New Tax Regime vs Old Tax Regime 2026: Finance Minister Nirmala Sitharaman will present her ninth consecutive Union Budget in Parliament today. There is greater focus expected on sector-wise allocations, updates on income tax, and measures the Central Government may adopt to scale exports.
New Tax Regime vs Old Tax Regime 2026
| Category | Budget 2025 (Last Year’s Reality) | Budget 2026 (This Year’s Expectations) |
| Personal Tax | Major Overhaul: Basic exemption raised to ₹4 lakh. Incomes up to ₹12 lakh (₹12.75 lakh for salaried) made tax-free via rebates. | Fine-tuning: Expectations for a Standard Deduction hike from ₹75k to ₹1 lakh and relief on health insurance premiums. |
| Slab Changes | Significant restructuring of New Tax Regime slabs to make it more attractive. | Slabs are expected to remain stable; focus may shift to rationalizing the 30% peak tax rate. |
| Fiscal Deficit | Achievement of 4.8% and target set for 4.4% for the following year. | Focus on maintaining the glide path toward 4% by FY27 despite global volatility. |
| Capital Gains | Rationalized holding periods and increased LTCG tax from 10% to 12.5%. | Demands to increase the tax-free LTCG limit from ₹1.25 lakh to ₹2 lakh. |
| Infrastructure | Huge push in Capex (approx. ₹11.11 lakh crore) focusing on railways and roads. | Expected 10–15% increase in Capex, focusing on Deep-tech, AI, and Green Hydrogen. |
| Rural/Agri | Focus on PM-Kisan and organic farming initiatives. | Focus on Climate-Resilient seeds and expanding post-harvest storage (PM Dhan-Dhaanya). |
Budget 2026 income tax changes: Income tax slabs Budget 2026
As today, a key focus will be on income tax announcements and income tax slabs Budget 2026. The FM is expected to make few announcements regarding income tax slabs, but taxpayers are hoping for more tax relief and income tax slab new tax regime 2026 changes.
Budget may not announce major decisions in terms of income tax but taxpayers are hoping for benefits.
Income Tax Slabs and rates: Old vs new regime changes
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Up to ₹2,50,000: No tax
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₹2,50,001 – ₹5,00,000: 5%
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₹5,00,001 – ₹10,00,000: 20%
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Above ₹10,00,000: 30%
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Up to ₹4,00,000: No tax
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₹4,00,001 – ₹8,00,000: 5%
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₹8,00,001 – ₹12,00,000: 10%
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₹12,00,001 – ₹16,00,000: 15%
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₹16,00,001 – ₹20,00,000: 20%
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₹20,00,001 – ₹24,00,000: 25%
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Above ₹24,00,000: 30%
Union Budget 2026: Focus on Infrastructure Sector
Infrastructure investment acts as the backbone of economic development — it improves mobility, supports industries, creates jobs, reduces logistics costs and strengthens connectivity between regions and markets. Budget 2026 is expected to reinforce this focus through planned spending, policy support, and reforms.
Roads and Railways Budget 2026 Expectations
The Union Budget 2026 is expected to continue a strong focus on infrastructure by increasing government spending to support economic growth and job creation. More funds are likely to be allocated for roads and highways, including expressways, national highways, bypasses, and logistics corridors, to improve travel and goods movement. The railway sector is also expected to receive steady support for modernisation, capacity expansion, safety improvements, and better connectivity across regions.
At the same time, the government may boost urban development through investments in smart cities, water supply, utility services, and modern transport hubs. To speed up project execution, greater emphasis is expected on public-private partnerships (PPP) and asset monetisation to attract private investment. Overall, the focus will be on strengthening logistics and connectivity by improving road-rail links, freight corridors, and port access, helping reduce transport costs and making Indian businesses more competitive.
Defence Budget 2026 Expectations
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Higher Spending: Defence allocation is expected to rise to strengthen security and military readiness.
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Capital Expenditure: More funds for new equipment, aircraft, ships, missiles, and modernisation.
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Self-Reliance: Focus on boosting domestic defence manufacturing and private sector participation.
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R&D & Technology: Increased funding for AI, drones, electronic warfare, and advanced weapons systems.
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Exports: Support for defence exports to global markets.
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Modernisation & Readiness: Continued upgrades in infrastructure, procurement, and operational readiness.
Also Read: Sensex, Nifty open nearly flat on Budget Day as Investors await key Fiscal Cues
