The government has kept income tax rates unchanged for the financial year 2026-27. Finance Minister Nirmala Sitharaman presented the Union Budget 2026 on February 1, 2026, but there were no revisions to either the new or old tax regime rates. While there were no changes in slabs, the budget included key announcements such as extending the deadline for revised ITR filing from December 31 to March 31, and reducing TCS and TDS rates in certain cases.
Here’s a detailed look at the tax structure for FY 2026-27.
New Tax Regime Slabs for FY 2026-27
| Annual Income (₹) | Tax Rate |
|---|---|
| 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 tax regime, individuals earning up to ₹12 lakh can also avail the full tax rebate under Section 87A, effectively reducing their tax liability to zero.
Old Tax Regime Slabs for FY 2026-27
The old regime continues to offer exemptions such as Section 80C deductions, 80D for health insurance, and home loan interest benefits. Senior citizens enjoy a higher exemption limit, which makes the old system still preferred by some taxpayers.
| Annual Income (₹) | Tax Rate |
|---|---|
| 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% |
Experts note that while there has been no official announcement to phase out the old regime, discussions on gradually simplifying the tax system continue. For now, taxpayers have the choice to continue with the old system or opt for the new regime, depending on their deductions and exemptions.
Key Takeaways
-
No change in tax rates for both new and old regimes in FY 2026-27.
-
Revised ITR filing deadline extended to March 31, 2026.
-
TCS and TDS rates reduced in select areas.
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New regime offers simplicity and 87A rebate for income up to ₹12 lakh.
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Old regime remains beneficial for those claiming deductions under sections 80C, 80D, or home loan interest.
In conclusion, taxpayers can plan their finances accordingly, choosing between the new regime for simplicity or the old regime for maximum exemptions, without worrying about changes in slab rates for FY 2026-27.
