Union Budget 2024 and 2025: The Tax Changes That Still Affect You in 2026
A clear summary of the tax changes from Budget 2024 and Budget 2025 that still apply in FY 2026-27: capital-gains rates, standard deduction, ₹12 lakh rebate and TDS limits.
Two Union Budgets reshaped personal taxation: the July 2024 budget (which changed capital-gains tax and the standard deduction) and the February 2025 budget (which made income up to ₹12 lakh tax-free in the new regime). This guide separates what changed from what it means for you today, in FY 2026-27.
Budget 2024 (July 2024): the lasting changes
| Change | Detail |
|---|---|
| Short-term capital gains on listed equity (sec 111A) | Raised from 15% to 20% |
| Long-term capital gains on listed equity (sec 112A) | Raised from 10% to 12.5%; annual exemption raised from ₹1 lakh to ₹1.25 lakh |
| Holding period for listed shares | 12 months for long-term |
| Other long-term assets (property, unlisted shares, gold) | 12.5% without indexation; resident individuals/HUFs who bought property before 23 July 2024 can choose 20% with indexation or 12.5% without |
| Standard deduction (new regime) | Raised from ₹50,000 to ₹75,000 |
| Family pension deduction | Increased to ₹25,000 in the new regime |
| Employer NPS limit (new regime) | Raised to 14% of salary |
| Securities transaction tax on F&O | Increased |
| Angel tax | Abolished |
The capital-gains changes matter most to investors: the extra 2.5 percentage points on long-term gains and the 5-point jump on short-term gains reduce post-tax returns, which is why holding equity beyond a year remains valuable.
Budget 2025 (February 2025): the ₹12 lakh budget
- New-regime slabs were widened: nil up to ₹4 lakh, then 5%, 10%, 15%, 20%, 25% and 30% above ₹24 lakh.
- Rebate raised: taxable income up to ₹12 lakh pays no tax under section 87A (rebate up to ₹60,000). With the standard deduction, a salaried person is tax-free up to ₹12.75 lakh.
- TDS thresholds raised from 1 April 2025: interest from banks from ₹40,000 to ₹50,000 (₹1 lakh for senior citizens), rent from ₹2.4 lakh to ₹6 lakh a year, and others.
- Updated return window extended to 48 months.
What this means for different taxpayers
Salaried employees
For most, the new regime is now the better default. At a ₹15 lakh salary the tax is about ₹97,500; the old regime needs about ₹5.6 lakh of deductions to match it. See our slab guide for the working.
Investors
Long-term equity gains up to ₹1.25 lakh a year are tax-free; beyond that 12.5%. Short-term gains are 20%. Plan sales so you realise gains up to the exemption each year. Try the stock return calculator.
Property sellers
Compare 12.5% without indexation against 20% with indexation if you bought before 23 July 2024; the right choice depends on how long you held and how much the cost index rose.
Senior citizens and landlords
Higher TDS thresholds mean fewer TDS deductions on modest FD interest or rent, but the income is still taxable: report it in your return.
How to read future budgets
Budgets change rates by announcement, effective on dates stated in the Finance Act. Check three things: which regime the change applies to, whether the effective date is the new financial year, and whether transition rules apply to existing investments. Always verify the latest figures with the Income Tax Department.
Frequently asked questions
What is the long-term capital gains tax on shares now?
12.5% on gains above ₹1.25 lakh a year, for shares held over 12 months.
What is the short-term capital gains tax on shares?
20% for listed equity held up to 12 months.
Is income up to ₹12 lakh really tax-free?
Yes in the new regime, via the section 87A rebate. Salaried people get a further ₹75,000 standard deduction.
Did Budget 2024 remove indexation?
Yes for most assets, but property bought before 23 July 2024 gets a choice between 20% with indexation and 12.5% without.
Did TDS limits change?
Yes: bank interest threshold ₹50,000 (₹1 lakh for seniors) and rent ₹6 lakh a year from FY 2025-26.
Where can I check the latest rules?
On the Income Tax Department website and the Finance Act.
Last reviewed 8 November 2026. Rates, limits and rules change, so confirm figures with the official source before you act.
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Information on AMTools is for general guidance and is not professional financial, tax, legal or medical advice. Rules, rates and limits change, so check the latest official source before acting.