Many taxpayers remain confused about tax changes for FY 2026-27. Moreover, a new income tax law will start from April 1, 2026. Consequently, people expect possible changes in tax slabs.
New Law Explained Simply
The government will implement Income-tax Act, 2025 from April 1, 2026. Furthermore, Finance Minister Nirmala Sitharaman announced this during Budget 2026. Additionally, the law applies to income earned in FY 2026-27.
However, the government has redesigned the tax system structure. Therefore, many people assumed slab changes.
Old Tax Regime Slabs
Under the old tax system, income up to ₹2.5 lakh remains tax-free. Moreover, income between ₹2.5 lakh and ₹5 lakh attracts 5 percent tax.
Additionally, income from ₹5 lakh to ₹10 lakh faces 20 percent tax. Furthermore, income above ₹10 lakh attracts 30 percent tax.
New Tax Regime Slabs
The new tax system continues for FY 2026-27 without changes. Moreover, income up to ₹4 lakh remains tax-free. Additionally, ₹4 lakh to ₹8 lakh faces 5 percent tax.
Income between ₹8 lakh and ₹12 lakh attracts 10 percent tax. Furthermore, ₹12 lakh to ₹16 lakh falls under 15 percent tax.
Additionally, ₹16 lakh to ₹20 lakh attracts 20 percent tax. Moreover, ₹20 lakh to ₹24 lakh faces 25 percent tax.
Income above ₹24 lakh continues under 30 percent tax. Therefore, the structure remains unchanged.
Key Features Of New Tax System
The new tax regime now acts as the default option. Moreover, taxpayers can still choose the old system while filing returns.
However, this option remains available only for those without business income. Additionally, Section 87A continues to offer tax relief up to ₹12 lakh income.
Therefore, eligible taxpayers may pay zero tax within this limit.
No Change In Tax Slabs
The government has not changed tax slabs in Budget 2026. Moreover, Income-tax Act, 2025 also keeps the same structure.
Therefore, taxpayers will follow the existing slab rates in FY 2026-27.
