The Government of India introduced a revamped tax regime in the Union Budget 2026–2027, modifying income tax slabs to simplify compliance and incentivize savings via new mechanisms. These changes directly impact an individual’s investment strategies, including mutual funds and Systematic Investment Plans (SIPs). Investors using services like Bajaj Mutual Fund must evaluate how the updated tax regime influences their future portfolio planning, especially considering tax benefits under different investment schemes.
Latest Income Tax Slabs FY 2026-2027 Under New Tax Regime
Under Budget 2026, the new tax regime continues with revised slab rates and remains the default option for taxpayers. It focuses on lower rates with minimal exemptions and deductions. Here are the key details of the new tax slabs 2026 in FY 2026-27:
– Income up to ₹4,00,000 – Nil tax rate
– Income from ₹4,00,001 to ₹8,00,000 – 5%
– Income from ₹8,00,001 to ₹12,00,000 – 10%
– Income from ₹12,00,001 to ₹16,00,000 – 15%
– Income from ₹16,00,001 to ₹20,00,000 – 20%
– Income above ₹20,00,000 to ₹24,00,000 – 25%
– Above 24 lakh – 30%
The above tax slabs are applicable for resident taxpayers and there are no separate tax rates, tax slabs or exemption limits for senior citizens or super senior citizens. The new income tax regime continues to be the default regime.
The old income tax regime has remained unchanged for years now. To the extent that it now needs to be specially opted for at the time of filing the income tax return. In case a taxpayer fails to file his ITR before the July 31 deadline, they cannot file their tax return under the old regime and will automatically be switched to the new tax regime.
Latest Income Tax Slabs FY 2026-2027 Under Old Tax Regime
The old income tax regime has remained unchanged for years now. To the extent that it now needs to be specially opted for at the time of filing the income tax return. In case a taxpayer fails to file his ITR before the July 31 deadline, they cannot file their tax return under the old regime and will automatically be switched to the new tax regime. While the number of tax exemptions and deductions are very high under the old income tax regime, it also has high tax rates and at very low levels of income too.
– Income up to ₹2,50,000 – Nil tax rate
– Income from ₹2,50,001 to ₹5,50,000 – 5%
– Income from ₹5,50,001 to ₹10,00,000 – 20%
– Above 10 lakh – 30%
The above rates are applicable for resident individuals up to the age of 60.
However the basic exemption limit for senior citizens and super senior citizens varies under the old tax regime. For senior citizens above the age of 60 and below 80, the basic exemption limit is Rs 3 lakh. For super senior citizens above the age of 80, the basic exemption limit is Rs 5 lakh.
Mutual Funds and SIPs: A Tax Perspective
Mutual funds and SIPs are popular investment instruments for wealth creation, offering structures that suit diverse risk appetites and financial goals. These include equity mutual funds, debt mutual funds, hybrid schemes, and more—many of which are offered under Bajaj Mutual Fund.
Under the old tax regime, platforms like Bajaj Mutual Fund had specific tax-efficient schemes. For instance:
- Equity Mutual Funds
Long-term capital gains (LTCG) from equity mutual funds exceeding ₹1,00,000 were taxed at 10%, beneficial for high-income individuals. Short-term capital gains were taxed at 15%, regardless of the tax slab. - Debt Mutual Funds
LTCG realized on debt fund investments held longer than 36 months were taxed at 20% with indexation benefits. Short-term capital gains were taxed according to the investor’s income tax slab.
Under the Income Tax slab for FY 2026-27, these mutual fund gains (short-term and long-term) remain taxable, but without deduction benefits. For investors previously availing of tax-saving schemes, such as ELSS under Section 80C, the new tax regime removes the incentive of a direct reduction in taxable income, compelling them to rethink the attractiveness of traditional tax-saving mutual funds.
How This Affects SIP Strategy
Systematic Investment Plans (SIPs) are ideal for staggered investments, particularly through Bajaj Mutual Fund, which offers diverse SIP options for wealth creation over time. The new tax slabs indirectly influence SIP strategies by impacting disposable income and the taxes levied on capital gains generated when redeeming units—a notable change under the new tax regime.
For example:
– With a disposable income of ₹15,00,000 per annum
An individual under the new tax regime pays ₹1,50,000 in taxes (as per the 20% tax slab for this category).
– Assuming they invest ₹10,000 monthly in an equity mutual fund’s SIP
Via Bajaj Mutual Fund for five years, their total investment stands at ₹6,00,000. With an annual return of 12%, they would accumulate approximately ₹8,16,000. LTCG tax applies if annual gains exceed ₹1,00,000—potentially creating a liability of ₹2,160 (10% of ₹2,16,000 in capital gains exceeding ₹1,00,000).
Individuals in lower income slabs (up to ₹6,00,000) pay lower taxes or none, enabling them to allocate higher amounts toward SIP investments or mutual fund portfolios without substantial tax liability.
Calculations: Comparing Scenarios
For higher-slab beneficiaries, tax obligations are steeper under the new regime, potentially reducing investment affordability.
Scenario 1: ₹9,00,000 Annual Income
– Tax under new regime
₹60,000 (10%)
– Disposable income after tax
₹8,40,000
– Monthly SIP investment budget
Aligns proportionately based on reduced disposable income.
Scenario 2: ₹12,00,000 Annual Income
– Tax under new regime
₹1,80,000 (15%)
– Disposable income after tax
₹10,20,000
Investors must re-strategize SIP allocations, as individuals with higher taxable incomes might prioritize liquid assets or low-tax schemes to preserve post-expense liquidity.
What Options Do Investors Have?
The shift toward the new tax regime impacts traditional tax-saving investments like ELSS mutual funds due to the removal of Section 80C benefits. Debt mutual funds are also subject to taxation without indexation benefits if redeemed post April 2023. SIP investors might explore alternatives such as equity investments, ULIPs (Unit Linked Insurance Plans), or NPS (National Pension Schemes), but these changes hinge on disposable income and tax obligations.
While Bajaj Mutual Fund continues to offer reliable, diversified SIP models, high-income individuals under the new regime may need to carefully evaluate their long-term expectations for capital growth versus immediate liquidity.
Final Thoughts
The new tax regime directly influences mutual funds and SIP strategies, removing deductions but simplifying tax calculations. Investors engaging platforms like Bajaj Mutual Fund must factor in cash flows, tax on capital gains, investment tenure, and risk appetite to adapt strategies accordingly.
Summary
The revised tax slabs under the new tax regime have altered individual investment strategies, especially for mutual funds and SIPs via platforms like Bajaj Mutual Fund. By removing deductions under sections like 80C and 80D, the government encourages simpler tax compliance. This shift affects equity and debt mutual fund gains, as deductions are no longer available.
For example, taxpayers in higher slabs face steeper obligations, which may influence disposable incomes. If an investor earning ₹15,00,000 per annum allocates ₹10,000 monthly toward a Bajaj Mutual Fund SIP for five years (accumulating ₹6,00,000 at 12% annual returns), their ₹8,16,000 earnings would trigger a tax liability of ₹2,160 for LTCG above ₹1,00,000.
Ultimately, the new tax regime calls for recalibration of strategies, with individuals needing to evaluate scenarios carefully to ensure their mutual fund or SIP investments align with future financial goals.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors must thoroughly evaluate pros, cons, and risks associated with trading or investing in the Indian financial market before making decisions.