What are Income Tax rates under new & old tax regime as govt made no changes this year?
The Union 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, the government has decided to keep the personal income tax rates unchanged, much to the surprise of many. In this blog post, we will delve into the details of the income tax rates under both the new and old tax regimes, and what this means for the common man.
For those who are unaware, the government had introduced a new tax regime in 2020, which offered an alternative to the existing old tax regime. The new tax regime came with its own set of rules and regulations, and it was optional for taxpayers to choose between the two. The main difference between the two regimes is the way taxes are calculated and the deductions that are allowed.
Under the new tax regime, income up to ₹12 lakh is tax-free, which means that individuals with an annual income of up to ₹12 lakh do not have to pay any taxes. This is a significant increase from the old regime, where tax exemption was only up to ₹2.5 lakh. For income between ₹12 lakh and ₹16 lakh, the tax rate is 15%, which is relatively lower than the old regime. The tax rates under the new regime are as follows:
- 0% tax up to ₹12 lakh
- 15% tax for ₹12–16 lakh
- 20% tax for ₹16–20 lakh
- 25% tax for ₹20–24 lakh
- 30% tax above ₹24 lakh
On the other hand, the old tax regime has the following tax rates:
- 0% tax up to ₹2.5 lakh
- 5% tax for ₹2.5–5 lakh
- 20% tax for ₹5–10 lakh
- 30% tax above ₹10 lakh
As we can see, the new tax regime offers a more beneficial tax structure, especially for those with lower incomes. However, the old regime allows for more deductions and exemptions, which can be beneficial for certain individuals.
The decision to keep the income tax rates unchanged has been met with mixed reactions. While some have welcomed the move, others have expressed disappointment. The government’s decision to not revise the tax rates may be seen as a missed opportunity to provide relief to the common man, who has been facing the brunt of inflation and economic slowdown.
However, it is also important to note that the government has not increased the tax rates, which is a positive sign. This means that individuals will not have to pay more taxes than they were paying earlier. Additionally, the government has also not made any changes to the tax slabs, which provides stability and predictability to the tax system.
In conclusion, the income tax rates under the new and old tax regimes remain unchanged, with the new regime offering a more beneficial tax structure for those with lower incomes. While the government’s decision to not revise the tax rates may have been met with disappointment, it is also important to note that the tax rates have not been increased. As the economy continues to evolve, it will be interesting to see how the tax system adapts to the changing needs of the citizens.
For more information on the Union Budget 2026 and the income tax rates, you can visit the official government website or consult a tax expert. It is always a good idea to stay informed about the tax laws and regulations, as they can have a significant impact on your financial planning and decision-making.
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