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- Income Tax Slabs Budget 2026 Highlights: No changes in income tax rates, slabs for FY 2026-27; some TCS, TDS changes & new deadline for filing revised returns announced
THE TIMES OF INDIA | Feb 02, 2026, 13:00:18 IST
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Income Tax Slabs Budget 2026 Highlights: No changes in income tax rates, slabs for FY 2026-27; some TCS, TDS changes & new deadline for filing revised returns announced
Income Tax Budget 2026 Highlights: Finance Minister Nirmala Sitharaman has presented the Union Budget 2026-27. No changes in the income tax slabs and income tax rates under the new or old income tax regime have been announced. Sitharaman focused on making return filing and updates simpler, while promoting voluntary compliance to reduce disputes and litigation. She said the new Income Tax Act, 2025, which will take effect from April 1, is revenue-neutral, with no changes to tax rates or slabs. However, it streamlines the law by nearly halving the number of sections and removing multiple layers of interpretational complexity.
The Finance Minister also announced that the deadline for filing a revised return will be extended from nine months to 12 months from the end of the tax year, giving taxpayers more time to correct errors without the immediate threat of penalties.
In addition, taxpayers will be allowed to file updated returns even after reassessment proceedings have begun, subject to a cost. In such cases, an additional tax of 10% will be levied over and above the applicable rate for that year, and updated returns can also be used to scale back losses claimed earlier.
A key reform is the move to a single “tax year”, doing away with the long-standing and often confusing distinction between the assessment year and the previous year. Revised income tax return forms are set to be notified soon, with the government promising clearer language and easier formats that allow most taxpayers to comply without professional help.
The new income tax regime has the benefit of lower income tax rates, more rationalised income tax slabs, higher standard deduction limit. However, it also offers negligible deductions and exemptions. In contrast the old income tax regime has higher tax rates at lower levels of income, with the 30% tax slab kicking in at Rs 10 lakh only, an income level which is tax exempt under the new tax regime. But popular deductions and exemptions such as Section 80C, Section 80D, Section 80TTA, home loan interest benefits are available under the old regime.
The Finance Minister also announced that the deadline for filing a revised return will be extended from nine months to 12 months from the end of the tax year, giving taxpayers more time to correct errors without the immediate threat of penalties.
In addition, taxpayers will be allowed to file updated returns even after reassessment proceedings have begun, subject to a cost. In such cases, an additional tax of 10% will be levied over and above the applicable rate for that year, and updated returns can also be used to scale back losses claimed earlier.
A key reform is the move to a single “tax year”, doing away with the long-standing and often confusing distinction between the assessment year and the previous year. Revised income tax return forms are set to be notified soon, with the government promising clearer language and easier formats that allow most taxpayers to comply without professional help.
The new income tax regime has the benefit of lower income tax rates, more rationalised income tax slabs, higher standard deduction limit. However, it also offers negligible deductions and exemptions. In contrast the old income tax regime has higher tax rates at lower levels of income, with the 30% tax slab kicking in at Rs 10 lakh only, an income level which is tax exempt under the new tax regime. But popular deductions and exemptions such as Section 80C, Section 80D, Section 80TTA, home loan interest benefits are available under the old regime.
09:50 (IST) Feb 01
Income Tax Slabs Budget 2026: New Income Tax Act explained
“The New Income Tax Act has been drafted in simpler, more user-friendly language, with logically connected provisions placed together rather than dispersed through extensive cross-referencing. This improved structure significantly enhances readability and interpretational clarity, making the law more accessible to taxpayers and professionals alike.
From a substantive standpoint, the New Income Tax Act does not alter the underlying tax provisions compared to the existing Income-tax Act, 1961. Any policy changes announced in future Budgets will therefore need to be incorporated into the New Income Tax Act, 2025 through the respective Finance Bills.
The New Income Tax Act, 2025 is proposed to come into force from 1 April 2026, unless a different date is notified. However, the rules under the new Act are yet to be notified. Early notification of these rules would be beneficial, as it would allow taxpayers, tax professionals, and businesses adequate time to familiarise themselves with the new framework, ensuring a smoother and more predictable transition.
In addition, there is a strong case for simplifying tax deduction at source (TDS) compliance in line with the philosophy of the new Act. Currently, withholding tax compliance for payments made to non-residents is significantly more complex than for payments to residents, involving separate registrations (such as TAN), distinct tax payment mechanisms, and multiple forms. Rationalising this process—by enabling simplified, account-based withholding and reporting through the e-filing portal, similar to resident payments—would meaningfully reduce compliance burdens and align TDS procedures with the overall objective of ease of doing business,” says Tanu Gupta, Partner at Mainstay Tax Advisors LLP.
