Budget 2026: Know before the budget… how much tax in which regime, new or old?

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Know the current tax slab before leaving

Budget 2026: The opening of the country’s accounts has started in the Parliament. Finance Minister Nirmala Sitharaman is presenting the general budget for the financial year 2026-27 in the Lok Sabha today at 11 am. There is only one question in the mind of every taxpayer. Will there be any tax exemption this time? When Finance Minister Nirmala Sitharaman presents the budget, the eyes of the working class and business class across the country will be fixed on the income tax slabs. However, if the government does not make any major changes in the slabs, your financial planning will remain based on the existing rules. Currently the new tax regime is applicable as the ‘default’ option, but the option to opt for the old regime is still open.

Is the old tax regime still a profitable deal?

The old tax system still remains a favorite for those who like to save tax through investments and deductions. If we understand the current mathematics of this regime, annual income up to Rs 2.50 lakh is completely tax-free. If we look at the rates after this, 5 percent tax is applicable on income between Rs 2,50,001 to Rs 7 lakh.

This slab changes slightly for the middle income group. If your income is between Rs 7 lakh and Rs 10 lakh, you will have to pay tax at the rate of 10 percent. At the same time, there is a provision of 15 percent tax on income of Rs 10 to 12 lakh and 20 percent tax on income of Rs 12 to 15 lakh. Taxpayers who earn more than Rs 15 lakh annually have to pay 30 percent of their income as tax. The biggest attraction of this regime is the deductions like 80C, 80D and home loan, which make it better than the new system in many respects.

  1. For income up to Rs 2,50,000: Nil
  2. For income between Rs 2,50,001 to Rs 7,00,000: 5%
  3. For income between Rs 7,00,001 to Rs 10,00,000: 10%
  4. For income between Rs 10,00,001 to Rs 12,00,000: 15%
  5. For income between Rs 12,00,001 to Rs 15,00,000: 20%
  6. For income above Rs 15,00,000: 30%

New tax regime, less paperwork, new rates

The government is continuously promoting the new tax regime and many changes have been made to make it attractive. In the new system, the basic exemption limit has been increased to Rs 3 lakh. That means you do not have to pay even a single rupee tax on earnings up to Rs 3 lakh. After this, 5 percent tax is levied on income between Rs 3 to 7 lakh and 10 percent tax on income between Rs 7 to 10 lakh.

As the income increases, the slab also increases. The rate has been fixed at 15 percent for income of Rs 10 to 12 lakh and 20 percent for people falling in the slab of Rs 12 to 15 lakh. Like the old system, here too 30 percent tax is applicable on earnings above Rs 15 lakh. This system is considered better for those people who do not want to get into the hassles of investment documents and CA.

  1. For income up to Rs 3,00,000: Nil
  2. For income between Rs 3,00,001 to Rs 7,00,000: 5%
  3. For income between Rs 7,00,001 to Rs 10,00,000: 10%
  4. For income between Rs 10,00,001 to Rs 12,00,000: 15%
  5. For income between Rs 12,00,001 to Rs 15,00,000: 20%
  6. On income above Rs 15,00,000: 30%

Will the old system end?

The way changes have been made in the new tax regime in the last few years, it indicates that the government intends to gradually shift the taxpayers towards the new system. After the changes in the new system, under certain circumstances, there is a situation of non-taxation of income up to Rs 12.75 lakh. This is why the question remains constant in the minds of employed people whether the old tax system will be completely abolished in the future?

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