N※N

Budget 2026: Income Tax Overhaul Announced

  //business-finance.news-articles.net/content/202 .. 2/budget-2026-income-tax-overhaul-announced.html
  Published in Business and Finance on Thursday, February 12th 2026 at 0:55 GMT by moneycontrol.com
      Locales:

Budget 2026: Income Tax Landscape Reshaped - A Detailed Analysis

New Delhi, February 12th, 2026 - The Union Budget 2026, unveiled today, delivers a significant overhaul of India's income tax system, offering potential relief to taxpayers across various income brackets. Finance Minister announced a series of revisions impacting income tax slabs, standard deduction, long-term capital gains (LTCG) tax, and security transaction tax (STT). These changes, effective immediately, aim to simplify the tax structure, incentivize investment, and boost economic growth.

New Income Tax Slabs: A Progressive Shift

The most impactful change is the restructuring of income tax slabs. The new slabs, revealed at 14:30 IST, are designed to be more progressive, offering a higher degree of tax relief to lower and middle-income earners. The revised slabs are as follows:

• Up to INR3,00,000: Nil tax
• INR3,00,001 - INR6,00,000: 5% tax
• INR6,00,001 - INR9,00,000: 10% tax
• INR9,00,001 - INR12,00,000: 15% tax
• INR12,00,001 and above: 20% tax

This represents a substantial shift from the previous slabs and is expected to increase disposable income for a large segment of the population. Experts predict this will stimulate consumer spending and contribute to overall economic activity. A detailed analysis by our in-house tax specialists reveals that individuals earning up to INR9,00,000 will experience a significant reduction in their tax liability.

Standard Deduction Enhanced: Relief for Salaried Individuals

In a move welcomed by salaried individuals, the standard deduction has been increased to INR1,00,000 (announced at 14:45 IST). This deduction, applicable to all salaried taxpayers, provides a flat deduction from gross salary, reducing the taxable income. The increase provides much-needed relief in light of rising living costs and aims to simplify the tax filing process for millions of employees.

LTCG Tax Regime Refined: Encouraging Long-Term Investment

The government has also addressed concerns surrounding the Long-Term Capital Gains (LTCG) tax regime. The revisions, unveiled at 15:00 IST, involve a reduction in tax rates for capital assets held for periods exceeding 24 months. While the specifics of the reduced rates weren't immediately disclosed, sources indicate the aim is to encourage long-term investment in equity markets and other capital assets. This move is expected to benefit investors who have held assets for extended periods, fostering a more stable and mature investment landscape. The reduction is rumored to be tiered, with progressively lower rates for longer holding periods.

STT Rates Reduced: Boosting Market Liquidity

Recognizing the importance of a vibrant equity market, the Finance Minister announced a reduction of 1% in Security Transaction Tax (STT) rates on equity transactions (announced at 15:15 IST). STT is a tax levied on all transactions done on stock exchanges. The reduction is expected to lower transaction costs, making equity investments more attractive and increasing market liquidity. Market analysts predict that this could lead to a surge in trading volumes and attract more retail investors.

Expert Commentary and Future Implications

"These changes are a clear indication of the government's commitment to simplifying the tax system and promoting economic growth," commented Dr. Anika Sharma, Senior Economist at MacroView Research. "The revised income tax slabs and increased standard deduction will put more money in the hands of consumers, while the changes to LTCG tax and STT rates will encourage investment and boost market activity."

However, some experts caution that the long-term impact of these changes will depend on various factors, including inflation and global economic conditions. Further analysis is underway to assess the potential impact on government revenue and the overall fiscal deficit. The government has also indicated that it will continue to monitor the tax landscape and make further adjustments as needed.

Official Sources for Accurate Information

While this article provides a comprehensive overview of the Budget 2026's impact on income tax, it's crucial to refer to official sources for accurate and updated information. The official website of the Income Tax Department ([ https://www.incometax.gov.in/ ]) and the Ministry of Finance ([ https://www.finance.gov.in/ ]) will provide detailed notifications and clarifications regarding these changes.