Tax planning is one of the most important aspects of financial management, especially for professionals, entrepreneurs, and consultants. With every Union Budget, taxpayers eagerly look for changes in income tax slabs and rebates that could impact their annual liability.
The Union Budget 2025 was a landmark year, introducing significant relief under the new tax regime. The Budget 2026, however, has chosen stability—keeping the slabs unchanged for FY 2026–27. Let’s break down the comparison.
New Tax Regime (Default)
| Income Range | FY 2025–26 Slab | FY 2026–27 Slab | Remarks |
| Up to ₹4,00,000 | Nil | Nil | Basic Exemption raised in 2025 |
| ₹4,00,001 – ₹8,00,000 | 5% | 5% | Applies on income above ₹4 lakh |
| ₹8,00,001 – ₹12,00,000 | 10% | 10% | Effective zero-tax up to ₹12 lakh due to rebate |
| ₹12,00,001 – ₹16,00,000 | 15% | 15% | No Change |
| ₹16,00,001 – ₹20,00,000 | 20% | 20% | No Change |
| ₹20,00,001 – ₹24,00,000 | 25% | 25% | No Change |
| Above ₹24,00,000 | 30% | 30% | Maximum Slab Rate |
Rebate under Section 87A:
- FY 2025–26: Raised to ₹60,000, making income up to ₹12 lakh tax-free.
- FY 2026–27: Unchanged.
Standard Deduction:
- ₹75,000 (unchanged).
Key Takeaways
- Budget 2025–26 was the reform year: Higher exemption limits and expanded rebate made the new regime more attractive.
- Budget 2026–27 is about continuity: No new changes, giving taxpayers stability in planning.
- Choice remains: Taxpayers can still opt between the new regime (simpler, lower rates, fewer deductions) and the old regime (higher rates, but with exemptions/deductions).
Final Word For consultants, entrepreneurs, and salaried professionals, the unchanged slabs mean your tax planning strategy for FY 2026–27 can continue on the same assumptions as last year. The new regime remains the default, but the old regime is available for those who benefit from deductions like housing loan interest, insurance premiums, or investments under Section 80C.