From a substantive standpoint, the New Income Tax Act does not alter the underlying tax provisions compared to the existing Income-tax Act, 1961. Any policy changes announced in future Budgets will therefore need to be incorporated into the New Income Tax Act, 2025 through the respective Finance Bills.
The New Income Tax Act, 2025 is proposed to come into force from 1 April 2026, unless a different date is notified. However, the rules under the new Act are yet to be notified. Early notification of these rules would be beneficial, as it would allow taxpayers, tax professionals, and businesses adequate time to familiarise themselves with the new framework, ensuring a smoother and more predictable transition.
In addition, there is a strong case for simplifying tax deduction at source (TDS) compliance in line with the philosophy of the new Act. Currently, withholding tax compliance for payments made to non-residents is significantly more complex than for payments to residents, involving separate registrations (such as TAN), distinct tax payment mechanisms, and multiple forms. Rationalising this process—by enabling simplified, account-based withholding and reporting through the e-filing portal, similar to resident payments—would meaningfully reduce compliance burdens and align TDS procedures with the overall objective of ease of doing business,” says Tanu Gupta, Partner at Mainstay Tax Advisors LLP.
09:40 (IST) Feb 01
Income Tax Slabs Budget 2026: What changes does the new tax regime still need?
“Historically, tax savings have acted as a strong incentive for individuals to make compulsory savings. Taxpayers often saved tax by purchasing insurance, investing in fixed deposits or mutual funds, or contributing to schemes such as PPF and NPS. However, this mindset sometimes led to investments that were not aligned with individuals’ financial goals, as the primary consideration was tax saving rather than suitability or returns.
With the introduction of the new tax regime, the Government eliminated many exemptions and deductions that taxpayers earlier availed by making such investments, thereby removing tax considerations as a key driver of investment decisions. As a result, taxpayers opting for the new tax regime are generally not disincentivised, as the tax savings that were earlier linked to investments are now effectively returned to them through lower overall tax rates. In essence, the Government has freed individuals to make savings and investment decisions aligned with their financial goals rather than purely for tax-saving purposes.
That said, it is difficult to conclusively determine whether this shift has contributed to a decline in the overall savings rate over time. The younger generation increasingly prefers higher cash-in-hand, either to invest in newer avenues or to spend on consumption, rather than saving through traditional channels such as banks or post offices. Additionally, increased participation in equity markets may have diverted funds away from conventional savings schemes. Given the current policy focus on boosting consumption, it appears unlikely that the Government will introduce new schemes or changes under the new tax regime aimed at encouraging additional savings in the near term,” says Tanu Gupta, Partner at Mainstay Tax Advisors LLP.
With the introduction of the new tax regime, the Government eliminated many exemptions and deductions that taxpayers earlier availed by making such investments, thereby removing tax considerations as a key driver of investment decisions. As a result, taxpayers opting for the new tax regime are generally not disincentivised, as the tax savings that were earlier linked to investments are now effectively returned to them through lower overall tax rates. In essence, the Government has freed individuals to make savings and investment decisions aligned with their financial goals rather than purely for tax-saving purposes.
That said, it is difficult to conclusively determine whether this shift has contributed to a decline in the overall savings rate over time. The younger generation increasingly prefers higher cash-in-hand, either to invest in newer avenues or to spend on consumption, rather than saving through traditional channels such as banks or post offices. Additionally, increased participation in equity markets may have diverted funds away from conventional savings schemes. Given the current policy focus on boosting consumption, it appears unlikely that the Government will introduce new schemes or changes under the new tax regime aimed at encouraging additional savings in the near term,” says Tanu Gupta, Partner at Mainstay Tax Advisors LLP.
09:31 (IST) Feb 01
Income Tax Budget 2026 Live: Will old tax regime be removed?
The new income tax regime was introduced in Union Budget 2020 for the first time. Since then it has evolved into a default tax regime with several changes and benefits, particularly for the middle class and salaried taxpayers. The intent of the new income tax regime was to provide a tax regime with fewer exemptions and deductions and lower tax rates to ease the tax filing process. Since the introduction of the new income tax regime, tax experts are of the view that the old tax regime may eventually be phased out. However, this year there is no expectation of the old tax regime being done away with.
09:26 (IST) Feb 01
Income Tax Slabs Live: What do salaried taxpayers want from FM?
