Budget 2026-27: Will Nirmala Sitharaman Abolish the Old Tax Regime?

• The government has focused on making the new income tax regime more attractive, with lower tax rates and simplicity.
• Despite the new regime's popularity, 28-29% of taxpayers, particularly those with higher incomes and structured compensation, still utilize the old regime due to its deduction benefits (HRA, 80C, 80D, education/home loans).
• Experts like Nitin Bajal (Deloitte India) highlight that discontinuing the old regime abruptly would disrupt long-term financial planning for millions who rely on tax benefits for savings.
• The government has repeatedly affirmed that the old regime option will remain available alongside the new one, maintaining public trust and avoiding disruptions.
• Most experts, including Sudhakar Sethuraman (Deloitte India), believe both regimes will continue, with the government gradually encouraging adoption of the simpler new tax regime.

Why It Matters: The government is unlikely to abolish the old tax regime in Budget 2026-27, preferring to run both regimes concurrently.