New Income Tax act to come into effect from April 1

Union Finance Minister Nirmala Sitharaman presented her 9th Budget in a row in Lok Sabha on Sunday February 1.  Sitharaman announced that the new Income Tax Act will come into effect from April 1, 2026. However, opposite to taxpayers' expectations, Sitharaman did not announce any changes to the income tax slabs this year.Sitharaman also proposed that the deadline to file I-T returns will be extended from December 31 to March 31, on payment of nominal fee. The finance minister also proposed to reduce the TCS (Tax Collected at Source) rate from 5 per cent to 2 per cent for education and medical education under the liberalised remittance scheme. Further, she stated that the TCS rate on the sale of overseas tour packages will also be cut to 2 per cent from 5 per cent. Earlier, the rate was 20 per cent.No changes in Income Tax slabs 2026: Tax slabs under new tax regime:
- ₹0 to ₹4 lakh: Nil
- ₹4 to ₹8 lakh: 5%
- ₹8 to ₹12 lakh: 10%
- ₹12 to ₹16 lakh: 15%
- ₹16 to ₹20 lakh: 20%
- ₹20 to ₹24 lakh: 25%
- Above 24 lakh: 30%
Over the years, the income tax system has undergone significant changes. In the post-Independence era, income tax had 11 tax slabs, and currently, there are just seven tax slabs under the New Tax Regime, introduced in the Union Budget 2025.