The “tax at normal rates on Part B-TI” line in your ITR shows the tax computed using India’s progressive slab rates on the portion of your total income (from Part B-TI) that isn’t taxed at any special fixed rate. Part B-TI is where your return consolidates income from every head and subtracts Chapter VI-A deductions to arrive at total income. Part B-TTI then takes that figure, pulls out anything taxed at a flat rate (capital gains, lottery winnings, virtual digital asset income), and runs the remainder through the slab structure. That slab-rate result is what this line reports.
How Part B-TI Feeds the Normal-Rate Calculation
Part B-TI is the consolidating section of ITR-2 and ITR-3. It draws from Schedule S for salary, Schedule HP for house property, Schedule BP for business income, and other head-wise schedules, then subtracts Chapter VI-A deductions such as those under Sections 80C and 80D. The output is a single total income figure, rounded to the nearest ₹10.
Part B-TTI is where the tax is actually computed. It splits the total income into two streams. Income taxed at special flat percentages goes through its own calculation. Everything else stays in the normal-rate bucket and faces the slab structure. The line you’re looking at is simply telling you which figure from Part B-TI is being used as the starting point for that slab-rate calculation. The tax figure itself is also rounded to the nearest ₹10.
What Sits in the Normal-Rate Bucket
The income taxed at normal rates comes from your everyday earnings. Salary flows in after the standard deduction — ₹75,000 under the new regime and ₹50,000 under the old regime for AY 2026-27.1The Economic Times. New Income Tax Slab and Rates – FY 2025-26 (AY 2026-27) House property income enters after the 30 percent standard deduction on net annual value under Section 24 and any home loan interest deduction.2Income Tax Department. House Property Business and professional income from Schedule BP joins in, along with interest on savings accounts and fixed deposits.
All of these streams are added up, reduced by allowable deductions, and only the residual gets progressive taxation. That residual is what benefits from the basic exemption limit and graduated brackets. Special-rate income is taxed at its flat percentage no matter how large or small your overall income is.
Slab Rates Applied to the Normal-Rate Income
Which slab structure applies depends on your regime choice.
New Tax Regime for AY 2026-27
The new regime under Section 115BAC is the default for individuals and HUFs.3Income Tax Department. New vs Old Tax Regime FAQs If you don’t actively opt out before your original filing deadline, this is what applies:
- Up to ₹4,00,000: nil
- ₹4,00,001 to ₹8,00,000: 5 percent
- ₹8,00,001 to ₹12,00,000: 10 percent
- ₹12,00,001 to ₹16,00,000: 15 percent
- ₹16,00,001 to ₹20,00,000: 20 percent
- ₹20,00,001 to ₹24,00,000: 25 percent
- Above ₹24,00,000: 30 percent
These rates are identical for all age groups. The new regime does not offer the age-based exemption tiers that senior and super-senior citizens get under the old regime.4Income Tax Department. Salaried Individuals for AY 2026-27
Old Tax Regime
If you opt out of Section 115BAC before the filing deadline, the old regime’s three-bracket structure applies. The basic exemption depends on age:
- Below 60 years: ₹2,50,000 exempt
- 60 to 79 years: ₹3,00,000 exempt
- 80 years and above: ₹5,00,000 exempt
Above the exemption, income is taxed at 5 percent up to ₹5,00,000, 20 percent from ₹5,00,001 to ₹10,00,000, and 30 percent above ₹10,00,000. The old regime allows the full range of Chapter VI-A deductions and exemptions (HRA, LTA, 80C, 80D, and others), which is why filers with heavy deductions may still prefer it.
What Doesn’t Go Through the Normal-Rate Line
Several categories are pulled out of Part B-TI’s total income and taxed separately. They never touch the slab calculation.
Short-term capital gains on listed equity shares and equity-oriented mutual funds where Securities Transaction Tax was paid are taxed at 20 percent under Section 111A. That rate was raised from 15 percent for transfers on or after July 23, 2024.5Income Tax Department. Capital Gain Long-term capital gains on the same instruments face 12.5 percent under Section 112A, up from 10 percent, with the first ₹1,25,000 of such gains exempt each year.6Income Tax Department. Income-tax Act 1961 – Section 112A Other capital gains, on property, gold, unlisted shares, or debt funds, follow separate rules based on holding period and asset type, but all capital gains are carved out of the normal-rate bucket.
Winnings from lotteries, crossword puzzles, horse races, card games, gambling, and betting are taxed at a flat 30 percent under Section 115BB with no deductions allowed.7Indian Kanoon. Income Tax Act 1961 – Section 115BB Even a filer whose total income sits below the basic exemption limit pays 30 percent on these winnings.
Income from transferring virtual digital assets — cryptocurrency, NFTs, and similar tokens — is taxed at a flat 30 percent under Section 115BBH. No deduction is allowed beyond the cost of acquisition, and losses cannot be set off against other income or carried forward.8Income Tax Department. Income-tax Act 1961 – Section 115BBH
Section 87A Rebate on the Normal-Rate Tax
Once the slab-rate tax is computed, the Section 87A rebate is applied before net tax payable. It reduces only the tax on income taxed at normal slab rates. It does not touch tax on capital gains, lottery winnings, or other special-rate items.
Under the new regime, resident individuals with total income up to ₹12,00,000 get a rebate of up to ₹60,000 for AY 2026-27. Salaried filers earning up to ₹12,75,000 can end up with zero tax liability once the ₹75,000 standard deduction is combined with the rebate. If total income slightly exceeds ₹12,00,000, marginal relief keeps the extra tax from exceeding the extra income above the threshold.
Under the old regime, resident individuals with total income up to ₹5,00,000 get a rebate of up to ₹12,500.
Surcharge and Cess Sit on Top
The slab-rate tax isn’t the final figure. Surcharge kicks in when total income exceeds ₹50,00,000:
- ₹50,00,001 to ₹1,00,00,000: 10 percent surcharge on tax
- ₹1,00,00,001 to ₹2,00,00,000: 15 percent
- ₹2,00,00,001 to ₹5,00,00,000: 25 percent
- Above ₹5,00,00,000: 37 percent under the old regime, capped at 25 percent under the new regime
The enhanced 25 and 37 percent surcharge rates do not apply to income taxed under Sections 111A, 112, 112A, or to dividend income. For those, the maximum surcharge is 15 percent.4Income Tax Department. Salaried Individuals for AY 2026-27
Health and Education Cess of 4 percent is then charged on income tax plus surcharge. It applies to every filer regardless of income level or regime.
Check the Part B-TI Figure Before You Rely on the Tax Number
Because the normal-rate tax is computed on the Part B-TI total, a wrong figure there flows straight through to your tax number. The Income Tax Department already holds much of your income data through Form 16 from your employer, Form 26AS aggregating all TDS and TCS, and the Annual Information Statement (AIS) with its processed version, the Taxpayer Information Summary (TIS). The TIS lists interest from banks, dividends, mutual fund transactions, property sales, and more, and is used to auto-populate parts of your return.
Before filing, pull your AIS from the income tax portal and check each line against Schedule S, Schedule HP, and the other schedules. Savings account and fixed deposit interest deserve extra attention, since banks report those directly. Any gap between the department’s records and your schedules feeds into Part B-TI and can trigger a notice.
Chapter VI-A deductions reduce Part B-TI’s total income and therefore the normal-rate tax in Part B-TTI. Keep your PPF receipts, insurance premium certificates, and health insurance statements organized. Most Chapter VI-A deductions are unavailable under the new regime, so make sure your regime choice and claimed deductions line up.9Income Tax Department. Deductions