6 Feb 2026Quick answer: Budget 2026 (1 February 2026) did not change the income tax slabs, and income up to ₹12 lakh (₹12.75 lakh for salaried taxpayers) remains tax-free under the new regime. The changes that matter for individuals are a later ITR due date of 31 August for non-audit business and professional returns, more time to revise a return, TCS cut to 2% on overseas tour packages and on education and medical remittances, buybacks taxed as capital gains, and the new Income-tax Act, 2025 in force from 1 April 2026.
Updated: 23 October 2026 | Regi Tom Antony & Associates, Chartered Accountants, Kochi
Did Budget 2026 change income tax slabs?
No. The new-regime slabs introduced by the Finance Act 2025 continue for tax year 2026-27 (income earned from 1 April 2026):
| Income | Tax rate (new regime) |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 to ₹8,00,000 | 5% |
| ₹8,00,001 to ₹12,00,000 | 10% |
| ₹12,00,001 to ₹16,00,000 | 15% |
| ₹16,00,001 to ₹20,00,000 | 20% |
| ₹20,00,001 to ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
The rebate of up to ₹60,000 (section 87A of the 1961 Act, section 156 of the 2025 Act) makes income up to ₹12 lakh tax-free, and the ₹75,000 standard deduction takes that to ₹12.75 lakh for salaried taxpayers and pensioners.
The rebate does not cover capital gains taxed at special rates
The rebate applies only to tax on income at normal slab rates. It cannot be set off against tax on short-term gains on listed equity (20%), long-term gains on equity above ₹1.25 lakh (12.5%), or other long-term capital gains (12.5%). Someone with ₹10 lakh salary and ₹3 lakh short-term equity gains pays nil on the salary but 20% on the gains, about ₹60,000 plus cess. This is one of the most common errors in self-filed returns.
What are the new ITR due dates after Budget 2026?
| Return | Due date |
|---|---|
| ITR-1 and ITR-2 (salary, house property, capital gains) | 31 July |
| Business or profession, no tax audit (ITR-3, ITR-4) | 31 August (from AY 2026-27) |
| Tax audit cases | 31 October; for AY 2026-27 extended to 21 November 2026 |
| Revised return | Up to 12 months from the end of the tax year (31 March), with a fee if filed after the ninth month |
Before Budget 2026 a revised return had to be filed by 31 December, the same date as a belated return, which left no way to correct a mistake in a belated return. The new 12-month window applies from AY 2026-27.
Other Budget 2026 changes for individuals
- TCS on foreign remittances: overseas tour packages now attract a flat 2%, and education and medical remittances above ₹10 lakh attract 2% instead of 5%. Other LRS remittances remain free up to ₹10 lakh a year and 20% above. See our guide to TCS on foreign remittances.
- Share buybacks: buyback proceeds are taxed as capital gains instead of dividend income, with an additional tax for promoters.
- Sovereign Gold Bonds: the tax exemption on redemption applies only to bonds bought at original issue and held until redemption, not to bonds bought on the stock exchange.
- Dividend and mutual fund income: the deduction for interest expense against this income has been removed.
- Futures and options: securities transaction tax on futures and options has been increased.
- Form 15G and 15H: can now be filed through depositories for securities income.
What changes with the Income-tax Act, 2025?
From 1 April 2026 the Income-tax Act, 2025 replaces the 1961 Act. "Previous year" and "assessment year" are replaced by a single "tax year", and sections are renumbered: for example, the new-regime provisions are in section 202 and the rebate in section 156. Income earned up to 31 March 2026 (AY 2026-27) is still assessed under the 1961 Act. Read our guide: what changes under the Income-tax Act, 2025.
Who should still consider the old regime?
The new regime is the default. The old regime can still be better where deductions and exemptions are large, typically above about ₹3.75 lakh: HRA, section 80C investments (₹1.5 lakh), section 80D health insurance, home loan interest on a self-occupied house (up to ₹2 lakh) and the additional ₹50,000 NPS deduction. Salaried taxpayers choose their regime each year in the return. Taxpayers with business or professional income must exercise the option separately, and can switch back only once.
What should you do now?
- Compare both regimes on your actual income, deductions and capital gains.
- Apply the rebate only against slab-rate tax, not capital gains at special rates.
- Pay advance tax for tax year 2026-27 by 15 December 2026 and 15 March 2027 to avoid interest.
- Check your AY 2026-27 return: if you spot an error, the revised-return window now runs to 31 March 2027.
Frequently asked questions
Did Budget 2026 change income tax slabs?
No. The new-regime slabs and the ₹12 lakh tax-free limit are unchanged for tax year 2026-27.
What is the ITR due date for non-audit business income after Budget 2026?
31 August, instead of 31 July, from AY 2026-27. ITR-1 and ITR-2 filers still have until 31 July.
Until when can I revise my income tax return?
Up to 12 months from the end of the tax year, which is 31 March of the following year. A fee applies if you revise after the ninth month.
Regi Tom Antony & Associates is a Chartered Accountant firm in Kakkanad, Kochi, advising individuals and business owners on regime comparison, capital gains and ITR filing. For a computation tailored to your income, write to letstalk@rtaandassociates.com.
Sources: Finance Act, 2026; Budget 2026 highlights. General information, not advice on your specific facts.