Budget 2026: No Change to Income Tax Slabs
In the Union Budget 2026, Finance minister Nirmala Sitharaman announced that the income tax slabs and rates will remain unchanged for the Financial Year (FY) 2026–27. This means there are no revisions to the key tax thresholds that determine how much individual taxpayers owe — a decision that closely affects millions of salaried and middle‑class earners across India.📊 What Stayed the Same: Income Tax SlabsUnder the New Tax Regime (FY 2026–27):· 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%
Rebate under Section 87A makes total tax zero up to ₹12 lakh taxable income.Old Tax Regime:All slabs and rates from previous years — including age‑based thresholds for senior and super‑senior citizens — also remain unchanged.📍 Why Taxpayers Expected ChangeAfter major tax reform in Budget 2025, many taxpayers hoped for further slab increases — especially in exemption limits — to reduce tax outgo for middle‑class families. However, the government chose stability over additional cuts this year.💡 Impact on Individual Taxpayers🧾 1. No Immediate Tax Cuts· Keeping slabs the same means tax liabilities will not automatically fall for next year’s earnings unless your income drops.· Taxpayers will continue paying tax based on current thresholds and rates.💼 2. Tax Planning Remains ImportantWithout slab changes, individuals should:· Use existing deductions under Sections like 80C, 80D (for insurance), and 80E (for education loan interest).· Choose between the old or new tax regime each year based on what saves you more tax.🧑💻 3. Standard Deduction & Rebates Unchanged· The standard deduction and rebate benefits (such as those under Section 87A) continue, but they don’t change your tax brackets.🗓 4. Fiscal Stability over Tax ReliefAnalysts say the government favoured predictability and fiscal discipline, keeping revenue stable rather than offering further blanket tax cuts. This helps support spending on infrastructure and social programmes without widening the budget deficit.🛠 Other Tax‑Related Measures in Budget 2026While slabs stayed the same, the budget introduced several changes that can affect taxpayers’ finances:✅ New Income Tax Act 2025: A reformed tax law coming into force from April 1, 2026, aiming to simplify compliance.
✅ Extended ITR Revision Deadline: You can revise your income tax return up to March 31 (instead of december 31) on payment of a nominal fee.
✅ Reduced tcs on Foreign Payments: tcs under the Liberalised Remittance Scheme (LRS) for education and medical has been cut to 2%.
✅ Rationalised Compliance Measures: Simplified forms and automated certificates to reduce hassles for small taxpayers.These changes offer relief and compliance ease even without lowering tax slabs.📌 Who Benefits — and Who Doesn’tBenefits:✔ Taxpayers with stable incomes won’t see surprise hikes
✔ Predictable planning for investments and deductions
✔ Relief from compliance burdens and easier return filingDrawbacks:✘ No additional tax savings via higher exemption limits
✘ Middle‑income households hoping for more relief may be disappointedSummary· The Budget 2026 kept income tax slabs unchanged for the coming year, continuing the structure already in place.· This means no automatic tax cuts but offers a steady framework for planning.· Other reforms focus on taxpayer convenience, compliance, and targeted relief like reduced tcs rates and extended deadlines. Disclaimer:The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.
Rebate under Section 87A makes total tax zero up to ₹12 lakh taxable income.Old Tax Regime:All slabs and rates from previous years — including age‑based thresholds for senior and super‑senior citizens — also remain unchanged.📍 Why Taxpayers Expected ChangeAfter major tax reform in Budget 2025, many taxpayers hoped for further slab increases — especially in exemption limits — to reduce tax outgo for middle‑class families. However, the government chose stability over additional cuts this year.💡 Impact on Individual Taxpayers🧾 1. No Immediate Tax Cuts· Keeping slabs the same means tax liabilities will not automatically fall for next year’s earnings unless your income drops.· Taxpayers will continue paying tax based on current thresholds and rates.💼 2. Tax Planning Remains ImportantWithout slab changes, individuals should:· Use existing deductions under Sections like 80C, 80D (for insurance), and 80E (for education loan interest).· Choose between the old or new tax regime each year based on what saves you more tax.🧑💻 3. Standard Deduction & Rebates Unchanged· The standard deduction and rebate benefits (such as those under Section 87A) continue, but they don’t change your tax brackets.🗓 4. Fiscal Stability over Tax ReliefAnalysts say the government favoured predictability and fiscal discipline, keeping revenue stable rather than offering further blanket tax cuts. This helps support spending on infrastructure and social programmes without widening the budget deficit.🛠 Other Tax‑Related Measures in Budget 2026While slabs stayed the same, the budget introduced several changes that can affect taxpayers’ finances:✅ New Income Tax Act 2025: A reformed tax law coming into force from April 1, 2026, aiming to simplify compliance.
✅ Extended ITR Revision Deadline: You can revise your income tax return up to March 31 (instead of december 31) on payment of a nominal fee.
✅ Reduced tcs on Foreign Payments: tcs under the Liberalised Remittance Scheme (LRS) for education and medical has been cut to 2%.
✅ Rationalised Compliance Measures: Simplified forms and automated certificates to reduce hassles for small taxpayers.These changes offer relief and compliance ease even without lowering tax slabs.📌 Who Benefits — and Who Doesn’tBenefits:✔ Taxpayers with stable incomes won’t see surprise hikes
✔ Predictable planning for investments and deductions
✔ Relief from compliance burdens and easier return filingDrawbacks:✘ No additional tax savings via higher exemption limits
✘ Middle‑income households hoping for more relief may be disappointedSummary· The Budget 2026 kept income tax slabs unchanged for the coming year, continuing the structure already in place.· This means no automatic tax cuts but offers a steady framework for planning.· Other reforms focus on taxpayer convenience, compliance, and targeted relief like reduced tcs rates and extended deadlines. Disclaimer:The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.