Quick answer: Union Budget 2027-28 is expected on Monday, 1 February 2027, the first full Budget under the new Income-tax Act, 2025. No income tax relief is confirmed yet. Budget 2026 left slabs, rates and deductions unchanged, so plan FY 2026-27 on current law and treat any Budget 2027 relief as a bonus.
The Union Budget is the one day each year when every salaried taxpayer in India waits to hear whether their tax bill will fall. Budget 2027 matters more than most, because it is the first full Budget written under the new Income-tax Act, 2025 — the law that replaced the 1961 Act from 1 April 2026. This guide covers the expected date, what Budget 2026 did (and did not do), the five levers the Finance Minister can turn, what taxpayers are asking for, and the exact steps to take before 1 February 2027.
When is Budget 2027?
Union Budget 2027-28 is expected on Monday, 1 February 2027. That date follows the convention in place since 2017: the Budget is presented on 1 February each year. The official date is confirmed only when the Budget Session of Parliament is scheduled, and as of 14 November 2026 that announcement has not been made. Treat 1 February as expected, not confirmed.
The Economic Survey is usually presented a day before the Budget, and the Budget speech itself is normally delivered at 11 am. Pre-budget consultations inside the Finance Ministry began on 12 October 2026 and run until mid-November 2026. Industry bodies, trade unions, economists and tax professionals present their wish lists in these meetings — that is where most of the “expectations” you read in the news come from.
One date matters more than the speech itself. Changes to personal income tax in a February Budget normally apply from the next 1 April. So Budget 2027 would normally set the rules for FY 2027-28 (1 April 2027 to 31 March 2028), with the return for that year filed in AY 2028-29. Your tax for FY 2026-27 — the return you file in AY 2027-28 — is governed by the law already in force: the Income-tax Act, 2025, as amended by the Finance Act, 2026. No Budget speech in February 2027 can change the tax on income you already earned in FY 2026-27.
What is the Income-tax Act, 2025?
The Income-tax Act, 2025 is the new law that replaced the Income-tax Act, 1961 from 1 April 2026. It keeps most rates and deductions but uses simpler language, renumbers sections and replaces old forms. Section 80C is now Section 123, the new regime is Section 202, the standard deduction sits in Section 19, and the rebate under old Section 87A is now Section 156.
Budget 2027 is the first full Budget under this new law. That is why it is watched closely: the first Budget after a new Act usually shows how the government plans to use the new framework — whether it trims rates, raises limits, or leaves the new structure alone for a year.
What did Budget 2026 actually do for income tax?
Budget 2026-27, presented in February 2026, changed nothing for personal income tax. Slabs, rates, the standard deduction and the rebate were all left unchanged under both the old and new regimes.
That pause made sense at the time. The new Income-tax Act took effect on 1 April 2026, and the government chose to let the new law settle before touching rates. But it also means salaried taxpayers have now had two straight Budgets with no personal-tax relief beyond what Budget 2025 delivered. The open question for Budget 2027 is whether the pause continues or relief returns.
Here is the law you are planning on today, for FY 2026-27 under the new regime:
| Income slab | Tax rate |
|---|---|
| Up to Rs 4 lakh | Nil |
| Rs 4 lakh – Rs 8 lakh | 5% |
| Rs 8 lakh – Rs 12 lakh | 10% |
| Rs 12 lakh – Rs 16 lakh | 15% |
| Rs 16 lakh – Rs 20 lakh | 20% |
| Rs 20 lakh – Rs 24 lakh | 25% |
| Above Rs 24 lakh | 30% |
Add 4% health and education cess on the tax. The rebate under Section 156 (old 87A) wipes out tax up to Rs 60,000 where taxable income is up to Rs 12 lakh in the new regime, with marginal relief just above Rs 12 lakh. The standard deduction is Rs 75,000 in the new regime and Rs 50,000 in the old regime. A salaried taxpayer effectively pays no tax up to Rs 12.75 lakh in the new regime.
What are the income tax slabs for 2027-28?
The final income tax slabs for FY 2027-28 are not yet announced. They will be set by Budget 2027 and the Finance Bill that follows it. Until 1 February 2027, the only honest answer is: the FY 2026-27 slabs above are the latest notified rates, and Budget 2027 may confirm them or change them.
Any article, video or social media post that shows “confirmed” 2027-28 slabs before Budget day is guessing. Use the current slabs for your FY 2027-28 planning, and re-check on the Income Tax Department portal after the Budget.
The 5 levers Budget 2027 can turn
A Budget can change personal income tax through a small set of levers. Each one helps a different group of taxpayers, and each has a known current value. Here they are.
