 (before cess)

### Example 3

Example 3: Mr. Z, born 1st April 1966. For AY 2026-27 (PY 2025-26), is he a Senior Citizen?

Answer: Yes — his 60th birthday falls on 1st April 2026, so he is treated as 60 years in PY 2025-26. He gets the higher Rs. 3,00,000 basic exemption.

### Example 4

Example 4: XYZ Pvt. Ltd. (Domestic Company) had Gross Receipts of Rs. 350 crore in PY 2023-24. Its Total Income in PY 2025-26 is Rs. 50 crore.

Tax rate: 25% (since T/O in PY 2023-24 ≤ Rs. 400 cr)

⚠️ Common exam mistakes

  • Applying senior citizen slab to NON-RESIDENT individuals. The higher exemption is only for RESIDENT seniors.
  • Forgetting to check the relevant PY for company turnover (PY 2023-24, NOT current year).
  • Treating Super Senior Citizen as having a separate 5% slab — they directly jump to 20% after the Rs. 5,00,000 exemption.
  • Confusion on 1st April birthday — person born on 1st April is treated as completing the relevant age in the PREVIOUS PY itself.
Reference: — Finance Act / Income Tax Act, 1961
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