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Union Budget 2026-27 - Finance Bill, 2026
For tax year 2026-27, as per the provisions of section 202 of the Act, an individual or Hindu undivided family or association of persons [other than a co-operative society], or body of individuals, whether incorporated or not, or an artificial juridical person referred to in section 2(77)(g), has to pay tax in respect of the total income at following rates:
Sl. No. | Total income | Rate of tax |
(1) | (2) | (3) |
1. | Upto ₹ 4,00,000 | Nil |
2. | From ₹ 4,00,001 to ₹ 8,00,000 | 5% |
3. | From ₹ 8,00,001 to ₹ 12,00,000 | 10% |
4. | From ₹ 12,00,001 to ₹ 16,00,000 | 15% |
5. | From ₹ 16,00,001 to ₹ 20,00,000 | 20% |
6. | From ₹ 20,00,001 to ₹ 24,00,000 | 25% |
7. | Above ₹ 24,00,0000 | 30% |
2. The above-mentioned rates shall apply, unless an option is exercised as per provisions of section 202(4). Thus, rates specified in section 202 are the default rates.
3. In respect of income chargeable to tax under section 202, the income-tax for the tax year 2026-27 shall be increased by a surcharge, for the purposes of the Union, computed, in the case of every individual or Hindu undivided family or association of persons, or body of individuals, whether incorporated or not, or every artificial juridical person referred to in section 2(77)(g) of the Act,-
(i) having a total income (including the dividend income or capital gains under the provisions of sections 196, 197 and 198 of the Act) exceeding fifty lakh rupees but not exceeding one crore rupees, at the rate of 10% of such income-tax;
(ii) having a total income (including the dividend income or capital gains under the provisions of sections 196, 197 and 198 of the Act) exceeding one crore rupees but not exceeding two crore rupees, at the rate of 15% of such income-tax;
(iii) having a total income (excluding the dividend income or capital gains under the provisions of sections 196, 197 and 198 of the Act) exceeding two crore rupees, at the rate of 25% of such income-tax;
(iv) having a total income (including the dividend income or capital gains under the provisions of sections 196, 197 and 198 of the Act) exceeding two crore rupees, but is not covered under clause (iii) above, at the rate of 15% of such income-tax;
3.1 In case where the provisions of section 115BAC(1A) are applicable and the total income includes any dividend income or capital gains under the provisions of sections 196, 197 and 198 of the Act, the rate of surcharge on the income-tax in respect of that part of income shall not exceed 15%.
3.2 Further, in the case of an association of persons consisting of only companies as its members, and having its income chargeable to tax under section 202, the rate of surcharge on the income-tax shall not exceed 15%.
3.3 Marginal relief shall be provided in such cases.
Full Text:
Tax rates under section 202 set default slabs with surcharge bands, surcharge caps for specified cases, and marginal relief. Tax rates under section 202 set graded default income-tax slabs for specified taxpayers for 2026-27, subject to an option to elect an alternative regime; a surcharge applies to higher total income bands (with inclusion rules for dividend income and capital gains), surcharge caps where alternative provisions apply and for certain associations of persons, and marginal relief to alleviate threshold impacts. of Press 'Enter' after typing page number.
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