Income Tax Slabs In Budget 2026: Know Latest Rates Under Old And New Tax Regimes

Income Tax Slabs 2026: The Finance Minister Nirmala Sitharaman has not announced any changes to the income tax structure in the Budget 2026-27. The Finance Minister made no tweaks to the tax regime, meaning both the Old Tax Regime and the New Tax Regime will continue to be available for taxpayers.

While the new tax regime is the default option while filing the income tax return (ITR), taxpayers can opt to choose the old tax regime if they wish because of multiple deductions and exemptions.

What Is New Tax Regime And What Does It Offer?

The New Tax Regime was made the default regime in Budget 2023-24. Those who wish to opt for the Old Tax Regime for deductions and exemptions have to select it manually. However, a belated ITR, filed after the due date, can only be submitted under the new regime.

Under the new tax regime, individuals earning up to Rs 12 lakh a year are effectively exempt from paying income tax, provided the income qualifies as ‘normal income’. This excludes special-rate incomes such as short-term capital gains (STCG) and long-term capital gains (LTCG).

New tax regime slabs

Rs 0 to Rs 4,00,000: Nil

Rs 4,00,001 to Rs 8,00,000: 5%

Rs 8,00,001 to Rs 12,00,000: 10%

Rs 12,00,001 to Rs 16,00,000: 15%

Rs 16,00,001 to Rs 20,00,000: 20%

Rs 20,00,001 to Rs 24,00,000: 25%

Above Rs 24,00,000: 30%

In Budget 2025-26, the government had extended the full tax rebate to Rs 12 lakh, with the standard deduction of Rs 75,000.

The Old Tax Regime And Slabs

The old tax regime continues to attract taxpayers who can fully utilise exemptions and deductions. These include Section 80C investments up to Rs 1.5 lakh, HRA, LTA, home loan interest under Section 24, health insurance premiums under Section 80D, education loan interest under Section 80E, and a standard deduction of Rs 50,000.

Slab rates under the old regime differ based on age, offering higher basic exemption limits for senior citizens and super senior citizens.

Slabs for individuals below 60 years

Rs 0 to Rs 2,50,000: Nil

Rs 2,50,001 to Rs 5,00,000: 5%

Rs 5,00,001 to Rs 10,00,000: 20%

Above Rs 10,00,000: 30%

Slabs for senior citizens (60 to below 80 years)

Rs 0 to Rs 3,00,000: Nil

Rs 3,00,001 to Rs 5,00,000: 5%

Rs 5,00,001 to Rs 10,00,000: 20%

Above Rs 10,00,000: 30%

Slabs for super senior citizens (80 years and above)

Rs 0 to Rs 5,00,000: Nil

Rs 5,00,001 to Rs 10,00,000: 20%

Above Rs 10,00,000: 30%