Executive Summary#
Union Budget 2025-26 was presented on February 1, 2026, with a focus on simplifying taxation and boosting economic growth. Here are the key changes affecting individuals and businesses.
Income Tax Highlights#
Standard Deduction Increased#
The standard deduction for salaried individuals has been increased from Rs 50,000 to Rs 75,000 under the new tax regime.
New Tax Regime Made Permanent#
The new tax regime is now the default option for all taxpayers. Key points:
- No changes to tax slab rates
- Higher rebate limit under Section 87A (now Rs 60,000)
- Simplified compliance requirements
Tax Slabs - New Regime (FY 2025-26)#
| Income Range | Tax Rate |
|---|---|
| Up to Rs 3,00,000 | Nil |
| Rs 3,00,001 - Rs 7,00,000 | 5% |
| Rs 7,00,001 - Rs 10,00,000 | 10% |
| Rs 10,00,001 - Rs 12,00,000 | 15% |
| Rs 12,00,001 - Rs 15,00,000 | 20% |
| Above Rs 15,00,000 | 30% |
Key Changes for Businesses#
- Corporate tax rate maintained at 25% for existing companies
- Start-up tax benefits extended till March 31, 2027
- Simplified compliance with reduced filing requirements
What This Means For You#
If you're a salaried employee earning up to Rs 12 lakh, you may pay zero tax under the new regime with the increased standard deduction. Review your tax planning to maximize savings.
Key Takeaways#
- Standard deduction increased to Rs 75,000
- New tax regime is now default
- Rebate limit increased to Rs 60,000
- Start-up benefits extended
Consult a tax expert to optimize your tax planning based on these changes.