Income Tax slabs FY 2026–27: Will rates change from April 1 under new tax rules?
New Delhi: With the Income-tax Act, 2025 set to come into force from April 1, 2026, many taxpayers have been wondering whether income tax slabs will change in the upcoming financial year 2026-27. However, there is no revision in tax slab rates under either the old or the new tax regime, as per current provisions.
During her Union Budget 2026 presentation, Finance Minister Nirmala Sitharaman confirmed that the new Act would apply to income earned in FY 2026-27 (Assessment Year 2027-28). Despite the overhaul in the legal framework, the tax slab structure itself remains unchanged.
Old vs New Tax Regime: What stays the same?
Under the old tax regime, the existing slab rates continue:
- Up to ₹2.5 lakh: Nil
- ₹2.5 lakh to ₹5 lakh: 5%
- ₹5 lakh to ₹10 lakh: 20%
- Above ₹10 lakh: 30%
Similarly, the new tax regime, now the default system, retains its previously announced slab structure:
- Up to ₹4 lakh: Nil
- ₹4 lakh to ₹8 lakh: 5%
- ₹8 lakh to ₹12 lakh: 10%
- ₹12 lakh to ₹16 lakh: 15%
- ₹16 lakh to ₹20 lakh: 20%
- ₹20 lakh to ₹24 lakh: 25%
- Above ₹24 lakh: 30%
What changes under the new tax regime?
While slab rates remain intact, the new regime continues to be the default option for individual taxpayers. However, those without business income can still opt for the old regime while filing their income tax returns.
Another key benefit that continues is the rebate under Section 87A, which ensures that individuals with taxable income up to ₹12 lakh do not have to pay any tax under the new regime.
The government has not proposed any changes to tax slabs in Budget 2026–27, nor do the notified provisions of the Income-tax Act, 2025, indicate any restructuring of rates. This clarifies that taxpayers will continue under the same slab system when the new law takes effect next financial year.
In essence, while the legal framework governing taxation is being modernised, the actual tax burden, at least in terms of slab rates, remains unchanged for FY 2026–27.