There are several key asks of middle class and salaried taxpayers from the Union Budget. One of the most popular ones is that the standard deduction under the new tax regime should be hiked to Rs 1 lakh to give more disposable income in the hands of taxpayers. Yet another ask is that the income tax slab for 30% tax rate should be at Rs 30 lakh income instead of the present Rs 24 lakh.
09:09 (IST) Feb 01
Income Tax Budget 2026 Live: Taxing of capital gains and special income
It is important to note that there is no rebate available on income from capital gains, lotteries or any other income on which special rate has been provided in the Income Tax Act. It is available only on the tax payable as per slabs under section 115BAC. This is applicable both for the old and the new income tax regime.
09:00 (IST) Feb 01
Income Tax Budget 2026 Live: How e-filing can be made easier
“The accuracy in capturing various streams of income such as salary, interest, dividends, and even details relating to capital gains from securities and mutual funds, has indeed improved significantly over the years. While most of these incomes are now pre-filled in the income tax return forms, certain schedules—most notably the Capital Gains schedule—continue to require manual inputs. The multiple columns and detailed disclosures like quarter-wise break-up of income accrual/receipt under this schedule further adds to the complexity. The government should provide a fully prefilled income tax return to the common man and salaried taxpayers who do not have business income, so that they can simply review the prefilled return and file it after verification with the click of a button.
Currently, individuals aged 75 years or above who earn only pension income and interest income from the same bank, and who have declared these incomes to the bank in the prescribed form, are exempt from filing an income tax return. Given the improved accuracy in capturing income and tax-paid details directly from source systems, the scope of exempting taxpayers from filing simple returns may be expanded on similar lines to cover other eligible categories of taxpayers as well,” Tanu Gupta, Partner at Mainstay Tax Advisors LLP tells TOI.
Currently, individuals aged 75 years or above who earn only pension income and interest income from the same bank, and who have declared these incomes to the bank in the prescribed form, are exempt from filing an income tax return. Given the improved accuracy in capturing income and tax-paid details directly from source systems, the scope of exempting taxpayers from filing simple returns may be expanded on similar lines to cover other eligible categories of taxpayers as well,” Tanu Gupta, Partner at Mainstay Tax Advisors LLP tells TOI.
08:51 (IST) Feb 01
Income Tax Budget 2026 Live: What is the difference between rebate and marginal relief?
Income Tax Slabs Budget 2026: Taxpayers should know the difference between rebate and marginal relief. Rebate is the deduction from tax that is available to taxpayers who have income upto Rs 12 lakh in the new tax regime. In the old regime, this rebate is for income up to Rs 5 lakh. On the other hand, marginal relief ensures that taxpayers who have income marginally above Rs 12 lakh under the new tax regime do not pay tax more than the income in excess of 12 lakh.
08:40 (IST) Feb 01
Income Tax Slabs Live: Rebate under Section 87A - the maximum limit
Under the new income tax regime, effective FY 2025-26, the maximum amount of rebate available to any taxpayer is Rs 60,000. This is for individuals having an income up to Rs 12 lakh (Rs 12.75 lakh in case of salaried taxpayers who get the Rs 75,000 standard deduction benefit).
08:30 (IST) Feb 01
Income Tax Budget 2026 Live: Marginal relief for taxpayers
According to the Income Tax Department rules effective FY 2025-26, those with incomes slightly above Rs 12 lakh will get a marginal relief. In the new regime under section 115BAC(1A), marginal relief is available to resident individuals. For example, if you have an income of Rs 12, 10,000/-, if there is no marginal relief, then the tax works out to be Rs 61,500/-(5% of Rs.4 lakh +10% of 4 lakh and 15% of Rs 10,000). However, due to marginal relief, the amount of tax to be actually paid is Rs 10,000/-.
08:20 (IST) Feb 01
Income Tax Budget 2026 Live: NIL Tax level
Earlier the limit of income for nil tax payment was Rs 7 lakh. However this was changed to Rs 12 lakh effective FY 2025-26. The government has said that by increasing this limit to Rs 12 lakh, around one crore assessees, who were earlier required to pay tax varying from Rs 20,000 to Rs 80,000 will be now paying ZERO tax.
08:10 (IST) Feb 01
Income Tax Budget 2026 Live: Switching to new regime due to scrutiny?
Radhika Viswanathan, Executive Director, Deloitte India tells TOI, “As tax authorities leverage advanced analytics and real-time alerts, precise reporting of income and tax deduction / exemption claims in the tax return becomes essential. While the new regime sacrifices key deductions (HRA, 80C, etc.), it offers lower rates and reduces risk of claims mismatch. One should compare net tax liability under both regimes before deciding. Regardless of the regime chosen, one should always validate TDS, AIS/TIS data and retain all supporting documents as a measure of audit readiness.”
