CBDT Chief Reports 88% of Individual Taxpayers Have Chosen the New Tax Regime

New Delhi, February 4, 2026 – Ravi Agrawal, Chairman of the Central Board of Direct Taxes (CBDT), announced that 88 percent of individual taxpayers have opted for the new income tax regime. He confirmed that the government currently has no plans to introduce a sunset clause for filing returns under the old tax regime.

Taxpayer Choice and Adoption Rates

Agrawal highlighted that the choice of tax regime is up to the taxpayers, and feedback on the new system has been positive. Approximately 88 percent of individuals filing returns using forms ITR 1, 2, 3, and 4 have switched to the new regime.

In the case of presumptive taxation, about 97 percent of taxpayers have adopted the new tax framework. For corporate entities, around 60 percent of declared income is now reported under the new regime.

Upcoming Policy Changes and Their Impact

Looking ahead, Agrawal mentioned that the revised minimum alternate tax (MAT) provisions, to be introduced in the fiscal year 2027 Budget, are expected to encourage further adoption of the new regime.

MAT, which applies to companies, is calculated at 15 percent of book profits and is charged only when it exceeds regular income tax. The 2027 Budget proposes reducing this rate to 14 percent and designating MAT as the final tax for companies opting for the old tax regime.

Securities Transaction Tax Revisions

Regarding the proposed increase in securities transaction tax (STT) in the 2027 Budget, Agrawal stated the objective is to discourage retail investors from engaging in excessive speculative activities.

The Budget suggests raising STT on futures contracts from 0.02 percent to 0.05 percent, and on options premiums and exercise from 0.1 percent and 0.125 percent respectively, to 0.15 percent.

Direct Tax Collection and Tax Regime Comparison

Agrawal also expressed confidence in achieving the revised direct tax collection target of Rs 24.21 lakh crore for the 2025-26 fiscal year.

The old tax regime, prior to the 2020 revision, features higher tax rates but allows various deductions and exemptions. Conversely, the new tax regime offers lower tax rates and full exemption benefits to individuals earning up to Rs 15 lakh annually.

Key Takeaways

  • 88% of individual taxpayers have opted for the new income tax regime as of February 2026.
  • About 97% of presumptive taxpayers and 60% of corporate income have shifted to the new tax framework.
  • The 2027 Budget plans include reducing MAT rates and revising the securities transaction tax to curb speculative trading.
  • The government has no plans to discontinue the old tax regime despite widespread adoption of the new one.
  • Direct tax collection targets remain ambitious, with a goal of Rs 24.21 lakh crore for fiscal year 2025-26.