Budget 2027: Income Tax Slabs Unchanged, No Fresh Relief for Salaried Taxpayers

New Delhi: Finance Minister Nirmala Sitharaman, while presenting the Union Budget on February 1, 2026, announced that the government has kept income tax slabs unchanged, opting for stability in the tax structure but offering no additional relief to individual taxpayers. The basic exemption limit has also been retained at existing levels, with no revision in this year’s Budget.

Under the new tax regime for FY 2026–27, salaried individuals below 60 years will continue to pay no tax on income up to ₹4 lakh. Income between ₹4 lakh and ₹8 lakh will be taxed at 5 per cent, ₹8 lakh to ₹12 lakh at 10 per cent, ₹12 lakh to ₹16 lakh at 15 per cent, ₹16 lakh to ₹20 lakh at 20 per cent, ₹20 lakh to ₹24 lakh at 25 per cent, and income above ₹24 lakh at 30 per cent.

The government has retained the standard deduction at ₹75,000 for salaried employees, with no further increase announced for either salaried taxpayers or pensioners. As a result, taxable income for most individuals will remain largely unchanged unless there is a rise in salary or other income sources.

Additionally, a rebate under Section 87A will continue to be available for net taxable income up to ₹12 lakh, effectively making such income fully tax-free under the new regime.

No changes have been announced in the old tax regime either. Existing slabs, exemptions and deductions remain intact, allowing taxpayers to continue choosing between the old and new regimes based on what is more beneficial for them.