08:00 (IST) Feb 01
Income Tax Slabs Live: I-T department scrutiny for taxpayers
The mismatch related alerts and resultant scrutiny in most cases is independent of the tax regime selected. Largely it is triggered by reporting done in tax return vis-à-vis information available from various sources with the Income Tax Department. Hence, choosing the tax regime should be based on their individual facts and circumstances regarding the claim of exemptions/ deductions to be forgone in the old tax regime as compared to lower tax slab and rates under the new tax regime,” Parizad Sirwalla, Partner and Head, Global Mobility Services, Tax, KPMG in India tells TOI.
07:50 (IST) Feb 01
Income Tax Budget 2026 Live: Advantages of New Income Tax Act
“The Income-tax Act, 2025 is among the most significant simplification efforts in decades. It reduces sections from 819 to 536, nearly halves the word count, and reorganises exemptions into clearer schedules, making compliance more intuitive.
That said, implementation support will be critical in year one. Plain-English FAQs, transitional guidelines, illustrative examples, and an ‘old-to-new’ comparison of provisions will help taxpayers navigate confidently,” Surabhi Marwah, Tax Partner, EY India tells TOI.
That said, implementation support will be critical in year one. Plain-English FAQs, transitional guidelines, illustrative examples, and an ‘old-to-new’ comparison of provisions will help taxpayers navigate confidently,” Surabhi Marwah, Tax Partner, EY India tells TOI.
07:36 (IST) Feb 01
Income Tax Slabs Live: What are the benefits of the new tax regime changes introduced last year?
07:30 (IST) Feb 01
Income Tax Budget 2026 Live: Tax compliance
“With increased scrutiny via AIS/Form 26AS and automated mismatch alerts, many salaried individuals may find the new regime comparatively easier, as it involves fewer claims and therefore a lower risk of inadvertent errors. However, the choice remains fact-specific. Taxpayers with significant deductions/exemptions (for example, house rent allowance or housing-loan interest) should evaluate both regimes each year and opt for the one that gives the better outcome. Movement to the new regime may continue organically, but a ‘one-size-fits-all’ recommendation may not be feasible,” says Surabhi Marwah, Tax Partner, EY India.
07:20 (IST) Feb 01
Income Tax Budget 2026 Live: Tax return filing issues
Parizad Sirwalla, Partner and Head, Global Mobility Services, Tax, KPMG in India tells TOI, “For salaried taxpayers -Employers are required to issue Form 16 to employees by 15 June and thereafter employees have only 1.5 months to file the tax return by 31 July. Hence, there may be a case to provide to salaried taxpayers more time by extending 31 July timeline. Additionally, pre-filling Schedule AL (schedule of asset and liabilities) and Schedule FA (foreign assets) based on prior-year data and details in AIS (specially for Schedule AL) might also help.”
07:10 (IST) Feb 01
Income Tax Budget 2026 Live: Need for capital gains data in e-filing
“While most of the information relating to salary income, other sources etc. are now getting prepopulated in the return, capital gains data is still not flowing into the tax return. Further, there are instances where information uploaded by brokers and mutual fund houses into AIS/TIS are erroneous. It is important for the pre-populated data to be correct and complete to make the e-filing process easier as also give the taxpayer the confidence to go by the inputs available without a further cross check at their end. Further, instead of multiple ITR forms based on residential status and income type, the government could consider a single dynamic return where taxpayers select applicable income categories and only relevant schedules get activated, simplifying compliance for taxpayers.
Claiming TDS credit where tax is deducted under another person’s PAN, though taxable in the hands of the actual taxpayer, continues to be challenging. While an option exists in the ITR, the process often leads to mismatches and notices and needs further automation and streamlining.
Digitization has been the way forward and promoted extensively by the Government too. However, despite availability of digital verification modes, taxpayers, in some cases, are still required to send a physically signed ITR V due to technical or authentication issues. Strengthening digital verification and eliminating physical submission would make return filing completely paperless and frictionless,” Radhika Viswanathan, Executive Director, Deloitte India tells TOI.
Claiming TDS credit where tax is deducted under another person’s PAN, though taxable in the hands of the actual taxpayer, continues to be challenging. While an option exists in the ITR, the process often leads to mismatches and notices and needs further automation and streamlining.
Digitization has been the way forward and promoted extensively by the Government too. However, despite availability of digital verification modes, taxpayers, in some cases, are still required to send a physically signed ITR V due to technical or authentication issues. Strengthening digital verification and eliminating physical submission would make return filing completely paperless and frictionless,” Radhika Viswanathan, Executive Director, Deloitte India tells TOI.
