1. No Change in Income Tax Slabs for FY 2026-27

One of the biggest takeaways from the Union Budget 2026 presented by Finance minister Nirmala Sitharaman on 1 february 2026 is that there were no changes to the income tax slab rates or thresholds for individuals, both under the old and new tax regimes for the Financial Year 2026-27 (Assessment Year 2027-28).

This means taxpayers will continue paying tax at the same rates they were subject to in the previous year — despite expectations of relief or higher exemption limits.

New Tax Regime Slabs (unchanged)

For FY 2026-27, the new tax regime continues with these tiers:

• ₹0 – ₹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%

Under the new regime, a tax rebate under Section 87A makes income up to ₹12 lakh effectively tax-free, and salaried taxpayers also get a standard deduction of ₹75,000 — meaning some taxpayers won’t pay tax up to around ₹12.75 lakh of total income.

Old Tax Regime Slabs

The old regime’s slab thresholds also remain the same, with different exemption levels for:

• Below 60 years
• Senior citizens (60–79 years)
• Super senior citizens (80 + years)

2. Why Slabs Were Not Adjusted

The government chose continuity over change on personal income tax. Policymakers indicated that with major reforms already introduced in the previous Budget — especially a more generous new tax regime in 2025 — there was no need to alter the structure mid-course. Instead, the focus was on simplification and compliance ease.

Keeping the tax slabs unchanged provides predictability for taxpayers and helps stabilise revenue projections for the government.

3. What Did Change in Income Tax Rules

While the slabs themselves remain the same, the Budget did bring several important tax-related changes that will affect how you file and pay tax:

✔ New Income Tax Act Effective april 1, 2026

A revamped Income Tax Act, 2025 will come into force from 1 april 2026. It aims to simplify provisions, reduce disputes, and make compliance easier.

✔ Extended Return Filing Deadlines

The deadline for filing revised returns has been extended from 31 december to 31 March (with a nominal fee). This offers more time for taxpayers to correct mistakes or claim deductions.

✔ Reduced Tax Collected at Source (TCS)

TCS rates have been lowered on overseas tour packages and education/medical remittances abroad — potentially reducing upfront tax outflows for these transactions.

✔ NRI Compliance Ease

Tax rules for non-resident indians (NRIs) have been simplified in several areas such as property sales and foreign asset disclosures.

4. What This Means for You

For Salaried and Middle-Class Taxpayers

• You won’t see immediate tax rate relief just because the slabs didn’t change.
• However, existing benefits such as the Section 87A rebate and standard deduction still apply — so many taxpayers pay little or no tax up to a certain income level.

Old vs New Regime Choice Still Available

Taxpayers can choose annually between the old and new regimes depending on which is more beneficial — a flexibility that continues.

Compliance Gets Easier

Simplified filing forms, staggered deadlines, and clearer rules may reduce errors and hassles when submitting returns next year.

5. Bottom Line: Stability Not Slab Cuts

While many hoped for higher exemptions or slab restructuring in Budget 2026, the government opted to retain the current tax structure and focus on broader reforms and compliance enhancements instead.

Taxpayers should plan their financial moves with these unchanged slabs in mind — while also benefiting from procedural support and the upcoming new Income Tax Act.

 

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