Understanding the New Tax Regime: FY26 Budget Rates Unveiled

The FY26 Budget has introduced revised income tax slabs, with rates ranging from nil for incomes up to Rs 12 lakh to 30% for earnings above Rs 24 lakh. The new regime aims to simplify the tax structure, providing a standard deduction of Rs 75,000 for salaried individuals.

The recent FY26 Budget has unveiled a streamlined tax regime, introducing revised income slabs for taxpayers. The new structure ranges from nil tax for those with an annual income up to Rs 12 lakh, to a maximum of 30% for incomes exceeding Rs 24 lakh.

For the salaried class, an attractive standard deduction of Rs 75,000 is offered, effectively raising the no-tax threshold to Rs 12.75 lakh. The changes aim to simplify tax processes while offering some relief to middle-income groups.

Revised categories include a 5% rate for Rs 4 to 8 lakh, 10% for Rs 8 to 12 lakh, 15% for Rs 12 to 16 lakh, and 20% for Rs 16 to 20 lakh, culminating in a 25% levy for those earning between Rs 20 and 24 lakh. The government seeks to encourage compliance with these structured changes.