Archive · 3 Jan 2026
Budget 2026 May Favor New Tax Regime
The Indian government is likely to make the New Tax Regime even better in the next budget.
Last year, they raised the amount of money you can earn without paying taxes to Rs 4 lakh.
This means many people, especially those earning between Rs 7.5 lakh and Rs 25 lakh, pay less tax now.
More people are choosing this new system because it's simpler and saves them money.
The government wants most people to use this new system in the future.
Next year's budget might make it even more attractive.
Budget 2025 raised the basic exemption limit under the New Tax Regime to Rs 4 lakh, benefiting salaried taxpayers.
72% of income tax returns in AY 2024-25 were filed under the New Tax Regime, indicating a significant shift.
The New Tax Regime offers higher standard deductions and eliminates tax for incomes up to Rs 12.75 lakh.
Middle-income earners (Rs 7.5 lakh to Rs 25 lakh) see the most significant tax savings under the New Regime.
Budget 2026 is expected to further strengthen the New Tax Regime, potentially making it the default system.
- Who
- Indian taxpayers, Finance Minister Nirmala Sitharaman
- What
- Potential further push for the New Tax Regime in Budget 2026
- When
- Budget 2026 (upcoming), Budget 2025 (recent)
- Where
- India
- Why
- To simplify the tax system and provide relief to middle-income earners
- Basic Exemption Limit (New Regime 2025)
- Rs 4 lakh
- Standard Deduction (New Regime 2025)
- Rs 75,000
- Tax-Free Income Cap (New Regime 2025)
- Rs 12.75 lakh
- New Regime Adoption (AY 2024-25)
- 72% of returns
- Old Regime Adoption (AY 2024-25)
- 28% of returns
- 30% Tax Bracket Threshold (New Regime 2025)
- Above Rs 24 lakh
- Tax Savings at Rs 15 lakh (New vs Old)
- Rs 36,400
- Tax Savings at Rs 25 lakh (New vs Old)
- Rs 1.14 lakh
