📢 Budget 2026-27 — What Changed?
Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 on February 1, 2026. This was her 9th consecutive budget. While the income tax slabs remain unchanged from last year, several important changes were announced that affect how you file taxes in Assessment Year 2027-28.
Major Changes in Budget 2026
New Income Tax Act, 2025: The completely rewritten tax code replaces the 1961 Act from April 2026. The forms and compliance procedures have been simplified significantly for ordinary citizens.
MAT Rate Reduced: Minimum Alternate Tax has been brought down from 15% to 14%. Companies still on the old regime can set off brought-forward MAT credit up to 25% of their tax liability in the new regime.
TCS on Overseas Tours Cut: The TCS rate on overseas tour packages has been reduced from 5%/20% to just 2% — a big relief for travelers.
Revised Return Deadline Extended: You now have until March 31 of the following year to file a revised return, up from the earlier December 31 deadline.
STT Increased: Securities Transaction Tax on equity delivery has gone up from 0.1% to 0.15%. This affects stock market investors and traders directly.
📊 New Regime Tax Slabs 2026-27
The New Tax Regime is the default regime since Budget 2023. Here are the current slabs with the ₹75,000 standard deduction:
| Income Slab | Tax Rate | Tax on Slab |
|---|---|---|
| Up to ₹4,00,000 | NIL | ₹0 |
| ₹4,00,001 — ₹8,00,000 | 5% | ₹20,000 |
| ₹8,00,001 — ₹12,00,000 | 10% | ₹40,000 |
| ₹12,00,001 — ₹16,00,000 | 15% | ₹60,000 |
| ₹16,00,001 — ₹20,00,000 | 20% | ₹80,000 |
| ₹20,00,001 — ₹24,00,000 | 25% | ₹1,00,000 |
| Above ₹24,00,000 | 30% | Varies |
📋 Old Regime Tax Slabs 2026-27
The Old Regime offers ₹50,000 standard deduction plus access to 80C, 80D, HRA and other deductions. Here are the slabs:
| Income Slab (Below 60) | Tax Rate |
|---|---|
| Up to ₹2,50,000 | NIL |
| ₹2,50,001 — ₹5,00,000 | 5% |
| ₹5,00,001 — ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
| Age Group | Basic Exemption |
|---|---|
| Below 60 years | ₹2,50,000 |
| Senior (60-79 years) | ₹3,00,000 |
| Super Senior (80+ years) | ₹5,00,000 |
⚖️ New vs Old — Side by Side Comparison
New Regime
✅ ₹75K standard deduction
✅ ₹12L income = Zero tax
✅ Simpler, no paperwork
❌ No 80C/80D deductions
❌ No HRA exemption
❌ No home loan interest
Old Regime
✅ 80D (health insurance)
✅ HRA exemption
✅ Home loan ₹2L deduction
❌ Higher slab rates
❌ Only ₹50K std deduction
❌ Complex compliance
📈 Tax Comparison Charts
Let's see the actual tax payable at different income levels under both regimes. These numbers assume standard deduction only (no additional deductions for Old Regime):
🎯 Which Regime is Better for YOU?
The answer depends on one thing — how much deductions you can actually claim. Here's a quick decision framework:
| Your Situation | Best Regime | Why |
|---|---|---|
| Income below ₹12 Lakh | New Regime ✅ | Zero tax with 87A rebate |
| Salaried, no investments | New Regime ✅ | Lower slab rates, simpler filing |
| ₹1.5L in 80C + ₹25K 80D + HRA | Old Regime ✅ | Deductions exceed ₹3.75L threshold |
| Home loan (₹2L interest) + 80C | Old Regime ✅ | ₹3.5L+ in deductions |
| Income above ₹20L, no deductions | New Regime ✅ | Lower marginal rates at higher slabs |
| Freelancer / Business income | Compare Both | Depends on allowable expenses |
💰 Section 80C, 80D & Other Deductions
These deductions are only available in the Old Regime. Here's what you can claim:
Section 80C — Up to ₹1,50,000
This is the most popular tax-saving section. You can invest in any combination of:
Section 80D — Health Insurance
| Category | Deduction Limit |
|---|---|
| Self + Family (below 60) | ₹25,000 |
| Self + Family (senior citizen) | ₹50,000 |
| Parents (below 60) | ₹25,000 extra |
| Parents (senior citizen) | ₹50,000 extra |
| Maximum Total | ₹1,00,000 |
🧠 5 Tax Saving Strategies for 2026
These strategies work regardless of which regime you choose:
1. Max out your EPF contribution. If you're salaried, your PF deduction already counts under 80C. Check your salary slip — many people don't realise they're already using ₹50K-₹1L of their 80C limit through PF.
2. Get health insurance if you don't have it. A ₹5 Lakh family floater costs ₹8,000-15,000/year and gives you ₹25,000 deduction under 80D. The tax saving alone covers half the premium.
3. Invest in ELSS early in the year. Don't wait until March. Start a monthly SIP of ₹12,500 in an ELSS fund — you'll complete ₹1.5L by December with rupee cost averaging.
4. Compare BOTH regimes before filing. Use our Income Tax Calculator to see exact savings under each regime with your numbers.
5. File your revised return before March 31. Budget 2026 extended the deadline. If you missed any deduction or chose the wrong regime, you can still fix it.
🧮 Calculate Your Tax Now
Don't guess — calculate your exact tax under both regimes with our free calculator:
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