07:00 (IST) Feb 01
Income Tax Slabs Budget 2026: Should you shift to the new tax regime?
“As tax authorities leverage advanced analytics and real-time alerts, precise reporting of income and tax deduction / exemption claims in the tax return becomes essential.
While the new regime sacrifices key deductions (HRA, 80C, etc.), it offers lower rates and reduces risk of claims mismatch. One should compare net tax liability under both regimes before deciding.
Regardless of the regime chosen, one should always validate TDS, AIS/TIS data and retain all supporting documents as a measure of audit readiness,” says Radhika Viswanathan, Executive Director, Deloitte India.
While the new regime sacrifices key deductions (HRA, 80C, etc.), it offers lower rates and reduces risk of claims mismatch. One should compare net tax liability under both regimes before deciding.
Regardless of the regime chosen, one should always validate TDS, AIS/TIS data and retain all supporting documents as a measure of audit readiness,” says Radhika Viswanathan, Executive Director, Deloitte India.
06:55 (IST) Feb 01
Income Tax Budget 2026 Live: Section 80C under new tax regime?
A strong savings culture is essential for a developing economy. While the new tax regime aims to simplify taxation through lower rates and minimal deductions, it can still encourage savings by allowing a limited, auto-tracked incentive linked to long-term instruments such as EPF, NPS or PPF, based on data already available with the government. This would promote savings without reintroducing complexity, paperwork or compliance burden,” Radhika Viswanathan, Executive Director, Deloitte India tells TOI.
06:50 (IST) Feb 01
Income Tax Budget 2026 Live: Tax scrutiny concerns & new regime
“The decision to opt for the new tax regime should not be driven by the fear that claiming genuine deductions or exemptions under the old regime will automatically trigger scrutiny or mismatch alerts. Such concerns, while understandable, should not be the primary basis for choosing a tax regime.
Instead, the choice should be guided by a clear cost–benefit analysis, focusing on two key considerations: (a) Which regime results in a lower tax outgo, and (b) Which regime is administratively simpler for the taxpayer, given their income and investment profile.
With the tax administration’s stated approach of “Trust First, Scrutinize Later,” taxpayers should feel confident in claiming all legitimate deductions and exemptions to which they are entitled. There is no reason to avoid the old regime solely due to apprehensions around scrutiny.
That said, taxpayers should adopt a precautionary, not fearful, approach. When claiming deductions or exemptions, it is important to ensure that adequate supporting documentation is maintained and readily available to respond to any follow-up queries from the tax department. This is no different from the documentation typically maintained for other income disclosures or claims made in the return,” says Tanu Gupta, Partner at Mainstay Tax Advisors LLP.
Instead, the choice should be guided by a clear cost–benefit analysis, focusing on two key considerations: (a) Which regime results in a lower tax outgo, and (b) Which regime is administratively simpler for the taxpayer, given their income and investment profile.
With the tax administration’s stated approach of “Trust First, Scrutinize Later,” taxpayers should feel confident in claiming all legitimate deductions and exemptions to which they are entitled. There is no reason to avoid the old regime solely due to apprehensions around scrutiny.
That said, taxpayers should adopt a precautionary, not fearful, approach. When claiming deductions or exemptions, it is important to ensure that adequate supporting documentation is maintained and readily available to respond to any follow-up queries from the tax department. This is no different from the documentation typically maintained for other income disclosures or claims made in the return,” says Tanu Gupta, Partner at Mainstay Tax Advisors LLP.
06:45 (IST) Feb 01
Income Tax Slabs Budget 2026: Mismatch alerts
“The mismatch related alerts and resultant scrutiny in most cases is independent of the tax regime selected. Largely it is triggered by reporting done in tax return vis-à-vis information available from various sources with the Income Tax Department. Hence, choosing the tax regime should be based on their individual facts and circumstances regarding the claim of exemptions/ deductions to be forgone in the old tax regime as compared to lower tax slab and rates under the new tax regime,” Parizad Sirwalla, Partner and Head, Global Mobility Services, Tax, KPMG in India tells TOI.
06:40 (IST) Feb 01
Income Tax Slabs Budget 2026: What changes are needed in new tax regime?
“The new regime has already been liberalised with lower slabs and higher rebates, so the near-term emphasis is likely to be stability and a smooth transition rather than fresh overhauls. Should there be any adjustment at all, it may most plausibly be an increase in the tax rebate, which currently ensures no tax liability up to INR 12 lakh; for salaried earners, the INR 75,000 standard deduction effectively extends this relief up to INR 12.75 lakh. An enhancement of this rebate, if considered, could help families manage inflation while keeping compliance light and aligned with the Government’s broader focus on predictability and taxpayer experience,” says Surabhi Marwah, Tax Partner, EY India.