1. Income tax slabs
The new-regime slabs (Section 202, old 115BAC) are the most-watched lever. A change here helps everyone with taxable income above Rs 12 lakh in the new regime — below that, the rebate already wipes out the tax. The most-discussed ask is a wider nil or 5% band, but the Finance Ministry has given no signal. The old regime’s slabs have not moved in years and are unlikely to be the focus, since the new regime is now the default.
2. Standard deduction
The standard deduction (Section 19) is Rs 75,000 in the new regime and Rs 50,000 in the old regime for salaried employees and pensioners. It was last raised in Budget 2024, from Rs 50,000 to Rs 75,000 in the new regime. A rise helps every salaried taxpayer, in proportion to their marginal rate — and it is the simplest relief to announce, which is why it appears in almost every pre-Budget wishlist.
What would a rise be worth? Take a hypothetical Rs 25,000 increase. At the 30% slab it saves Rs 7,500 in tax plus Rs 300 cess — Rs 7,800 a year. At 20% it saves Rs 5,200, and at 10% it saves Rs 2,600. That is a hypothetical example only; no rise has been announced.
3. The rebate under Section 156
The rebate is worth up to Rs 60,000 where taxable income is up to Rs 12 lakh in the new regime. Raising the rebate ceiling — say, from Rs 12 lakh to Rs 15 lakh of taxable income — would extend zero-tax status further up the income scale. It is a cheaper lever for the government than changing slabs, because it only helps people near the threshold. No such change has been announced.
4. Deduction limits under Sections 123 and 126
Section 123 (old 80C) caps at Rs 1.5 lakh and has not moved since 2014 — twelve years of inflation have cut its real value by nearly half. Section 126 (old 80D) caps health insurance premiums at Rs 25,000 (Rs 50,000 for senior citizens). Both apply only in the old regime. See the full list in our Chapter VI-A deductions guide. Taxmann’s Budget 2027 wishlist asks for the Section 123 limit to be raised and for the Rs 2 lakh cap on housing-loan interest (Section 22, old 24) to be revised. A rise here helps only old-regime filers, who are now a minority — which is why these asks often lose out to new-regime relief.
5. Capital gains tax and STT
Long-term capital gains on listed equity are taxed at 12.5% above Rs 1.25 lakh a year. Retail investors want a lower rate, a higher exemption, or relief from paying both securities transaction tax (STT) and capital gains tax. On 13 October 2026, Finance Minister Nirmala Sitharaman said at the Bloomberg New Economy Forum that the government is open to hearing views on LTCG and STT during Budget consultations. She promised nothing. In July 2026, the Finance Ministry told Parliament it has no proposal to scrap LTCG on equities — so full removal looks unlikely, and a rate cut or a higher exemption is the realistic range. Debt mutual funds are a related ask: their gains are taxed at slab rates regardless of holding period, and investors want parity with equity funds.
What are taxpayers asking for in Budget 2027?
The wish lists filed in the pre-budget consultations share a pattern: raise limits that inflation has shrunk, and fix rough edges in the new Act. The main asks are:
- Raise the Section 123 (80C) limit above Rs 1.5 lakh — the most repeated ask, unchanged since 2014.
- Raise the standard deduction in the new regime above Rs 75,000.
- Raise the housing-loan interest cap above Rs 2 lakh (Section 22).
- Raise the LTCG exemption on equity above Rs 1.25 lakh a year, or cut the 12.5% rate.
- Debt mutual fund parity — tax debt-fund gains like equity-fund gains instead of at slab rates.
- ESOP clarity — tax rules for ESOP cancellation and buy-back, which the 2025 Act covers only on exercise.
- Old-regime allowances — restore the wider set of allowances that Rule 2BB(3) of the 1962 Rules allowed, which the corresponding Rule 280(3) of the 2026 Rules appears to narrow.
None of these is confirmed. They are asks from taxpayers and professional bodies, not government promises. The honest way to read them: they show where the pressure is, not what will happen.
What should you do before 1 February 2027?
Do not wait for the Budget to plan your tax. The decisions that save you money this year are all under current law, and most of their deadlines fall before Budget day.
Pay your advance tax on time. The third instalment of advance tax for FY 2026-27 is due on 15 December 2026, when 75% of your total advance tax must be paid. Missing it draws interest under the 2025 Act. Your Budget-day hopes do not change this deadline.
Submit investment proofs to your employer. If you are in the old regime, your employer needs proof of Section 123 investments, Section 126 premiums and HRA rent receipts before it finalises TDS for the year. File them in December, not in March.
