New Tax Rules for FY 2026–27: Key Changes Every Salaried Employee Must Know

The Union Budget 2026 brought significant changes to the income tax framework. Whether you’re a salaried employee, freelancer, or small business owner, these changes will affect your finances starting April 2026.

New Tax Slabs Under New Regime (FY 2026–27)

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%

Key Changes

1. Standard Deduction Increased to ₹1,00,000

The standard deduction for salaried employees has been increased from ₹75,000 to ₹1,00,000 under the new regime.

2. Section 80C Limit Enhanced

The 80C deduction limit has been raised to ₹2,00,000 under the old regime, giving more room for ELSS, PPF, and life insurance investments.

3. NPS Employer Contribution

Employer NPS contributions up to 14% of basic salary (up from 10%) are now tax-exempt under both regimes.

4. Capital Gains Tax Simplified

• Short-term capital gains (equity): 20% (up from 15%)
• Long-term capital gains (equity): 12.5% above ₹1.25 lakh

Which Regime Should You Choose?

Use our Tax Calculator to compare both regimes based on your specific income and deductions. As a rule of thumb: if your total deductions exceed ₹4 lakh, the old regime may still be better.

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