06:35 (IST) Feb 01
Income Tax Slabs Live: New Income Tax Act For Taxpayers
“While at first glance, the increase in the number of sections in the New Income Tax Act 2025 as compared to the existing Act may come across as concerning, the law has been substantially restructured and rationalized to improve readability and interpretation. The provisions have been regrouped thematically, ambiguities addressed in several instances, and related provisions have been consolidated at one place instead of being scattered across multiple chapters and sections as under the current law. However, one may have to wait to watch if this indeed reduces interpretational disputes and makes compliance easier for taxpayers. The new Act does not change the existing limits for deductions or further realigned income slabs and tax rates. From an individual tax payer standpoint, this is an area for further action,” says Radhika Viswanathan, Executive Director, Deloitte India.
06:30 (IST) Feb 01
Income Tax Budget 2026 Live: Tax deduction and exemption proofs
“The new tax regime with lesser number of deductions/ exemptions and revised slab rates offers monetary savings to a large section of taxpayers and is relatively easy to comply with. There is lesser paperwork involved. And lesser claims mean lesser chances of mismatch!
Hence, shifting fully to the new tax regime can be a prudent choice for many taxpayers. Data shows that around 75% taxpayers have already adopted it. But again, assessment should be based on the facts of the taxpayer’s case,” says Richa Sawhney, Partner, Tax, Grant Thornton Bharat.
Hence, shifting fully to the new tax regime can be a prudent choice for many taxpayers. Data shows that around 75% taxpayers have already adopted it. But again, assessment should be based on the facts of the taxpayer’s case,” says Richa Sawhney, Partner, Tax, Grant Thornton Bharat.
06:25 (IST) Feb 01
Income Tax Slabs Live: New tax regime changes and savings
“While the new regime prioritizes simplicity, promoting small savings remains essential for funding long term specially infrastructure related expenditure/ investments of the Government. However, the new tax regime envisages eliminating tax deduction/ exemption as a decision-making factor in the investment which individual chooses. Hence, it makes the risk-reward ratio and other factors more prominent in the savings and investment decisions,” says Parizad Sirwalla, Partner and Head, Global Mobility Services, Tax, KPMG in India.
06:20 (IST) Feb 01
Income Tax Budget 2026 Live: Making tax e-filing easier
“India’s tax e-filing system has witnessed significant improvements over the years, backed by a robust digital infrastructure. To further simplify compliance for salaried taxpayers and move closer to a near “one-click” filing experience, targeted refinements can make a meaningful impact. For instance, full validation checks should be embedded within individual schedules at data entry stage, rather than some errors appearing only at the final verification stage. The separate e-verification process also merits simplification, as unintended delays after e-filing can result in returns being treated as invalid or belated despite timely submission. Automation in the computation of capital gains, especially for listed shares and mutual funds using pre-filled, transaction-level and period-wise data would reduce effort and errors. Additionally, employer-level validation of Form 16 may be introduced to ensure consistency between gross income reported in Part A and Part B. It would help avoid notices related to income mismatch and TDS disallowance,” says Nishant Kumar, Partner, Vialto Partners.
06:15 (IST) Feb 01
Income Tax Slabs Live: Tweaks needed in new regime
“A healthy household savings rate is vital for a developing economy like India. The objective of introducing new tax regime was simplicity via lower tax rates and fewer deductions to avoid administrative efforts of verifying the claims.
Simplicity of allowing deductions can be achieved for example US and UK rely on a limited set of tax-favored instruments, with compliance driven by institution-level reporting rather than taxpayer claims. India too can explore this model by retaining a focused savings incentive within the new regime. It could be a streamlined version of Section 80C deduction permitted under the new regime with a higher limit say of INR 300,000 based on investments automatically reflected in the Annual Information Statement.
Tax incentive linked investment leads to limiting investment opportunities rather than allowing market forces to take over. This delinking and simplifying claims verification based on institutional reporting could meet both the purposes of simplifying tax administration and promoting savings,” Ravi Jain, Partner, Vialto Partners tells TOI.
Simplicity of allowing deductions can be achieved for example US and UK rely on a limited set of tax-favored instruments, with compliance driven by institution-level reporting rather than taxpayer claims. India too can explore this model by retaining a focused savings incentive within the new regime. It could be a streamlined version of Section 80C deduction permitted under the new regime with a higher limit say of INR 300,000 based on investments automatically reflected in the Annual Information Statement.
