Income Tax Guide for India FY 2025-26

Old vs New regime — quick comparison

Deep dive: Old vs New Regime.

New Tax Regime slabs (FY 2025-26 — illustrative)

Budget 2025 revised New Regime slabs. Verify exact brackets in calculator — structure commonly cited:

Section 87A: Rebate expansion can make income up to ₹12 lakh effectively tax-free under New Regime for many individuals — salaried with ₹75,000 standard deduction may see higher effective threshold. Run Salary Tax Calculator with your CTC.

Key deductions (Old Regime)

Use Section 80C Calculator, Section 80D Calculator, HRA Calculator, NPS Tax Benefit Calculator.

Real-world example: Rohit (Pune, ₹18L CTC)

Profile: ₹1,15,000 in-hand, ₹22,000 rent (metro), ₹1.2L PPF + ELSS, ₹25K health premium (self), ₹50K NPS 80CCD(1B).

Rohit runs both in Income Tax Calculator each November before March investment rush. Do not buy ELSS solely for tax if New Regime is optimal.

Capital gains tax (high level — verify ITD)

Use Capital Gains Tax Calculator. Harvest losses where permitted under current rules.

TDS and salaried workflow

Employers deduct TDS on salary per declared regime and Form 12B/12BB proofs. Freelancers face advance tax quarters if liability exceeds threshold. Match Form 26AS / AIS before filing ITR.

Tax planning calendar for salaried Indians

Common tax mistakes

• Default New Regime while paying large HRA rent and max 80C — overpaying tax
• Buying ULIP/endowment for 80C — high cost, poor flexibility
• Ignoring 80CCD(1B) when already in NPS
• Not declaring other income (FD interest, freelance)
• Missing ITR deadline — penalties and interest
• Claiming HRA while living with parents without valid documentation

Regime selection checklist

✓ Total 80C + 80D + HRA + home loan interest estimated ✓ Both regimes run in Income Tax Calculator ✓ Regime declared to employer matches filing plan ✓ Capital gains and FD interest included ✓ Proof documents collected for Old Regime claims

Frequently Asked Questions

Which regime is default for FY 2025-26?

New Tax Regime is default. Opt into Old Regime when filing or inform employer if supported.

Is income up to ₹12 lakh tax-free under New Regime?

Section 87A rebate expansion makes this true for many — verify with calculator including standard deduction.

What is Section 80C limit?

Typically ₹1.5 lakh combined across PPF, ELSS, EPF (employee contribution), LIC premium, etc. under Old Regime.

Can I claim HRA under New Regime?

Generally no — HRA exemption is an Old Regime benefit. Verify current IT rules.

Is NPS tax-deductible?

Employee NPS under 80CCD(1) within overall 80C ceiling; additional ₹50,000 under 80CCD(1B) in Old Regime — verify limits.

How is FD interest taxed?

Added to income, taxed at slab rate. TDS may apply above ₹40,000 interest (₹50,000 senior — verify thresholds).

When is advance tax due?

Quarterly instalments if estimated liability exceeds prescribed threshold — check ITD due dates.

Old Regime with ₹8L CTC?

Worth calculating — if minimal deductions, New Regime may still win despite lower 80C use.

Tax on mutual fund redemption?

Depends on equity vs debt and holding period — use Capital Gains Tax Calculator.

Where to verify official slabs?

Income Tax Department website and Budget memorandum — use Hannav calculator locked to FY 2025-26 as planning tool.

Your action plan

1. Gather Form 16, rent receipts, 80C proofs 2. Run Income Tax Calculator — Old vs New 3. Declare optimal regime to employer 4. Fill 80C gaps by January if Old Regime wins 5. File ITR on time with AIS reconciliation