Salaried employees in India have the option to choose between the old and new income tax regimes when filing their returns. As per the Union Budget 2026, there were no changes to the income slab rates under either regime. The new tax regime, which continues to be the default option, offers a simplified tax structure but fewer deductions. Under the old tax regime, income up to ₹2.5 lakh is exempt from tax, with progressive rates of 5%, 20%, and 30% for higher income brackets. In contrast, the new regime allows income up to ₹4 lakh to be tax-free, with rates starting at 5% for income between ₹4 lakh and ₹8 lakh. Notably, the new regime provides a higher standard deduction of ₹75,000 compared to ₹50,000 under the old regime. However, it eliminates many common tax benefits such as house rent allowance and deductions under Sections 80C and 80D. Taxpayers earning up to ₹12.75 lakh annually may effectively pay no tax under the new regime after standard deductions. Evaluating personal financial situations and investment strategies is crucial for taxpayers to determine which tax regime best suits their needs.