Budget 2026 Shocker: No Changes to Income Tax Slabs for FY 2026-27 – What It Means for You

Latest income tax slabs FY 2026-27 after Budget 2026? Check for new, old regime

Well, it’s official. After months of speculation and hope for further relief, the Union Budget 2026, presented on February 1, 2026, has confirmed what many experts had predicted: there are no changes to the income tax slabs for FY 2026-27. That’s right—whether you’re filing under the new or the old tax regime, the rules of the game remain exactly as they were for the last financial year [[1]].

But before you dismiss this as just another status-quo announcement, there’s a lot to unpack. The stability in the tax structure is actually a strategic move, building on the massive overhaul introduced in Budget 2025. So, what does this mean for your wallet? And which tax regime should you pick for the upcoming year? Let’s dive deep.

Table of Contents

No Change in Income Tax Slabs FY 2026-27: The Official Word

The government has decided to maintain continuity in its personal taxation policy. Following the significant reforms in the previous budget, Finance Minister Nirmala Sitharaman chose not to tinker with the existing income tax slabs FY 2026-27 [[7]]. This provides much-needed predictability for taxpayers who have already adjusted their financial planning based on the new structure. The message is clear: the current framework is working, and the focus is now on other economic priorities.

Recap of the New Tax Regime Slabs (FY 2025-26 Onwards)

Since the new regime is now the default option, it’s crucial to remember the revised slabs that were introduced last year and will continue to apply for FY 2026-27. These slabs are designed to be simpler and offer lower rates for most middle-income earners.

Taxable Income Tax Rate
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%

Source: Ministry of Finance, Government of India [[28]].

The Old Tax Regime Remains Unchanged

For those who prefer the traditional route with its various deductions and exemptions, the old tax regime is still an option. Its slabs have remained untouched for several years and will continue to be the same for FY 2026-27.

  • 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%

Remember, to opt for the old regime, you must explicitly choose it while filing your ITR. The new regime is now the default setting [[3]].

Key Benefits to Remember: Standard Deduction and Rebate

Two major benefits make the new regime even more attractive for salaried individuals:

  1. Standard Deduction: A standard deduction of ₹75,000 is available under the new tax regime for salaried employees and pensioners. This is a significant jump from the ₹50,000 available under the old regime [[10]]. This deduction is applied directly to your gross salary, reducing your taxable income right off the bat.
  2. Section 87A Rebate: If your total taxable income is up to ₹7,00,000, you pay zero tax under the new regime thanks to the rebate under Section 87A. In effect, with the basic exemption limit and the rebate combined, your first ₹7 lakh of income is tax-free [[5]].

New vs. Old Tax Regime: Which One is Right for You?

The million-dollar question remains: which regime saves you more money? There’s no one-size-fits-all answer. It depends entirely on your ability to claim deductions.

Choose the New Regime if:

  • You have a simple salary structure with few investments in tax-saving instruments like PPF, ELSS, or NSC.
  • Your total deductions (like HRA, 80C, 80D) are less than ₹3.75 lakhs. For most salaried professionals without a home loan, this is often the case.

Choose the Old Regime if:

  • You are a homeowner claiming HRA or home loan interest (Section 24).
  • You make substantial investments in Section 80C instruments (up to ₹1.5 lakh) and health insurance (Section 80D).
  • Your total eligible deductions exceed ₹3.75 lakhs.

The best way to decide is to calculate your tax liability under both regimes using a reliable online calculator or by consulting a tax advisor. [INTERNAL_LINK:how-to-choose-between-new-and-old-tax-regime] provides a step-by-step guide.

Conclusion: Planning Your Taxes for FY 2026-27

While the lack of changes in the income tax slabs FY 2026-27 might seem underwhelming, it’s a sign of a stable and maturing tax policy. The government has given you a powerful, simplified system in the new regime and is letting it settle. Your job now is to understand it, leverage the benefits like the higher standard deduction, and make an informed choice between the two regimes. Don’t just go with the default; take a few minutes to run the numbers—it could save you thousands!

Sources

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