What Changed in Budget 2026 — Income Tax?
Finance Minister presented Union Budget 2026 with major relief for middle class taxpayers. The new tax regime now offers zero income tax up to ₹12 lakh annual income via enhanced Section 87A rebate. This is the most significant personal income tax relief since the introduction of the new tax regime in 2020.
New Tax Slabs AY 2026-27 (New Regime)
| Income Slab | Tax Rate |
|---|---|
| Up to ₹4,00,000 | NIL |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Zero Tax under Section 87A — How?
If your total income (after standard deduction of ₹75,000) does not exceed ₹12 lakh, your tax liability is reduced to ZERO via Section 87A rebate. This means:
- Gross income up to ₹12,75,000 = Zero net tax (after ₹75,000 standard deduction)
- No surcharge or cess on zero tax
- This benefit is available ONLY in the new tax regime
Standard Deduction Increased to ₹75,000
Standard deduction for salaried employees and pensioners has been increased from ₹50,000 to ₹75,000 under the new regime. This directly reduces your taxable income.
New Regime vs Old Regime — Which is Better?
Old regime benefits you if your deductions (80C + HRA + home loan + 80D) exceed ₹3.75 lakh. New regime is better for those with minimal deductions or income below ₹12 lakh. Use our free Income Tax Calculator to compare both regimes instantly.
ITR Filing Deadline AY 2026-27
July 31, 2026 for non-audit cases. September 30, 2026 for audit cases. Late filing fee: ₹5,000 (₹1,000 if income below ₹5 lakh). File your ITR with Monitrix CA team — starting ₹999.
💡 Monitrix Tip: Don't wait for last date. Early filing means early refund, less stress and accurate computation. Our CA team files ITR in 1-3 working days.
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