Assessment Year 2026‑27 onwards (FY 2025‑26 onwards)
| Taxable Income (₹) | 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% |
Surcharge: As per slab: 10% (₹50L‑₹1Cr), 15% (₹1‑2Cr), 25% (above ₹2Cr excluding dividend/cap gains), max 15% on capital gains/dividends. (H & E cess @4% applies). :contentReference[oaicite:1]{index=1}
Rebate under Section 87A: Up to ₹25,000 for total income ≤ ₹7 L (AY 2026‑27); up to ₹60,000 for income ≤ ₹12 L from AY 2027‑28 onwards :contentReference[oaicite:2]{index=2}.
Tax slabs based on age as per First Schedule remain unchanged. No revisions announced for old regime. :contentReference[oaicite:3]{index=3}
| Provision | Existing Rate / Threshold | Proposed Rate / Threshold |
|---|---|---|
| Section 194LBC (securitization trust) | 25% (Ind/HUF), 30% (others) | 10% |
| Section 206C(1)(i)/(ii) – timber etc. | 2.5% | 2% |
| Section 206C(1G) – LRS remittance for education | 0.5% above ₹7L | Nil |
| Section 194A – Interest (senior citizens) | ₹50,000 | ₹1,00,000 |
| Section 194A – Interest (others) | ₹40,000/₹5,000 | ₹50,000/₹10,000 |
| Section 194 (Dividend income) | ₹5,000 | ₹10,000 |
| Section 194K (Mutual fund) | ₹5,000 | ₹10,000 |
| Section 194B/C/BB/D/H/I/J/LA | ₹10,000‑₹2,50,000 varies | Thresholds raised (₹20,000‑₹5,00,000 as applicable) |
Section 206C(1H) deleted; Section 206AB & 206CCA omitted. Prosecution under Section 276BB waived if TCS paid before quarterly statement date :contentReference[oaicite:4]{index=4}.
Extended time‑limit for filing updated return (Sec 139(8A)): Up to 48 months instead of 24 months from end of relevant AY :contentReference[oaicite:5]{index=5}.
Presumptive tax for non-residents (Sec 44BBD): 25% on aggregate receipts/profits for technology/services to Indian company (from 01‑04‑2026).
MSME criteria revised: Micro: Investment ₹2.5Cr / Turnover ₹10Cr; Small: ₹25Cr / ₹100Cr; Medium: ₹125Cr / ₹500Cr (from 01‑04‑2025).
Several rationalisations: section 13(3) contribution limits, section 115UA inclusion of Sec 112/112A, clarification of economic presence under section 9, capital assets definition under 2(14), ULIP redemption taxation, loss carry‑forward limit under sections 72A/72AA, extended timelines under Chapter XIV‑B, penalty time‑limits under Sec 275, etc.
Deduction under Section 80CCD extended to NPS Vatsalya contributor for minors; NSS withdrawals exempted under Section 80CCA; self‑occupied property annual value rules simplified; certain penalties shifted to Assessing Officer; IFSC insurance proceeds exempted under Sec 10(10D) etc.