Budget 2026 Income Tax Slab: No change in income tax slab, know the tax slab for FY 2026-27

Budget 2026 Income Tax Slab: The government has not made any changes in the income tax slab. The rates of both the new and old tax systems have been kept the same as before. Finance Minister Nirmala Sitharaman presented the budget on 1 February 2026, but no change was made in the income tax rates.

In the budget, the Finance Minister has made two important announcements to direct tax. The last date for filing revised ITR has been extended from 31 December to 31 March. Apart from this, TCS and TDS rates have been reduced in some cases. The income tax slabs for the financial year 2026-27 are as follows.

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Budget 2026 Income Tax Slab

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New tax system for financial year 2026-27

Income Slab (in Rs) Tax Rate

0 to 4,00,000 – zero

4,00,001 to 8,00,000 – 5 percent

8,00,001 to 12,00,000 – 10 percent

12,00,001 to 16,00,000 – 15 percent

16,00,001 to 20,00,000 – 20 percent

20,00,001 to 24,00,000 – 25 percent

Above Rs 24,00,000 – 30 percent

No tax will have to be paid on income up to Rs 4 lakh. Complete tax exemption will be available under section 87A on income up to Rs 12 lakh.

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Old tax system for financial year 2026-27

In the old tax system, deductions like Section 80C, 80D and home loan interest were available. The tax exemption limit for senior citizens is also higher. For this reason many taxpayers still prefer the old system.

The tax slabs under the old tax system are as follows.

Income Slab (in Rs) – Tax Rate

Up to Rs 2,50,000 – No tax

2,50,001 to 5,00,000 – 5 percent

5,00,001 to 10,00,000 – 20 percent

More than Rs 10,00,000 – 30 percent

Before Budget 2026, there was discussion that the government may gradually abolish the old tax system. At present no official announcement has been made on this. It is believed that if there are changes, they will be implemented in a phased manner.

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