Question 1

What are the income tax slabs for FY 2026-27 in India under the new regime?

Accepted Answer

Under the new tax regime for FY 2026-27 (AY 2027-28): 0 to 4,00,000 nil; 4,00,001 to 8,00,000 5%; 8,00,001 to 12,00,000 10%; 12,00,001 to 16,00,000 15%; 16,00,001 to 20,00,000 20%; 20,00,001 to 24,00,000 25%; above 24,00,000 30%. The standard deduction for salaried individuals is 75,000 and the Section 87A rebate is up to 60,000 for taxable income up to 12,00,000, making salary up to 12,75,000 effectively tax-free.

Question 2

What are the income tax slabs for FY 2025-26?

Accepted Answer

Finance Act 2025 introduced the same slab structure that continues in FY 2026-27. New regime FY 2025-26 (AY 2026-27): 0 to 4L nil, 4-8L 5%, 8-12L 10%, 12-16L 15%, 16-20L 20%, 20-24L 25%, above 24L 30%. Standard deduction 75,000 and 87A rebate up to 60,000 for income up to 12L.

Question 3

Should I choose the new tax regime or the old tax regime?

Accepted Answer

The new regime wins when total deductions (HRA + 80C + 80D + home loan interest + standard deduction) are below roughly 4 lakh. The old regime wins when deductions exceed 5 lakh. Anyone with a home loan, a metro HRA, and a fully utilised 80C plus 80CCD(1B) NPS will usually save more in the old regime. Use this calculator to compare both side-by-side for your exact numbers.

Question 4

How is HRA exemption calculated?

Accepted Answer

HRA exemption under Section 10(13A) is the least of three values: (1) actual HRA received from employer; (2) rent paid minus 10% of (basic + DA); (3) 50% of (basic + DA) if you live in a metro city, else 40%. Metro cities for FY 2026-27 are Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune, and Ahmedabad (per Income-tax Rules 2026). For FY 2025-26, only the original four metros (Delhi, Mumbai, Kolkata, Chennai) qualify for the 50% slab. HRA is available only in the old regime.

Question 5

What is the 87A rebate for FY 2026-27?

Accepted Answer

Under the new regime, taxable income up to 12,00,000 gets a rebate of up to 60,000, making tax effectively zero. Combined with the 75,000 standard deduction, a salaried person earning up to 12,75,000 pays no tax. Under the old regime, taxable income up to 5,00,000 gets a rebate of up to 12,500. The rebate applies only to slab tax, not to special-rate capital gains tax.

Question 6

What deductions are allowed in the new tax regime?

Accepted Answer

The new tax regime allows only: standard deduction of 75,000 (salaried), employer NPS contribution under 80CCD(2) up to 10% of basic+DA (14% for government), family pension deduction (one-third or 25,000 lower), and home loan interest on let-out property. HRA, LTA, 80C, 80D, 80E, 80G, 80TTA/TTB, and Section 24(b) on self-occupied are not available.

Question 7

What is the capital gains tax rate in India for FY 2026-27?

Accepted Answer

Per Finance Act 2024 (continuing in FY 2026-27): STCG on listed equity (Section 111A) is taxed at flat 20%. LTCG on listed equity (Section 112A) is taxed at 12.5% on gains above 1,25,000 (first 1.25L exempt). LTCG on other assets like property and gold (Section 112) is taxed at flat 12.5%. Surcharge on capital gains is capped at 15% in both regimes. The 87A rebate does not apply to capital gains tax.

Question 8

What is the maximum 80C deduction for FY 2026-27?

Accepted Answer

Section 80C deduction is capped at 1,50,000 (combined with 80CCC and 80CCD(1)). Eligible items include EPF (employee contribution), PPF, ELSS mutual funds, life insurance premium, principal repayment on home loan, 5-year tax-saving FD, NSC, Sukanya Samriddhi, ULIP, and tuition fees for up to 2 children. Section 80CCD(1B) gives an additional 50,000 for NPS, raising the combined cap to 2,00,000.

Question 9

How is surcharge calculated on income tax?

Accepted Answer

Surcharge applies on top of slab tax based on income: above 50L (10%), above 1Cr (15%), above 2Cr (25%). The old regime adds a 37% band above 5Cr, while the new regime caps surcharge at 25%. Marginal relief ensures crossing a threshold by a small amount does not produce a disproportionate tax. Surcharge on capital gains (Sections 111A, 112, 112A) is capped at 15% in both regimes.

Question 10

When is the ITR filing deadline for FY 2026-27?

Accepted Answer

For non-audit individuals and HUFs, the FY 2026-27 ITR (AY 2027-28) is due 31 July 2027. Audit cases are due 31 October 2027. Belated or revised returns can be filed up to 31 December 2027. ITR-U (updated returns) can be filed within 48 months of the end of AY. For FY 2025-26 (AY 2026-27), the non-audit deadline is 31 July 2026.