What are Income Tax rates under new & old tax regime as govt made no changes this year?
The much-awaited Budget 2026 has finally been announced, and as expected, it has brought a mix of excitement and disappointment for the common man. One of the most significant aspects of the budget is the income tax rates, which have been a subject of interest for many. In this blog post, we will delve into the details of the income tax rates under the new and old tax regimes, and how they remain unchanged this year.
To begin with, it is essential to understand that the government has not made any changes to the income tax rates this year. This means that the tax slabs and rates that were applicable last year will continue to be in force. Under the new tax regime, which was introduced last year, income up to ₹12 lakh is tax-free. This is a significant increase from the earlier tax-free limit of ₹2.5 lakh under the old regime. The new regime also offers a more gradual increase in tax rates, with 15% tax applicable on income between ₹12 lakh and ₹16 lakh, 20% on income between ₹16 lakh and ₹20 lakh, 25% on income between ₹20 lakh and ₹24 lakh, and 30% on income above ₹24 lakh.
On the other hand, the old tax regime has a more traditional tax slab structure. Under this regime, income up to ₹2.5 lakh is tax-free, followed by a 5% tax on income between ₹2.5 lakh and ₹5 lakh, 20% on income between ₹5 lakh and ₹10 lakh, and 30% on income above ₹10 lakh. While the old regime offers more deductions and exemptions, the new regime is more straightforward and easier to understand.
One of the primary reasons why the government may not have made any changes to the income tax rates this year is to provide stability and continuity to taxpayers. The new tax regime was introduced last year, and it may take some time for taxpayers to adjust to the new system. By not making any changes, the government is providing a sense of certainty and predictability, which is essential for taxpayers to plan their finances.
Another possible reason why the government may not have made any changes to the income tax rates is to focus on other areas of the budget. The government may have prioritized other sectors, such as infrastructure, healthcare, or education, and decided to allocate more resources to these areas. This could be a strategic move to boost economic growth and development, rather than tinkering with the income tax rates.
It is also worth noting that the government has not made any changes to the tax rates for corporates or other entities. This could be a sign that the government is looking to promote business and entrepreneurship, and is willing to provide a stable and favorable tax environment to support growth.
In conclusion, the income tax rates under the new and old tax regimes remain unchanged this year. While this may come as a disappointment to some, it also provides a sense of stability and predictability for taxpayers. The new tax regime offers a more gradual increase in tax rates, while the old regime offers more deductions and exemptions. As the government continues to focus on promoting economic growth and development, it will be interesting to see how the income tax rates evolve in the coming years.
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