In every Budget presentation, the primary focus of every individual taxpayer is on income tax slabs. The Budget 2026 was no different. When Finance Minister Nirmala Sitharaman presented the Budget 2026, many taxpayers were expecting her to raise income tax slabs that can help them save more tax. But did she raise the tax limit for the Financial Year 2026-27?
The Finance Minister didn’t change income tax slabs for the old tax regime and the new tax regime for the Financial Year 2026-27 (Tax Year 2027-28).
This means taxpayers will continue to be taxed based on the same slab structure that was applicable earlier, with no revision in rates or income thresholds.
New tax regime income tax slab for FY 2026-27
Under the new tax regime, there is no age-based differentiation as slabs are the same for all. However, in the old tax regime, income tax slabs are different for individual taxpayers below 60 years of age, senior citizens (from 60 to below 80 years of age) and super senior citizens (80 years and above).
New tax regime income tax slabs
| 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% |
In the new tax regime, a key benefit is that income up to Rs 12 lakh a financial year is tax-free after a tax rebate of up to Rs 60,000 under Section 87A of the Income Tax Act, 1961. For salaried taxpayers, a standard deduction of Rs 75,000 is also available which makes their salary up to Rs 12.75 lakh tax-free.
Income tax slabs under old tax regime
1) For taxpayers below 60 years
| Taxable Income | Tax Rate |
| Up to Rs 2,50,000 | Nil |
| Rs 2,50,001 – Rs 5,00,000 | 5% |
| Rs 5,00,001 – Rs 10,00,000 | 20% |
| Above Rs 10,00,000 | 30% |
2) For taxpayers of age 60 years to below 80 years (senior citizens)
| Taxable Income | Tax Rate |
| Up to Rs 3,00,000 | Nil |
| Rs 3,00,001 – Rs 5,00,000 | 5% |
| Rs 5,00,001 – Rs 10,00,000 | 20% |
| Above Rs 10,00,000 | 30% |
3) For taxpayers of age 80 years and above (super senior citizens)
| Taxable Income | Tax Rate |
| Up to Rs 5,00,000 | Nil |
| Rs 5,00,001 – Rs 10,00,000 | 20% |
| Above Rs 10,00,000 | 30% |
Here is a table listing the surcharge for various income levels –
| Total Income | Surcharge – New Regime | Surcharge – Old Regime |
| Up to Rs 50 lakh | Nil | Nil |
| Rs 50 lakh – Rs 1 crore | 10% | 10% |
| Rs 1 crore – Rs 2 crore | 15% | 15% |
| Rs 2 crore – Rs 5 crore | 25% | 25% |
| Above ₹Rs 5 crore | 25% | 37% |
Under the new tax regime, surcharge is capped at 25%, even for very high-income taxpayers. In contrast, the old tax regime continues to attract a higher surcharge of 37% for income above Rs 5 crore.
Health and education cess
In both tax regimes, health and education cess at 4% is levied on the total tax payable after adding the applicable surcharge.
What this means for taxpayers
Since tax slabs remain unchanged, taxpayers will need to continue evaluating which regime- old or new- works better for them based on their income level, deductions, exemptions and long-term financial planning.
For FY 2026–27, however, the basic tax structure remains the same, giving taxpayers continuity rather than surprise changes.
