Correction (16 July 2026): An earlier version of this article incorrectly reported that Budget 2026-27 revised the new-regime slabs, raised the standard deduction to Rs 1,00,000 and increased the Section 80CCD(1B) NPS limit to Rs 75,000. The Budget made no such changes. The article below has been fully corrected against the Budget record. Oquilia regrets the error; corrections are always noted openly.
The Union Budget 2026-27, presented on 1 February 2026, left personal income tax where Budget 2025 put it: the Finance Minister kept the tax slabs under both the old and new regimes unchanged for FY 2026-27, retained the standard deduction, and made no change to the Section 87A rebate. For salaried taxpayers, the zero-tax threshold of Rs 12.75 lakh under the new regime continues for another year.
New Regime Slabs for FY 2026-27 — Unchanged
The Section 115BAC slab structure introduced by Budget 2025 continues as-is: income up to Rs 4 lakh is nil; Rs 4-8 lakh is taxed at 5%; Rs 8-12 lakh at 10%; Rs 12-16 lakh at 15%; Rs 16-20 lakh at 20%; Rs 20-24 lakh at 25%; and income above Rs 24 lakh at 30%. The Section 87A rebate also continues at Rs 60,000, which keeps tax at zero for taxable income up to Rs 12 lakh (with marginal relief just above it).
Standard Deduction Stays at Rs 75,000
The standard deduction for salaried individuals and pensioners under the new regime remains Rs 75,000 (Rs 50,000 under the old regime). Combined with the Rs 12 lakh rebate threshold, a salaried individual earning up to Rs 12.75 lakh continues to pay zero tax under the new regime in FY 2026-27.
What Actually Changed: ITR Deadlines and Compliance
The Budget's personal-tax substance was procedural. From AY 2026-27, return-filing deadlines are staggered: ITR-1 and ITR-2 remain due 31 July 2026, while ITR-3 and ITR-4 filers not requiring a tax audit get until 31 August 2026; audit cases remain 31 October 2026. The Budget also announced a rule-based, automated compliance framework intended to reduce the filing burden on small taxpayers.
Old vs New Regime: The Practical Read
With no rate changes on either side, the regime arithmetic is the same as last year: the old regime generally wins only where total deductions (Section 24 home-loan interest, 80C, 80D, HRA and the rest) are large enough to offset the new regime's wider slabs and rebate — for most salaried taxpayers without a home loan, the new regime remains the better default. Run both sides on the Oquilia old-vs-new calculator with your own numbers.
What Did Not Change
The Section 80CCD(1B) additional NPS deduction stays at Rs 50,000 (old regime). Listed-equity LTCG remains at 12.5% beyond the Rs 1.25 lakh annual exemption, and the FD-interest TDS threshold for non-senior citizens remains Rs 50,000, both as set by earlier Finance Acts. This report is informational and is not investment or tax advice.
Source
Union Budget 2026-27, Ministry of Finance