Tax & Finance
Income Tax
A simple guide to income-tax slabs, deductions, tax regimes, filing and important compliance requirements in India.
Tax
Direct Tax
New Regime
0% – 30%
Old Regime
Deductions
Assessment
AY 2026–27
Filing
Income Tax Portal
Overview
What is Income Tax?
Income tax is a direct tax charged on taxable income earned by individuals, HUFs, firms, companies and other taxable entities.
Individuals
Taxed based on applicable individual rules.
Businesses
Companies and firms follow entity-specific rules.
Tax Rate
Depends on income and applicable regime.
AY 2026–27
New Tax Regime
The New Tax Regime is the default regime for eligible individual taxpayers.
Eligible resident individuals with taxable income up to ₹12 lakh may receive a Section 87A rebate of up to ₹60,000, subject to applicable conditions.
Alternative
Old Tax Regime
The Old Tax Regime allows eligible taxpayers to claim various deductions and exemptions.
Senior and super-senior citizens have different basic exemption limits under the Old Tax Regime.
Tax Benefits
Important Deductions
Section 80C
Eligible investments and payments can qualify for deductions up to ₹1.5 lakh under the Old Regime.
Section 80D
Deduction may be available for eligible health insurance premiums.
Section 80E
Eligible education-loan interest may qualify for deduction.
Section 24(b)
Eligible home-loan interest may qualify for deduction.
Section 80CCD
Eligible NPS contributions may receive tax benefits.
80TTA / 80TTB
Specified savings or interest income may qualify for deductions.
Additional Tax
Health & Education Cess
4% Cess
A Health and Education Cess of 4% is levied on income tax plus applicable surcharge.
Who Pays?
Income Tax for Different Taxpayers
Salaried
Taxed under applicable individual slabs, with eligible deductions or standard deduction.
Self-Employed
Taxed on taxable business or professional income under applicable rules.
Partnership / LLP
Taxed under provisions applicable to firms and LLPs.
Companies
Companies follow separate corporate tax provisions.
Compliance
Filing an Income Tax Return
Income Tax Returns can be filed through the official Income Tax e-Filing Portal. The correct ITR form depends on the taxpayer's income and financial circumstances.
ITR-1
ITR-2
ITR-3
ITR-4
The applicable form depends on salary, house property, capital gains, business income, foreign assets and other factors.
Deadline
Income Tax Return Due Date
AY 2026–27
For many individuals not required to undergo tax audit, the due date was 31 July 2026. Different deadlines may apply to audited taxpayers and specific cases.
Always verify the applicable deadline for the relevant assessment year because filing dates can change.
Tax Payments
Advance Tax & TDS
Advance Tax
Taxpayers above the applicable liability threshold may need to pay tax in instalments during the financial year.
TDS
Tax may be deducted at source from salary, interest, rent, professional payments and other specified income.
Tax Planning
New vs Old Tax Regime
New Regime
- Lower slab rates
- Default regime
- Higher 87A rebate threshold
- Many deductions restricted
Old Regime
- More deductions and exemptions
- Useful for eligible investments
- Home-loan benefits may apply
- Health insurance deductions may apply
Compare your estimated tax liability under both regimes before choosing the option that suits your financial situation.
Important
Penalties & Interest
Late Filing
Late fees or other consequences may apply.
Interest
Interest may apply on unpaid tax liabilities.
Incorrect Reporting
Under-reporting or inaccurate returns may have consequences.
Checklist
Before Filing Your Return
Choose the appropriate tax regime.
Collect salary and income information.
Check eligible deductions and exemptions.
Verify TDS and tax credits.
Check capital gains and other income.
File the correct ITR form.
Verify the applicable due date.
Keep financial records and supporting documents.
FAQs
Income Tax Questions
Which tax regime should I choose?+
Compare your estimated tax under both regimes. The better option depends on your income, investments, deductions and exemptions.
What is the Section 87A rebate?+
Eligible resident individuals may receive a rebate on tax payable, subject to the income threshold and applicable conditions.
Can I claim 80C deductions under the New Regime?+
Most common 80C deductions are generally not available under the New Tax Regime.
What is TDS?+
Tax Deducted at Source is tax withheld from specified payments and credited against the taxpayer's tax liability.
Who needs to pay advance tax?+
Taxpayers whose estimated tax liability exceeds the applicable threshold may need to pay advance tax during the financial year.
Conclusion
Plan Your Taxes Carefully
Income tax depends on your income, tax regime, deductions, exemptions and other financial circumstances. Compare both regimes, maintain accurate records and file your return on time.
Always verify the latest tax rules and filing requirements before making tax decisions.
Disclaimer
Income-tax laws, slabs, deductions, return forms, deadlines and compliance requirements can change. This information is a general overview and is not personalised tax or legal advice. Consult a qualified Chartered Accountant or tax professional for specific tax decisions.
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