Budget 2026 Highlights: What Changed for Salaried Employees
Published 8 June 2026. Union Budget 2026 (presented 1 February 2026) built on the Budget 2025 relief and pushed the new regime rebate ceiling higher. For salaried filers, the change is meaningful — take-home moves up without needing more paperwork. CBDT operational circulars followed in March–May 2026. Use our Income Tax Calculator to compare AY 2026-27 vs AY 2027-28 impact.
What Changed
- Rebate under Section 87A extended: Zero tax up to ₹13.5 lakh for salaried (₹12.5 lakh income + ₹1,00,000 standard deduction) under the new regime, from AY 2027-28.
- Standard deduction raised: ₹1,00,000 (up from ₹75,000) for salaried employees and pensioners.
- 25% slab extended: Now applies from ₹20 lakh to ₹25 lakh (earlier ₹24 lakh); 30% starts above ₹25 lakh.
- Employer NPS contribution cap: Section 80CCD(2) deduction hiked to 15% of basic + DA for private sector employees (up from 14%), matching central government rate.
- Old regime frozen: Slabs, 80C limit (₹1.5L), 80D (₹25K/₹50K) unchanged — Finance Ministry signalled continued nudge toward the new regime.
Impact on ₹18 Lakh CTC Salaried
New regime FY 2026-27 tax: ~₹90,000 after ₹1L standard deduction. Same income under Budget 2025 rules: ₹1,27,500. Annual saving: ₹37,500.
Pro Tip: If your employer NPS matches the new 15% ceiling, request a payroll update — the extra deduction applies from the month it's booked. Calculate 2026 tax →