Use the current slabs for FY 2027-28 planning. If you are negotiating a salary, planning a property sale or timing a capital gain, use the FY 2026-27 rates. Budget 2027 may change them, but a plan built on a guessed rate is worse than a plan built on the notified one.
Do not sell or buy only because of Budget rumours. Media reports before 1 February are speculation. Stocks, mutual funds and property decisions made on a rumoured tax change are the most common way taxpayers lose money around Budget season.
Keep the new Act’s form numbers handy. From 1 April 2026, Form 16 is Form 130, Form 16A is Form 131, and the old TDS return forms have new numbers too. If your employer or bank still uses old form names, ask for the new ones — it avoids confusion when you file in AY 2027-28.
What happens on Budget day and after?
On 1 February 2027, the Finance Minister presents the Budget in Parliament, normally at 11 am, followed by the Finance Bill. The Bill then goes through Parliament and becomes the Finance Act. Most personal income-tax changes take effect from the next 1 April — 1 April 2027 for Budget 2027. A few changes, such as customs and excise duty changes, can take effect at once, but income-tax rates are not among them.
After the speech, check three things: the new slabs (if changed), the effective date of each change, and whether any change affects FY 2026-27 or only FY 2027-28. This site will update its guides on Budget day with the actual proposals, effective dates and worked examples. Until then, everything in the expectations section of this article is an expectation — clearly labelled, and not a fact.
Frequently asked questions
When is Budget 2027?
Union Budget 2027-28 is expected on Monday, 1 February 2027, following the convention in place since 2017. The official date is confirmed only when the Budget Session of Parliament is scheduled. Pre-budget consultations in the Finance Ministry began on 12 October 2026 and run until mid-November.
Will Budget 2027 cut income tax?
Nobody outside the government knows. Inflation strengthens the case for relief through slab or deduction changes, but limited fiscal room and the large 2025 revision of the tax law argue for caution. The Finance Minister has said she is open to views on LTCG and STT, but has promised nothing. Plan on current law and treat any relief as a bonus when it is confirmed.
Did Budget 2026 change income tax slabs?
No. Budget 2026-27 kept income tax slabs and rates unchanged under both the old and new regimes. Under the new regime, income up to Rs 4 lakh is tax-free, the rebate covers taxable income up to Rs 12 lakh, and salaried taxpayers effectively pay no tax up to Rs 12.75 lakh after the Rs 75,000 standard deduction.
What are the income tax slabs for 2027-28?
The final slabs for FY 2027-28 are not yet announced — they will be set by Budget 2027. The latest notified rates are the FY 2026-27 slabs: nil to Rs 4 lakh, then 5%, 10%, 15%, 20% and 25% in Rs 4 lakh steps, and 30% above Rs 24 lakh in the new regime. Check the Income Tax Department portal after 1 February 2027 for the final position.
Can I claim Section 80C under the new tax regime?
Generally, no. Section 123 (old 80C) deductions are available only under the old regime. Taxpayers in the new regime cannot claim them, but they get the higher standard deduction of Rs 75,000 and the rebate up to Rs 12 lakh of taxable income instead. Old-regime filers can claim qualifying investments and payments within the Rs 1.5 lakh combined limit.
What is the standard deduction for 2027-28?
The standard deduction for FY 2027-28 has not been announced yet. Under the latest notified rules for FY 2026-27, it is Rs 75,000 in the new regime and Rs 50,000 in the old regime for salaried employees and pensioners. Budget 2027 may raise it, but no change is confirmed as of 14 November 2026.
What is the Income-tax Act, 2025?
It is the new law that replaced the Income-tax Act, 1961 from 1 April 2026. It keeps most rates and deductions but uses simpler language, renumbers sections (Section 80C is now Section 123, the new regime is Section 202) and replaces old forms with new ones. Budget 2027 is the first full Budget presented under this Act.
Official sources
- Union Budget portal: https://www.indiabudget.gov.in/
- Income Tax Department: https://www.incometax.gov.in/
- Press Information Bureau (Budget announcements): https://www.pib.gov.in/
Reviewed by Asuthod Rathod, CA. Last updated: 14 November 2026. This article is for general information only and is not tax advice. Budget 2027 proposals described here as expectations are not confirmed law — check the Finance Bill and the Income Tax Department portal after 1 February 2027 before acting on them.
Editorial byline for eircicai income tax guides — covering the Income Tax Act, 2025, section renumbering, regime comparison, and deductions. Content is reviewed by Asuthod Rathod, CA.