Budget 2026: No change in tax rates in budget 2026; rebate continues for income up to ₹12 lakh

Finance Minister Nirmala Sitharaman on February 1 announced that income tax slabs and exemption limits will remain unchanged in the Union Budget for 2026–27, offering stability in the personal tax framework but no additional relief for individual taxpayers.

Presenting the Budget in Parliament, Sitharaman retained the existing slab structure under the revised tax regime, signalling the government’s preference for policy continuity amid broader fiscal and economic priorities.

Under the revised tax regime for FY 2025–26, salaried individuals below the age of 60 will not pay any income tax on earnings up to ₹4 lakh, which remains the basic exemption limit. Income between ₹4 lakh and ₹8 lakh will be taxed at 5%, ₹8 lakh to ₹12 lakh at 10%, ₹12 lakh to ₹16 lakh at 15%, ₹16 lakh to ₹20 lakh at 20%, ₹20 lakh to ₹24 lakh at 25%, and income above ₹24 lakh at 30%.

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The finance minister also confirmed that the standard deduction for salaried employees will continue at ₹75,000, providing some relief by reducing taxable income. In addition, the rebate under Section 87A will remain in place for individuals with net taxable income up to ₹12 lakh, effectively making such income fully tax-free under the revised regime.

While the absence of changes in tax slabs may disappoint taxpayers expecting relief amid rising living costs, the government’s decision ensures predictability in the tax system and avoids additional compliance complexity for individuals and employers.

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