What are Income Tax rates under new & old tax regime as govt made no changes this year?
The Budget 2026 has been announced, and as expected, it has brought about a mix of emotions among the citizens of India. One of the most anticipated aspects of the budget was the revision of income tax rates. However, this year, the government has decided to keep the personal income tax rates unchanged, leaving many wondering what this means for their financial planning. In this blog post, we will delve into the details of the income tax rates under both the new and old tax regimes, and explore what this means for individuals and families.
First, let’s take a look at the income tax rates under the new tax regime. Introduced in 2020, this regime was designed to simplify the tax structure and reduce the burden on taxpayers. Under this regime, income up to ₹12 lakh is tax-free, making it an attractive option for those with lower incomes. For those with higher incomes, the tax rates are as follows:
- 15% for income between ₹12 lakh and ₹16 lakh
- 20% for income between ₹16 lakh and ₹20 lakh
- 25% for income between ₹20 lakh and ₹24 lakh
- 30% for income above ₹24 lakh
On the other hand, the old tax regime has been in place for many years and has a more complex tax structure. Under this regime, the tax rates are as follows:
- 0% for income up to ₹2.5 lakh
- 5% for income between ₹2.5 lakh and ₹5 lakh
- 20% for income between ₹5 lakh and ₹10 lakh
- 30% for income above ₹10 lakh
As we can see, the new tax regime offers a more simplified and reduced tax burden for those with lower incomes. However, for those with higher incomes, the old tax regime may still be a better option, depending on their individual circumstances.
So, why did the government decide to keep the income tax rates unchanged this year? One reason could be that the government wants to maintain stability and consistency in the tax structure, rather than making frequent changes that could confuse taxpayers. Another reason could be that the government is focusing on other areas of the budget, such as infrastructure development and social welfare programs.
Whatever the reason, the fact remains that the income tax rates remain unchanged, and individuals and families will need to continue to plan their finances accordingly. For those who are unsure about which tax regime to opt for, it’s essential to consult with a financial advisor or tax consultant to determine the best course of action.
In conclusion, the Budget 2026 has left the income tax rates unchanged, with the new tax regime offering a more simplified and reduced tax burden for those with lower incomes. While the old tax regime may still be a better option for those with higher incomes, it’s essential to carefully consider individual circumstances and seek professional advice before making any decisions.
As the financial year begins, it’s essential to stay informed and up-to-date on the latest tax laws and regulations. Whether you’re a salaried individual or a business owner, understanding the income tax rates and how they apply to you can help you make informed decisions about your finances.
For more information on the Budget 2026 and the income tax rates, you can visit the official government website or consult with a financial advisor. Stay tuned for more updates and analysis on the budget and its implications for individuals and businesses.
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