In this article
- Key dates and what happens if you file late
- 2026 tax slabs side-by-side
- The 5-step decision tree
- Breakeven income table — when does each regime win
- 4 worked examples (salaried, freelancer, home-loan, NPS)
- Switching rules — once a year vs once a lifetime
- What deductions are still allowed in the new regime
- 5 common ITR mistakes that cost money
- Frequently asked questions
Key dates and what happens if you file late
| Event | Date | What it means |
|---|---|---|
| Original ITR deadline (no audit) | 31 July 2026 | File before this to use the old regime |
| Tax audit ITR deadline | 31 October 2026 | For businesses/professionals requiring audit |
| Belated return last date | 31 March 2027 | You can file but with penalty + locked into new regime |
| Revised return last date | 31 March 2027 | Correct errors in earlier filed return |
| Updated return (ITR-U) last date | 31 March 2029 | Up to 36 months from end of AY — pay extra tax + interest |
2026 tax slabs side-by-side
| Income Band | Old Regime Rate | New Regime Rate (FY 2025-26) |
|---|---|---|
| Up to ₹2.5 lakh | Nil | Nil (up to ₹3L) |
| ₹2.5–3 lakh | 5% | Nil |
| ₹3–5 lakh | 5% | 5% (₹3–7L band) |
| ₹5–7 lakh | 20% | 5% |
| ₹7–10 lakh | 20% | 10% |
| ₹10–12 lakh | 30% | 15% |
| ₹12–15 lakh | 30% | 20% |
| Above ₹15 lakh | 30% | 30% |
Plus:
- Standard deduction — ₹50,000 in old regime, ₹75,000 in new regime (for salaried)
- Section 87A rebate — old regime gives up to ₹12,500 (income up to ₹5L tax-free); new regime gives up to ₹25,000 (income up to ₹7L tax-free)
- Health & education cess — 4% applies to both regimes on tax payable
The 5-step decision tree
- Is your annual income below ₹7 lakh? → New regime. The ₹25,000 rebate makes income up to ₹7L tax-free; old regime caps tax-free at ₹5L.
- Is your annual income above ₹7 lakh AND you have a home loan with significant interest (₹1.5–₹2L per year)? → Likely old regime. Section 24(b) interest deduction is worth a lot.
- Are you paying real rent and getting HRA from your employer? → Calculate HRA exemption; if substantial (₹1.5L+ per year), old regime is often better.
- Are you maxing out 80C (₹1.5L) + 80D (₹25K–75K) + NPS 80CCD(1B) (₹50K)? → If yes, run both regimes and compare. The combined deductions can tip the balance.
- None of the above? → New regime. Simpler, ₹75K standard deduction, no documentation hassle.
Breakeven income table — when does each regime win
This table assumes only standard deduction + 80C ₹1.5L + 80D ₹25K. Add HRA, home loan interest, NPS to see when old regime overtakes.
| Gross Salary | Old Regime Tax | New Regime Tax | Better Regime |
|---|---|---|---|
| ₹5,00,000 | ₹0 | ₹0 | Either |
| ₹7,00,000 | ₹26,000 | ₹0 | NEW (rebate) |
| ₹10,00,000 | ₹62,400 | ₹54,600 | NEW by ~₹7.8K |
| ₹12,50,000 | ₹1,17,000 | ₹83,200 | NEW by ~₹33K |
| ₹15,00,000 | ₹1,95,000 | ₹1,30,000 | NEW by ~₹65K |
| ₹20,00,000 | ₹3,51,000 | ₹2,80,800 | NEW by ~₹70K (basic case) |
At ₹20L+, if you add HRA (₹2L) + home-loan interest (₹2L) + NPS (₹50K), old regime starts catching up. Run both before filing.
4 worked examples
Example 1 — Salaried Bengaluru engineer, ₹12L CTC, lives in own flat
Deductions claimable in old regime: standard deduction ₹50K, 80C ₹1.5L (PF + ELSS), 80D ₹25K, no HRA (own house), no home loan interest claimed (already paid off).
Old regime tax: ~₹93,600. New regime tax (₹75K std ded only): ~₹78,000.
Example 2 — Mumbai salaried, ₹18L CTC, rented apartment, no investments
Old regime deductions: standard ₹50K, 80C ₹1.5L (PF auto), 80D ₹25K, HRA ₹2.5L (real rent ₹50K/month).
Old regime tax: ~₹2,11,000. New regime tax (₹75K std ded): ~₹2,02,800.
Example 3 — Delhi salaried, ₹22L CTC, ongoing home loan, NPS contributor
Old regime: standard ₹50K, 80C ₹1.5L, 80D ₹50K (parents covered), HRA NIL (own house), home loan interest ₹2L under 24(b), NPS ₹50K under 80CCD(1B).
