New Incometax slabs 2026

In the Union Budget 2026, presented on February 1, 2026, Finance Minister Nirmala Sitharaman kept the core personal income tax slabs and rates unchanged for the Financial Year 2026-27 (Assessment Year 2027-28).
The structure remains identical to the reforms introduced in the previous year’s budget. Here is the breakdown:
1. New Tax Regime (Default)
The new regime remains the default option for all taxpayers. It offers lower rates but does not allow most exemptions (like 80C, 80D, or HRA).
| Taxable Income | Tax Rate |
|—|—|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
> Key Benefit: Due to the Section 87A rebate, individuals with a taxable income of up to ₹12 lakh pay Zero tax under this regime. For salaried individuals, including the Standard Deduction of ₹75,000, a gross salary of up to ₹12.75 lakh is effectively tax-free.
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2. Old Tax Regime
The old regime allows for various deductions (HRA, 80C up to ₹1.5L, health insurance, etc.) but has higher tax rates at lower income levels.
| Taxable Income | Tax Rate (Individuals < 60 yrs) |
|—|—|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
* Senior Citizens (60–80 yrs): Exemption limit is ₹3 lakh.
* Super Senior Citizens (80+ yrs): Exemption limit is ₹5 lakh.
Other Notable Tax Changes in Budget 2026
* Revised ITR Filing: You can now file a revised income tax return until March 31 (previously December 31) upon payment of a nominal fee.
* Securities Transaction Tax (STT): Increased on Futures (from 0.02% to 0.05%) and Options (from 0.1% to 0.15%).
* Sovereign Gold Bonds (SGB): Tax exemption on redemption is now restricted to bonds bought in the primary market; secondary market gains are now taxable.
* TCS on Foreign Travel: The rate on overseas tour packages has been reduced to 2% (from 5% or 20%).