The Income-tax Act, 2025 and the Tax Year
The Income-tax Act, 2025 came into force on 1 April 2026, replacing the Income-tax Act, 1961. It is largely a simplification: tax rates and slabs did not change, but sections and forms were renumbered and the language was simplified.
The biggest visible change is the Tax Year. The old "previous year" (when income was earned) and "assessment year" (when it was assessed) are replaced by one term. Tax Year 2026-27 runs from 1 April 2026 to 31 March 2027.
New tax regime slabs (default)
The new regime is the default. Budget 2026 made no change to the slabs, so these apply for 2026-27 as they did for 2025-26:
| Taxable income | Tax rate |
|---|---|
| Up to ₹4 lakh | Nil |
| ₹4 lakh – ₹8 lakh | 5% |
| ₹8 lakh – ₹12 lakh | 10% |
| ₹12 lakh – ₹16 lakh | 15% |
| ₹16 lakh – ₹20 lakh | 20% |
| ₹20 lakh – ₹24 lakh | 25% |
| Above ₹24 lakh | 30% |
- A rebate of up to ₹60,000 makes income up to ₹12 lakh effectively tax-free for residents (not applicable to special-rate income such as certain capital gains).
- Salaried individuals and pensioners get a standard deduction of ₹75,000, so salary up to ₹12.75 lakh can be tax-free.
- A 4% health and education cess applies on tax, and surcharge applies on higher incomes.
Old tax regime slabs
| Taxable income | Tax rate (below 60 years) |
|---|---|
| Up to ₹2.5 lakh | Nil |
| ₹2.5 lakh – ₹5 lakh | 5% |
| ₹5 lakh – ₹10 lakh | 20% |
| Above ₹10 lakh | 30% |
The basic exemption is higher for senior citizens (₹3 lakh from 60 years, ₹5 lakh from 80 years). The old regime has higher rates but allows deductions and exemptions such as the old Section 80C investments (now Section 123), health insurance, HRA and home loan interest.
Which regime should you choose?
There's no single answer. As a rough guide:
- If you have few deductions, the new regime is usually better.
- If you claim large deductions (for example home loan interest, HRA and full investment deductions together), the old regime may still save tax.
Which ITR form do you need?
| Form | Generally used by |
|---|---|
| ITR-1 (Sahaj) | Resident individuals with salary or pension, one house property and other income such as interest, with total income up to ₹50 lakh |
| ITR-2 | Individuals and HUFs without business income, including those with capital gains or more than one house property |
| ITR-3 | Individuals and HUFs with business or professional income |
| ITR-4 (Sugam) | Residents opting for presumptive taxation of business or professional income, within the limits |
| ITR-5 / 6 / 7 | Firms and LLPs / companies / trusts and certain institutions |
Filing on the wrong form can make your return defective, so check eligibility conditions each year.
ITR due dates
For income earned in 2025-26, the due dates in 2026 are:
| Taxpayer | Due date |
|---|---|
| ITR-1 and ITR-2 (individuals, no audit) | 31 July |
| ITR-3 and ITR-4 (business or professional income, no audit) | 31 August |
| Tax audit report | 30 September |
| Audit cases, including companies | 31 October |
| Transfer pricing cases | 30 November |
| Belated return | 31 December |
Documents to keep ready
- PAN and Aadhaar
- Form 16 from your employer
- Annual Information Statement (AIS) and Form 26AS
- Bank interest certificates
- Capital gains statements from brokers and fund houses
- Investment, insurance and home loan proofs (old regime)
- Rent receipts and rental income details
Review your AIS carefully. Income reported there but missing from your return is a common reason for notices.
Last updated 29 September 2026. This page is general information based on the rules in force on that date, not professional advice. Tax rules, rates and due dates can change through budgets and government notifications. Contact us to confirm what applies to your situation.