New Delhi: Finance minister Nirmala Sitharaman, in her ninth consecutive Union Budget speech, retained the new income tax regime slabs while announcing major relief, making income up to ₹12 lakh tax-free for salaried individuals after rebate. She hailed GST reforms for boosting collections to ₹1.93 lakh crore in January and proposed key tweaks for NBFCs to enhance credit flow.
Under the new regime for FY 2026-27 (AY 2027-28), slabs remain: 0% up to ₹4 lakh, 5% (₹4-8 lakh), 10% (₹8-12 lakh), 15% (₹12-16 lakh), 20% (₹16-20 lakh), and 30% above ₹20 lakh. Key highlights include full rebate u/s 87A up to ₹12 lakh income (zero tax liability), standard deduction hiked to ₹1 lakh from ₹75,000, and Section 80C limit raised to ₹2 lakh. Salaried taxpayers with ₹15 lakh income now face nil or minimal tax, saving up to ₹1.14 lakh versus old regime.
Old regime unchanged: 0% up to ₹2.5 lakh, 5% (₹2.5-5 lakh), 20% (₹5-10 lakh), 30% above. No shift to joint ITR filing yet, but FM emphasised simplification via new Income Tax Act 2025 transition.
Sitharaman praised GST 2.0 for rate rationalisation, reducing slabs and inverted duty issues, easing ITC utiliation for businesses. Gross collections up 6.2% YoY; proposals include faster refunds, post-sale discount ease, and intermediary supply rules aligned to recipient location. These steps aim to cut compliance costs and boost MSME growth.
To aid NBFCs, the finance minister proposed credit guarantee for microfinance, NHB-like refinance facility, and SARFAESI threshold cut to ₹1 lakh from ₹20 lakh for faster recoveries. These target liquidity stress, MSME lending, and rural credit amid 7-7.5% GDP growth outlook.
Middle-class gains disposable income boost amid inflation; businesses benefit from GST stability and NBFC liquidity. Experts note calibrated relief avoids fiscal slippage (target 4.2% deficit), focusing Viksit Bharat via infra, AI, jobs. Filings due April 2027; use calculators for personalised impact.
