Do the Budget 2020 tax rates still apply?
No. The personal tax rates in Budget 2020 do not apply to FY 2025-26. That budget offered an optional set of slabs for the year it covered. The rates for income of FY 2025-26 are the new-regime slabs in Budget 2025.
What slabs did Budget 2020 offer?
The optional regime in that budget, for an individual or a Hindu undivided family who chose it, used these bands. They are recorded here as history. They are not the bands on a return for FY 2025-26.
| Total income | Optional rate in Budget 2020 |
|---|---|
| Up to ₹2.5 lakh | Nil |
| ₹2.5 lakh to ₹5 lakh | 5 percent |
| ₹5 lakh to ₹7.5 lakh | 10 percent |
| ₹7.5 lakh to ₹10 lakh | 15 percent |
| ₹10 lakh to ₹12.5 lakh | 20 percent |
| ₹12.5 lakh to ₹15 lakh | 25 percent |
| Above ₹15 lakh | 30 percent |
A person who chose those rates gave up the deductions and exemptions that regime then disallowed, including house rent allowance and the standard deduction as it stood that year. A person with business income who chose the option was locked into it, with one chance to leave. A person without business income chose it year by year. That machinery applied to that regime. It is not a choice to reopen FY 2025-26 on these bands.
Which slabs apply to FY 2025-26?
Budget 2025. Tax is nil up to ₹4 lakh, then 5, 10, 15, 20, and 25 percent through the bands up to ₹24 lakh, and 30 percent above ₹24 lakh. A rebate leaves tax at nil on income up to ₹12 lakh taxed at those normal rates. The table, and what the rebate does not cover, is on the Budget 2025 page. The slabs for FY 2023-24 are a different closed year, on the FY 2023-24 page.
Which date from that budget remains?
The due date for an audited return moved to 31 October. That date is still the date on the due-dates page. For assessment year 2026-27 a company return, and any other audited return, is due on 31 October 2026. Where section 92E applies, the return is due on 30 November 2026. The tax-audit report, where the return is due on 31 October, was due on 30 September 2026, and that September date has passed. A return without audit was not moved to October by that budget, and the non-audit date for this year, 31 July 2026, has also passed.
Did it freeze company and firm tax?
No. Budget 2020 said the rates of tax for a company, a firm, and a limited liability partnership were not changed in that budget. A statement that one budget left a rate alone is not the rate for a later year. Company tax and firm tax are stated on the pages for those returns, not by repeating the 2020 sentence as if it still fixed the rate.
Frequently asked questions
Four questions cover the 2020 bands, the October date, company tax, and the old option.
Can FY 2025-26 be filed on the 2020 optional slabs?
No. Those bands were for the year that budget applied to. FY 2025-26 uses the Budget 2025 new-regime slabs.
Is the audited return still due on 31 October?
Yes, for a year in which that is the statutory date. For assessment year 2026-27 a company return, and any other audited return, is due on 31 October 2026. Where section 92E applies, the return is due on 30 November 2026.
Did Budget 2020 leave company tax unchanged forever?
No. A sentence in that budget that company and firm rates were not changed that year is not a rate for a later year. Current company and firm rates are on the tax pages for those persons.
Is the optional regime still chosen every year on these bands?
No. The new regime later became the default, and the bands themselves were replaced. The 2020 choice and the 2020 bands are one closed year.
Sources
Budget 2020 is the Finance Act, 2020. The slabs for FY 2025-26 are the Finance Act, 2025.