Union Finance Minister Nirmala Sitharaman presented the Union Budget 2026-27 on February 1, pitching growth and higher public spending. She offered no relief on personal income tax. The government kept income tax slabs unchanged under both the new and old tax regimes, extending a policy that has now held for another year.
For salaried taxpayers facing rising household costs, the Budget delivered certainty, not comfort.
Sitharaman announced no changes to income tax rates, exemption limits, or surcharge structures in her Budget speech. The new tax regime continues as the default option. Taxpayers can still opt for the old regime while filing returns.
Officials said the government wants to maintain stability in taxation while raising capital expenditure to Rs. 12.2 lakh crore in FY 2026-27.
Unchanged tax slabs increase the real tax burden. As salaries rise to match inflation, taxpayers move into higher tiers without any increase in exemption thresholds.
“Prices go up every year, but tax slabs stay frozen,” said a Hyderabad-based IT professional. “That hurts.”
The new tax regime exempts income up to Rs. 4 lakh and applies rates up to 30% for income above Rs. 24 lakh. The old regime keeps deductions such as 80C, HRA, and home loan interest.
Tax advisors say taxpayers must now choose based on cash flows and long-term commitments, not policy incentives.
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The Centre prioritized fiscal discipline and infrastructure spending. Strong direct tax collections reduced pressure to announce relief. The government chose predictability over short-term appeasement.
Experts advise taxpayers to calculate liabilities under both regimes early, adjust investments, and plan cash flows carefully. With Budget 2026, the government passed the key tax decision back to taxpayers.