Budget 2026: No change in income tax slab this year. Here are the details of new and old tax regimes

When it comes to the budget, the only thing that the middle class or the salaried taxpayers look forward to is the income tax rebate. Finance Minister Nirmala Sitharaman, while presenting her ninth straight Union Budget 2026, kept the tax slab rates unchanged for both new and old income tax regimes.

New tax regime (Effective April 1, 2026)

Income up to ₹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%

Old income tax regime (Effective April 1, 2026)

Under the old tax regime, taxpayers can still claim several deductions, including investments under Section 80C, home loan interest, and health insurance premiums. However, the higher slab rates can make this option less appealing for those with fewer deductions.

The old tax system retains its familiar slab structure:

Income up to ₹2.5 lakh: Nil

₹2.5–5 lakh: 5%

₹5–10 lakh: 20%

Above ₹10 lakh: 30%

"Budget 2026-27 has clearly chosen stability on personal taxation. After last year’s major reset under the new tax regime, where tax liability was effectively reduced to zero up to ₹12 lakh of taxable income through the enhanced rebate under Section 87A, and for many salaried taxpayers up to about ₹12.75 lakh after standard deduction, this year there is no further change in slabs or rates. The message is continuity, while simplification and compliance ease become the real story," said Pratik Vaidya, Managing Director, Karma Management Global Consultancy Pvt. Ltd.

The middle class was eagerly awaiting some income tax reforms that would enable them to curtail their tax outgo.

The FY27 Budget comes against a complex backdrop. While domestic demand has held up and inflation has moderated from recent highs, global uncertainties, including geopolitical tensions, volatile commodity prices and uneven monetary easing by major central banks, continue to cloud the outlook.