At a glance
- •Standard deduction: ₹75,000 → ₹85,000
- •New-regime 5% slab widened to ₹4-8 lakh
- •87A rebate cap raised to ₹8L net income
- •Sec 115BAB manufacturing sunset extended to 31-Mar-2028
- •LTCG indexation restored (optional) for pre-23-Jul-2024 property
The 2026 Budget continues the steady migration to the new regime as the default. The standard deduction has been increased from ₹75,000 to ₹85,000 for both salaried and pensioners. The new-regime slab grid is widened: the 5% bracket now spans ₹4–8 lakh (earlier ₹3–7L), 10% spans ₹8–12L, 15% spans ₹12–16L, 20% spans ₹16–20L, 25% spans ₹20–24L and 30% applies above ₹24L. The Section 87A rebate cap rises to ₹8L of net income (effectively zero tax for salaried up to ~₹8.85L).
On the corporate side, Section 115BAB (15% concessional rate for new manufacturing companies) sunset is extended by 2 years for units commencing production by 31 March 2028. The angel-tax exemption for DPIIT-recognised startups is broadened to include all closely-held resident issuers up to ₹50 crore of paid-up capital.
LTCG indexation is restored for property purchased before 23 July 2024 at the taxpayer's option — recognising the practical hardship the FY 2024-25 change caused legacy investors.