Tax incentive linked investment leads to limiting investment opportunities rather than allowing market forces to take over. This delinking and simplifying claims verification based on institutional reporting could meet both the purposes of simplifying tax administration and promoting savings,” Ravi Jain, Partner, Vialto Partners tells TOI.
06:10 (IST) Feb 01
Income Tax Slabs Budget 2026: Making tax filing easier
“The next phase of improvement in the e-filing experience will likely come from strengthening the digital infrastructure (such as the website, servers, and support tools) taxpayers use. Better integration of data from banks, employers and other stakeholders can minimise mismatches and reduce manual intervention. In addition, real-time tracking and quick digital clarifications, so taxpayers can respond instantly to portal queries, would streamline compliance and ease anxiety during peak filing periods. Overall, the focus should be on predictability, transparency and convenience, making the system easier to navigate for both salaried individuals and the wider taxpayer base,” says Surabhi Marwah, Tax Partner, EY India.
06:05 (IST) Feb 01
Income Tax Budget 2026 Live: Tax compliance & scrutiny
“Over the last couple of years, the Indian tax administration is increasingly using AI enabled tools for cross verifying income declarations and deduction claims made by taxpayers in the tax return vis-à-vis details reported by the employer, financial institutions and any other third party. This is leading to automated alerts sent to taxpayers for reconfirmation of income reporting and deduction. Consequently, it has understandably created an apprehension around opting for the old tax regime. The new regime offers simplicity whereas the old regime remains relevant for taxpayers who incur significant expenses such as house rent, interest on housing or education loans etc. Where the old regime is beneficial, salaried taxpayers should declare it to their employer and submit the required proofs. This helps align the taxable income reported by the employer with the income declared in the return, thereby reducing the risk of mismatches and follow-up queries,” Nishant Kumar, Partner, Vialto Partners tells TOI.
05:56 (IST) Feb 01
Income Tax Budget 2026 Live: Should Section 80C limit be hiked?
Section 80C as an exemption is available only under the old income tax regime. The limit for it is Rs 1.5 lakh, and it includes investment options like provident fund, public provident fund (PPF), mutual fund investment schemes etc.
05:56 (IST) Feb 01
Income Tax Budget 2026 Live: What are income tax slabs under old tax regime?
Under the old income tax regime for FY 2025–26, resident individuals up to 60 years of age do not pay any tax on income up to Rs 2.5 lakh, while income between Rs 2.5 lakh and Rs 5 lakh is taxed at 5%. Earnings in the Rs 5 lakh to Rs 10 lakh range attract a tax rate of 20%, and any income above Rs 10 lakh is taxed at the highest slab rate of 30%.
05:56 (IST) Feb 01
Income Tax Budget 2026 Live: What is the standard deduction?
Standard deduction is an important deduction that is available for salaried taxpayers. It’s also important to understand the income level up to which you have to pay ZERO taxes. For example, under the new tax regime, with a Rs 75,000 standard deduction, salaried taxpayers have to pay NIL tax till Rs 12.75 lakh.
05:56 (IST) Feb 01
Income Tax Budget 2026 Live: Income Tax Slabs Under New regime
Under the new income tax regime for FY 2025–26, income up to Rs 4 lakh is fully exempt from tax, while earnings between Rs 4 lakh and Rs 8 lakh are taxed at 5%. Income in the Rs 8 lakh to Rs 12 lakh bracket attracts a 10% tax rate, which rises to 15% for income between Rs 12 lakh and Rs 16 lakh and further to 20% for earnings from Rs 16 lakh to Rs 20 lakh. Those with income between Rs 20 lakh and Rs 24 lakh are taxed at 25%, and any income above Rs 24 lakh is taxed at the highest rate of 30%.
05:56 (IST) Feb 01
Income Tax Budget 2026 Live: How does the New Income Tax benefit?
“The Government has stated at multiple forums that the New Income Tax Act, 2025 does not intend to have any major policy changes. In fact the intent was simplification of language and thereby consequently reducing the interpretation difficulties and challenges which may have resulted in protected litigation.
For effective implementation, all relevant e-Forms, rules, and updated section references should ideally be ready much in advance to March 2026. This will pave the road for ease of compliance and minimize transition challenges,” says Parizad Sirwalla, Partner and Head, Global Mobility Services, Tax, KPMG in India.
For effective implementation, all relevant e-Forms, rules, and updated section references should ideally be ready much in advance to March 2026. This will pave the road for ease of compliance and minimize transition challenges,” says Parizad Sirwalla, Partner and Head, Global Mobility Services, Tax, KPMG in India.
