How Slab-Based Income Tax Works
Most countries use a progressive income tax system. Instead of one flat rate on all your income, income is divided into bands, or slabs, and each band is taxed at its own rate. Higher slabs carry higher rates, but those rates apply only to the part of your income that falls inside that slab.
Why this calculator lets you edit the slabs
Tax slabs differ between countries and are often revised every budget year. Some countries also offer more than one regime, or different slabs for salaried people, businesses or senior citizens. Rather than guess, this calculator lets you enter the slabs that apply to you, so it works anywhere and stays correct after each budget. The pre-filled slabs are an example only.
How to fill it in
- Find the official slab table for your country and tax year from your tax authority's website.
- Enter the upper limit and rate of each slab in order, from lowest to highest.
- Enter the rate for income above the last slab.
- Add any surcharge or cess that is charged as a percentage of tax.
- Enter deductions you're entitled to, so tax is calculated on taxable income.
What is the maximum income tax slab?
The maximum (highest) slab is the top band of a tax system, and its rate is called the top marginal rate. It applies only to the part of your income above that slab's starting point, not to your whole income. For example, under India's new tax regime for FY 2026-27, the slabs are:
| Taxable income (₹) | Rate |
|---|---|
| Up to 4 lakh | Nil |
| 4 – 8 lakh | 5% |
| 8 – 12 lakh | 10% |
| 12 – 16 lakh | 15% |
| 16 – 20 lakh | 20% |
| 20 – 24 lakh | 25% |
| Above 24 lakh (maximum slab) | 30% |
Under this regime, a rebate makes tax nil for taxable income up to ₹12 lakh, salaried people get a ₹75,000 standard deduction, and a 4% health and education cess is added to the tax. Rules differ in other countries and can change each budget, so always check the official slabs for your country and year.
How much income tax is cut from salary?
When people search for an "income tax cutting slab", they usually want to know how much tax their employer will deduct each month. Employers estimate your yearly tax using your slabs and deductions, then deduct roughly one-twelfth of it from each month's salary (often called TDS or PAYE). This calculator shows that figure as Monthly tax, along with your monthly take-home pay.
Marginal vs effective tax rate
Your marginal rate is the rate on your last unit of income, the highest slab you reach. Your effective rate is total tax divided by total income, and it is always lower than the marginal rate in a slab system. A common misunderstanding is that moving into a higher slab makes you take home less. It doesn't: only the extra income above the limit is taxed at the higher rate.
What this calculator doesn't cover
- Rebates or credits that reduce tax after it is calculated
- Special rates for capital gains, dividends or other income types
- Social security or pension contributions deducted from salary
For filing, always rely on official tools or a qualified tax adviser. Use this calculator to plan and to understand how your tax is built up.
Planning further? You may also find our GST & Sales Tax Calculator, Salary Calculator useful, or explore all calculators.
Further reading: Progressive tax (Wikipedia)