Will the Old Tax Regime Be Discontinued in 2026?
Will the Old Tax Regime Be Discontinued in 2026? Here's What Indian Taxpayers Should Know
Ever since the new tax regime was introduced in FY 2020–21, there has been a big question on everyone’s mind:
"Will the old tax regime be scrapped?"
With Budget 2023 making the new regime the default option, many salaried individuals, professionals, and even retirees are worried that their favorite deductions (like 80C, 80D, HRA, and home loan interest) might soon become irrelevant.
So, is the old tax regime going away by 2026? Here’s a detailed, easy-to-understand breakdown based on current government statements and expert opinions.
What Are the Two Tax Regimes?
Before we dive into future changes, here’s a quick recap:
🧾 Old Tax Regime:
• Higher tax slabs
• Offers over 70 deductions & exemptions
• Popular among the salaried class & homeowners
💼 New Tax Regime (as of FY 2023–24):
• Lower tax slabs
• No major deductions allowed
• Set as default regime by Budget 2023
Is the Old Regime Being Phased Out?
As of now, there is no official notification from the Income Tax Department or the Ministry of Finance stating that the old tax regime will be discontinued in 2026.
However, several signals suggest a long-term nudge toward the new regime:
• 📢 Budget 2023: The Finance Minister declared the new regime as the default option
• 🧮 More taxpayers are expected to shift due to simplified filing
• 📉 Decline in promotion of Section 80C & other exemptions
Still, the option to choose between the old and new regime remains open for FY 2024–25.
What Experts Say About 2026
While there’s no formal timeline, many tax experts believe that:
• The government may review the popularity of the new regime by FY 2025–26
• If adoption increases, phasing out the old regime by 2026 or later is likely
• A complete shift will only happen once major salary structures and investments align with the new tax model
But as of today, you still have the right to choose either regime while filing your ITR.
What Should Taxpayers Do Now?
✅ Continue planning your investments and deductions
✅ Keep records of all 80C, 80D, HRA, and home loan-related documents
✅ Use calculators on the Income Tax Portal to compare both regimes
✅ Speak to a CA or tax consultant if you have a complex salary/investment structure
Final Words
While the government has taken steps to promote the new tax regime, the old regime is not being discontinued in 2026—at least not officially. Any such move would likely be announced in a future budget, with enough lead time for taxpayers to adjust.
For now, you can breathe easy and continue using the regime that benefits your tax planning the most.
Uncertain about the future of the old tax regime?
Stay ahead of tax changes with expert advice on planning and maximising your savings.
👉 https://callmyca.com/business-tax-filing