Income Tax Budget 2026 Highlights: Middle class and salaried taxpayers always follow Finance Minister Nirmala Sitharaman’s Union Budget speech, hoping for additional tax relief. In the previous Budget, the FM completely revamped the new income tax regime. Experts always believed that Budget 2026 offered limited fiscal headroom for sweeping tax changes.
Latest Income tax slabs FY 2026-2027 under new tax regime
What will be the income tax slabs for FY 2026-2027 after the Budget? There are no changes in the old or the new tax regime. Under the current new tax regime, income up to Rs 4 lakh is exempt, setting the basic exemption limit at Rs 4 lakh.
Income between Rs 4 lakh and Rs 8 lakh is taxed at 5%, while earnings in the Rs 8 lakh to Rs 12 lakh range attract a 10% rate.
Income from Rs 12 lakh to Rs 16 lakh is taxed at 15%, which rises to 20% for income between Rs 16 lakh and Rs 20 lakh, and further to 25% for income in the Rs 20 lakh to Rs 24 lakh bracket.
Any income exceeding Rs 24 lakh is taxed at 30%, the highest slab rate under the new income tax regime.
Section 87A rebate
Currently, income up to Rs 12 lakh - Rs 12.75 lakh in the case of salaried individuals - is effectively tax-free after accounting for the Section 87A rebate. A big number of taxpayers continue to opt for the old tax regime and were seeking lower tax rates and a higher basic exemption limit under that system as well.
Standard deduction
Standard deduction allows for a simple deduction with no need for paperwork or furnishing proofs. It is a deduction available for salaried taxpayers. However, the limit for standard deduction varies between the old and the new income tax regime.
Those under the old income tax regime can avail Rs 50,000 standard deduction, while those under the new income tax regime have the advantage of Rs 75,000 standard deduction.
Home loan interest
Under the old tax regime, individuals can claim a deduction on interest paid on a home loan. For a self-occupied residential property, interest payments of up to Rs 2 lakh per year, or the actual interest paid if lower, can be deducted from taxable income. Tax experts had suggested that extending this benefit to the new tax regime could provide a meaningful boost to the housing sector, but no such relief was announced.
Section 80C
Section 80C remains one of the most widely used deductions under the old tax regime, but its Rs 1.5 lakh limit has not been revised for several years. This deduction covers investments in instruments such as provident fund, public provident fund (PPF), mutual funds and other common savings avenues.
Latest Income tax slabs FY 2026-2027 under new tax regime
What will be the income tax slabs for FY 2026-2027 after the Budget? There are no changes in the old or the new tax regime. Under the current new tax regime, income up to Rs 4 lakh is exempt, setting the basic exemption limit at Rs 4 lakh.
Income between Rs 4 lakh and Rs 8 lakh is taxed at 5%, while earnings in the Rs 8 lakh to Rs 12 lakh range attract a 10% rate.
Income from Rs 12 lakh to Rs 16 lakh is taxed at 15%, which rises to 20% for income between Rs 16 lakh and Rs 20 lakh, and further to 25% for income in the Rs 20 lakh to Rs 24 lakh bracket.
Any income exceeding Rs 24 lakh is taxed at 30%, the highest slab rate under the new income tax regime.
Section 87A rebate
Currently, income up to Rs 12 lakh - Rs 12.75 lakh in the case of salaried individuals - is effectively tax-free after accounting for the Section 87A rebate. A big number of taxpayers continue to opt for the old tax regime and were seeking lower tax rates and a higher basic exemption limit under that system as well.
Standard deduction
Standard deduction allows for a simple deduction with no need for paperwork or furnishing proofs. It is a deduction available for salaried taxpayers. However, the limit for standard deduction varies between the old and the new income tax regime.
Those under the old income tax regime can avail Rs 50,000 standard deduction, while those under the new income tax regime have the advantage of Rs 75,000 standard deduction.
Home loan interest
Under the old tax regime, individuals can claim a deduction on interest paid on a home loan. For a self-occupied residential property, interest payments of up to Rs 2 lakh per year, or the actual interest paid if lower, can be deducted from taxable income. Tax experts had suggested that extending this benefit to the new tax regime could provide a meaningful boost to the housing sector, but no such relief was announced.
Section 80C
Section 80C remains one of the most widely used deductions under the old tax regime, but its Rs 1.5 lakh limit has not been revised for several years. This deduction covers investments in instruments such as provident fund, public provident fund (PPF), mutual funds and other common savings avenues.
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