Budget 2026: Here’s a recap of income tax slabs announced last year under old and new regimes

Budget 2026: India is gearing up for the Union Budget 2026, which will be presented on a Sunday, February 1. Ahead of the big announcement, Union Finance Minister Nirmala Sitharaman has begun pre-Budget consultations with states and Union Territories, with several key suggestions placed before the Centre for consideration in the Budget FY27.

As Finance Minister Sitharaman prepares to present her ninth consecutive Union Budget, here is a recap of the income tax slabs under the old and new tax regimes that were announced in Budget 2025.

New tax regime

To make the new tax regime more attractive, the government announced concessional tax rates with wider slabs, though most deductions are not allowed under this system.

Under the revised structure, individuals earning up to ₹12 lakh annually do not have to pay any income tax.

₹0–4 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: 30%

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In addition, a standard deduction of ₹75,000 is available under the new regime. As a result, salaried taxpayers with income up to ₹12.75 lakh before deduction do not have to pay any income tax.

Old tax regime

The old tax regime continues with its traditional slab structure:

Up to ₹2.5 lakh: Nil

₹2.5–5 lakh: 5%

₹5–10 lakh: 20%

Above ₹10 lakh: 30%

While this regime allows multiple deductions such as Section 80C investments, home loan interest, and health insurance premiums, the higher tax rates often make it less attractive for taxpayers with limited deductions.