New Income Tax Slabs FY 2026-27: What Traders and Investors Need to Know

Budget 2026 did not change income tax slabs.

But it did change something that every active trader needs to understand, and the market reacted sharply on the day of the announcement.

Here is a complete breakdown of what stayed the same, what changed and what it means for you.

Income Tax Slabs FY 2026-27 — What Changed?

No changes to tax slabs or basic exemption limits. The slabs from Budget 2025 remain in force for FY 2026-27. The new tax regime continues as the default.

New Tax Regime Slabs — FY 2026-27 (AY 2027-28)

Key benefits under the new regime:

• Section 87A rebate of ₹60,000; income upto ₹12 lakh attracts zero tax.

• Standard deduction of ₹75,000 for salaried individuals & pensioners.

• Combined effect: A salaried person earning up to ₹12.75 lakh gross pays zero tax.

Old regime remains unchanged. Basic exemption ₹2.5 lakh. Still beneficial for taxpayers with significant HRA, home loan interest and 80C deductions.

The Biggest Budget 2026 Change for Traders — STT Hike on F&O

Budget 2026 delivered a steep hike in STT on F&O, effective April 1, 2026.

• STT on futures raised from 0.02% to 0.05%, a 150% increase.

• STT on options premium raised from 0.10% to 0.15%, a 50% increase.

• STT on options exercise standardised to 0.15%.

Since Budget 2023, futures STT has increased four times. Options STT has more than doubled.

What this means in practice:

STT is charged on every transaction, whether a profit or a loss. A trader executing 10 contracts per day pays an additional ₹3,000 in STT daily, roughly ₹75,000 per month.

For options, a Nifty call at ₹100 (contract value ₹6,500) earlier attracted ₹6.50 in STT. After the hike,

₹9.75 per trade.

The hike applies only to equity derivatives. Equity delivery & Mutual funds are unaffected.

Capital Gains Tax — No Change in Budget 2026

Capital gains tax rates are unchanged in Budget 2026.

Capital Gains Tax FY 2026-27:

How Is F&O Income Taxed?

F&O income is business income, not capital gains, taxed at your applicable slab rate. F&O losses can be

set off against other business income and carried forward for up to 8 years.

STT paid on F&O trades is deductible as a business expense when computing taxable income.

New vs Old Tax Regime — Which Works Better ?

This depends on your income structure and deductions.

New regime works better if:

• You do not claim large deductions, no HRA, limited 80C investments, no home loan.

• Your income is primarily from salary, business, or F&O trading.

• Your gross income is under ₹12.75 lakh (zero tax after rebate and standard deduction).

Old regime works better if:

• You pay significant HRA.

• You have a home loan with interest deduction.

• You invest heavily in 80C instruments — PPF, ELSS, NPS.

• Your total eligible deductions exceed approximately ₹4–5 lakh annually.

The break-even point where both regimes result in equal tax varies by income level. Use the Income Tax Department's official calculator to compare your situation before choosing.

New Income Tax Act 2025 — What Changed

In 2026-27, the new Income Tax Act 2025 was introduced to replace the earlier Income Tax Act 1961. However, it has not changed key aspects such as income tax slabs, rates, or the availability of both the old and new tax regimes.

The new Act also introduces a cleaner way to refer to tax periods. What was earlier called the Financial Year and Assessment Year is now simply called the Tax Year. Tax Year 2026-27 means income earned between April 1, 2026 and March 31, 2027.

Budget 2026 also includes:

• Revised income tax returns can now be filed up to March 31, extended from the earlier December 31 deadline, with a nominal fee.

• Staggered ITR due dates for individuals with July 31 as the due date for most taxpayers.

FAQs

Did income tax slabs change in Budget 2026?

Budget 2026 made no changes to income tax slabs or rates under either the new or old regime. The slabs introduced in Budget 2025 continue for FY 2026-27.

What is the capital gains tax on stocks in FY 2026-27?

LTCG on listed equity held over 12 months: 12.5% on gains above ₹1.25 lakh. STCG on equity held under 12 months: 20%. No change from FY 2025-26.

How does the STT hike affect F&O traders?

STT on futures increased from 0.02% to 0.05%. STT on options premium increased from 0.10% to 0.15%. The tax is charged on every transaction regardless of profit or loss, effective April 1, 2026.

Is F&O income taxed as capital gains or business income?

F&O income is treated as business income and taxed at your applicable slab rate. F&O losses can be carried forward for upto 8 years.

Which tax regime should I choose for FY 2026-27?

Use the Income Tax Department's official calculator to compare your specific tax liability under both regimes. Consult a qualified tax professional for personalised advice.

Also Read :- what is tax loss harvesting