Budget Session By TaxFetch - 01

Navigating the Future: A Breakdown of the Union Budget 2026-27

Detailed Tax Slab Comparison (FY 2026-27)

The Union Budget 2026-27 maintains the tax slab structure introduced in the previous year to provide stability. The New Tax Regime remains the default option, featuring lower rates but fewer deductions.

New Tax Regime (Default)

Income RangeTax Rate
Up to Rs.4,00,000NIL
Rs.4,00,001 - Rs.8,00,0005%
Rs.8,00,001 - Rs.12,00,00010%
Rs.12,00,001 - Rs.16,00,00015%
Rs.16,00,001 - Rs.20,00,00020%
Rs.20,00,001 - Rs.24,00,00025%
Above Rs.24,00,00030%

Old Tax Regime (Optional)

Income RangeTax Rate
Up to Rs.2,50,000NIL
Rs.2,50,001 - Rs.5,00,0005%
Rs.5,00,001 - Rs.10,00,00020%
Above Rs.10,00,00030%

Before vs. After: Major Shifts in Tax Laws & Rules

The most significant change is the transition to the Income Tax Act, 2025, which replaces the 1961 law starting 1 April 2026.

Feature Before (Income Tax Act, 1961) After (Income Tax Act, 2025)
Legal Framework Six-decade-old law with thousands of complex amendments. Simplified code with sections condensed from 700+ to 536.
Timeline Concept Used “Previous Year” and “Assessment Year”. Unified into a single “Tax Year”.
Revision Window Revised returns filed until 31 December. Extended up to 31 March with a nominal fee.
Standard Deduction Rs.50,000 (Old Regime) / Rs.75,000 (New Regime). Retained at these levels for FY 2026-27.
Overseas Tax (TCS) 5% to 20% on tours and remittances. Slashed to a flat 2% for tour packages and education.
Offences Minor procedural defaults were criminal offences. Decriminalised; minor defaults now attract only fines.

Key Highlights of Union Budget 2026-27

1

Zero Tax up to Rs.12.75 Lakh

Under the New Tax Regime, resident individuals with taxable income up to Rs.12 lakh pay zero tax due to the Section 87A rebate. For salaried employees, the Rs.75,000 standard deduction extends this tax-free limit to Rs.12.75 lakh.

2

Cheaper Gadgets and Life-Saving Care

  • Personal Imports: Customs duty on gadgets or gifts from international sites has been halved from 20% to 10%.
  • Healthcare Relief: Full customs duty exemption for 17 essential cancer drugs and medicines for 7 additional rare diseases.
3

Market & Investment Updates

  • Speculation Tax: To curb excessive trading, the Securities Transaction Tax (STT) on futures rose to 0.05% and on options to 0.15%.
  • Capital Gains: Long-term capital gains tax remains at 12.5% with a Rs.1.25 lakh exemption limit.
4

Infrastructure & Future Tech

  • Railways: Allocation for 7 new High-Speed Rail corridors, including Mumbai-Pune and Delhi-Varanasi.
  • Manufacturing: Launch of India Semiconductor Mission (ISM) 2.0 and the Biopharma SHAKTI scheme.

The Bottom Line

Budget 2026-27 is a growth-first roadmap. By lowering the fiscal deficit target to 4.3%, the government is balancing aggressive infrastructure spending with disciplined financial management. For the common man, the focus on healthcare, simplified taxes, and cheaper imports offers immediate relief.

Link copied to clipboard!