Budget 2026: Any Change in Income Tax Slabs for New and Old Regimes? Check Here
Many taxpayers were keenly watching the Union Budget to see whether income tax slabs for FY 2026–27 would bring fresh relief. However, the Finance Minister has chosen to maintain status quo on tax rates. This means both salaried and non-salaried individuals will continue to be taxed under the existing structure, making it crucial to understand how the new tax regime and old tax regime apply in the coming financial year.
New Tax Regime Slab Rates
Section 87A rebate ensures zero tax on taxable income up to ₹12 lakh
Standard deduction of ₹75,000 available to salaried taxpayers
Simplified structure with lower rates across income levels
For Individuals Below 60 Years
For Senior Citizens (60–79 Years)
For Super Senior Citizens (80 Years and Above)
Surcharge Slabs for FY 2026–27
Important:
Marginal relief ensures that taxpayers do not pay disproportionately higher tax for earning slightly more income beyond a threshold.
For Salaried Taxpayers
For Non-Salaried Taxpayers
Simple Example
This prevents taxpayers from being penalised for marginal income increases.
Latest Income Tax Slabs FY 2026–27: FAQs
With income tax slabs unchanged for FY 2026–27, taxpayers should focus on choosing the right tax regime, understanding rebates, and planning income efficiently. The continued rebate up to ₹12 lakh and capped surcharge under the new tax regime make it particularly attractive for middle-income earners.
Have Income Tax Slabs Changed for FY 2026–27?
Despite expectations of revisions, the Budget did not introduce any changes to income tax slabs. As a result, the income tax slabs applicable in FY 2025–26 will continue unchanged for FY 2026–27. This applies to individuals opting for either the new tax regime or the old tax regime.New Tax Regime Income Tax Slabs for FY 2026–27
Under the new tax regime, tax rates are uniform across all age groups. Whether you are below 60, a senior citizen, or a super senior citizen, the slabs remain the same.New Tax Regime Slab Rates
- Up to ₹4,00,000 – Nil
- ₹4,00,001 to ₹8,00,000 – 5%
- ₹8,00,001 to ₹12,00,000 – 10%
- ₹12,00,001 to ₹16,00,000 – 15%
- ₹16,00,001 to ₹20,00,000 – 20%
- ₹20,00,001 to ₹24,00,000 – 25%
- Above ₹24,00,000 – 30%
Key Benefits Under the New Tax Regime
Section 87A rebate ensures zero tax on taxable income up to ₹12 lakh
Standard deduction of ₹75,000 available to salaried taxpayers
Simplified structure with lower rates across income levels
Old Tax Regime Income Tax Slabs for FY 2026–27
Taxpayers who prefer deductions and exemptions may continue with the old tax regime, which offers age-based slab benefits.For Individuals Below 60 Years
- Up to ₹2.5 lakh – Nil
- ₹2.5 lakh to ₹5 lakh – 5%
- ₹5 lakh to ₹10 lakh – 20%
- Above ₹10 lakh – 30%
For Senior Citizens (60–79 Years)
- Up to ₹3 lakh – Nil
- ₹3 lakh to ₹5 lakh – 5%
- ₹5 lakh to ₹10 lakh – 20%
- Above ₹10 lakh – 30%
For Super Senior Citizens (80 Years and Above)
- Up to ₹5 lakh – Nil
- ₹5 lakh to ₹10 lakh – 20%
- Above ₹10 lakh – 30%
Income Tax Surcharge Rates Explained
A surcharge is an additional tax levied on high-income earners. As per tax experts, it applies once income crosses specific thresholds.Surcharge Slabs for FY 2026–27
| Total Income | New Tax Regime | Old Tax Regime |
|---|---|---|
| Up to ₹50 lakh | Nil | Nil |
| ₹50 lakh – ₹1 crore | 10% | 10% |
| ₹1 crore – ₹2 crore | 15% | 15% |
| ₹2 crore – ₹5 crore | 25% | 25% |
| Above ₹5 crore | 25% | 37% |
Important:
- Under the new tax regime, surcharge is capped at 25%
- Health and Education Cess at 4% is levied on tax plus surcharge
How Marginal Relief Works Under the New Tax Regime
Marginal relief ensures that taxpayers do not pay disproportionately higher tax for earning slightly more income beyond a threshold.
For Salaried Taxpayers
- Zero tax up to ₹12 lakh taxable income due to Section 87A
- With the ₹75,000 standard deduction, marginal relief becomes relevant when gross salary exceeds ₹12.75 lakh
For Non-Salaried Taxpayers
- Since there is no standard deduction, marginal relief applies as soon as taxable income crosses ₹12 lakh
Simple Example
- Taxable income: ₹12,10,000
- Excess income: ₹10,000
- Without relief, tax could exceed ₹10,000
- With marginal relief, tax is restricted to the additional ₹10,000 (plus cess)
This prevents taxpayers from being penalised for marginal income increases.
Latest Income Tax Slabs FY 2026–27: FAQs
1. Did Budget 2026 change income tax slabs ?
No. The Finance Minister did not announce any revision in income tax slabs for FY 2026–27 under either tax regime.2. Will existing tax rates continue next year?
Yes. The income tax slabs applicable in FY 2025–26 will remain valid for FY 2026–27.3. Has the ITR revision deadline been extended?
Yes. Taxpayers can now file revised or belated income tax returns up to March 31, subject to payment of a nominal fee.With income tax slabs unchanged for FY 2026–27, taxpayers should focus on choosing the right tax regime, understanding rebates, and planning income efficiently. The continued rebate up to ₹12 lakh and capped surcharge under the new tax regime make it particularly attractive for middle-income earners.
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