Many taxpayers are confused about whether their income tax slabs will change in the coming financial year (FY 2026-27) or not, because the Income-tax Act, 2025 is going to come into force from April 1, 2026. In this new law, the tax system has been designed in a new way, due to which people feel that maybe the slabs of the old and new tax system have also changed.
Finance Minister Nirmala Sitharaman had told in Budget 2026 that Income-tax Act, 2025 will come into effect from April 1, 2026. The tax slabs given in this will be applicable on the earnings of FY 2026-27. Now let us understand in simple language whether the slabs have been changed or not.
Old Tax Regime Slabs
- Rs 0 to Rs 2.5 lakh: 0% tax
- Rs 2.5 lakh to Rs 5 lakh: 5%
- Rs 5 lakh to Rs 10 lakh: 20%
- Above Rs 10 lakh: 30%
New Tax Regime for FY 2026-27
- Rs 0 to Rs 4 lakh: 0%
- Rs 4 lakh to Rs 8 lakh: 5%
- Rs 8 lakh to Rs 12 lakh: 10%
- Rs 12 lakh to Rs 16 lakh: 15%
- Rs 16 lakh to Rs 20 lakh: 20%
- Rs 20 lakh to Rs 24 lakh: 25%
- Above Rs 24 lakh: 30%
Special features of the new tax system
This is now the default tax system, meaning if you do not choose anything, this will be applicable. However, you can choose the old system while filing ITR (if you do not have business income). Under Section 87A, tax exemption will be available on income up to Rs 12 lakh, that is, till this limit the tax can be zero.
Will the slabs change from April 1, 2026?
No, the government has neither made any changes in the slabs of the old nor the new tax system in Budget 2026. The existing tax structure has been continued in the Income-tax Act, 2025 also. That means the tax slabs will remain the same in FY 2026-27, there will be no change.