---
title: "New Tax Rules for FY 2026–27: Key Changes Every Salaried Employee Must Know"
description: "Budget 2026 introduced several tax changes affecting your take-home pay. From revised slabs to new deductions — here's your complete guide."
author: "jordan-wells"
published: "2026-04-27T00:00:00.000Z"
tags: ["personal-finance","economy"]
canonical: "https://smartmoney.report/blog/posts/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](/tools) 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.