Old regime tax: ~₹3,12,000. New regime tax: ~₹3,46,800.
Example 4 — Freelance designer, ₹15L turnover, no salary
Business/professional income — switching is once-in-a-lifetime. Must consider future plans. New regime is default. Standard deduction does NOT apply to non-salaried. Most deductions (80C, 80D) still NOT in new regime.
Default to new regime unless you have very high 80C/80D/NPS combined and a long career horizon to justify the switch.
Switching rules — once a year vs once a lifetime
- Salaried (no business income) — Can switch every year. Decide at the time of ITR filing. The default is new regime.
- Business or professional income — Can opt out of new regime only ONCE in a lifetime. After opting out, must stay in new regime. File Form 10-IEA before the ITR due date if opting for old.
- Default since FY 2023-24 — New regime. If you want old regime as a salaried person, you must explicitly select it in the ITR form. Many people miss this and end up paying more.
What deductions are still allowed in the new regime
The new regime is "simplified" — most deductions are gone, but a few survive:
- Standard deduction ₹75,000 (salaried) — biggest win for the new regime
- Section 80CCD(2) — Employer's NPS contribution up to 14% of basic salary (no limit on amount, just the % cap)
- Section 80CCH — Agniveer Corpus Fund contribution
- Transport allowance for differently-abled employees
- Conveyance allowance for official duty
- Section 24(b) — home loan interest for LET-OUT property (not self-occupied)
- Family pension deduction — ₹15,000 or 1/3 of pension, whichever is less
NOT allowed in new regime: 80C (PPF, ELSS, life insurance, etc), 80D (medical insurance), 80E (education loan interest), 80G (donations), HRA exemption, LTA, home loan interest for self-occupied house, 80CCD(1B) self-NPS, professional tax.
5 common ITR mistakes that cost money
- Defaulting into new regime when old would have saved more — happens to anyone with a home loan + HRA who forgets to opt for old regime in the ITR form.
- Forgetting to e-verify within 30 days — return is treated as not filed. Use Aadhaar OTP, net banking, or DSC.
- Mismatched bank account in pre-fill — refund goes to old/closed account. Always validate the bank account in the portal.
- Missing interest income from FDs, savings accounts, and P2P platforms — AIS (Annual Information Statement) shows everything; mismatch triggers notices.
- Capital gains under-reporting — sold a stock, mutual fund or property? AIS has the records. Use Schedule CG correctly.
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Compare Offers →Frequently asked questions
What is the ITR filing deadline for FY 2025-26?
July 31, 2026 for individuals not requiring audit. Belated/revised return until March 31, 2027 — but belated filing locks you into the new regime and adds a ₹5,000 late fee (₹1,000 if income below ₹5L) plus 1% per month interest on unpaid tax.
What are the income tax slabs in the new regime FY 2025-26?
Up to ₹3L — Nil. ₹3-7L — 5%. ₹7-10L — 10%. ₹10-12L — 15%. ₹12-15L — 20%. Above ₹15L — 30%. Plus standard deduction ₹75K (salaried) and section 87A rebate up to ₹25K (income up to ₹7L effectively tax-free after rebate).
What are the income tax slabs in the old regime?
Up to ₹2.5L — Nil. ₹2.5-5L — 5%. ₹5-10L — 20%. Above ₹10L — 30%. Senior citizens (60+): ₹3L nil; super-seniors (80+): ₹5L nil. Old regime allows 80C, 80D, HRA, LTA, home loan interest, NPS, 80G and more.
At what income does the new regime become better than the old?
For salaried Indians with only standard deduction + 80C + 80D + average HRA, the new regime usually wins up to ₹15-16L gross. Above that, if you maximise 80C + 80D + HRA + home loan interest + NPS, old regime can win. Run both before deciding.
Can I switch between regimes every year?
Salaried (no business income) can switch every year while filing. Business/professional income can opt out of new regime only ONCE in a lifetime — after that you stay in new regime. From FY 2023-24, new regime is the DEFAULT; salaried people must actively opt for old regime.
What deductions are allowed in the new regime FY 2025-26?
Standard deduction ₹75K (salaried), employer's NPS under 80CCD(2) (up to 14% basic), Agniveer corpus under 80CCH, transport allowance for differently-abled, conveyance for official duty, and home loan interest for LET-OUT property only. NOT allowed: 80C, 80D, HRA, LTA, home loan interest for self-occupied, 80CCD(1B) self-NPS, 80G donations.
What happens if I file my ITR late?
Belated return until March 31, 2027 with: late fee ₹5K (₹1K if income below ₹5L), 1% per month interest on unpaid tax, FORCED into new regime (no old-regime deductions), cannot carry forward most losses. Filing on time matters even if you owe no tax.