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Tax Guide

FY 2026-27 · Income-tax Act, 2025

A plain-language summary of how income and investments are taxed in India for FY 2026-27, the first year under the new Income-tax Act, 2025. Use it to plan, and confirm your own position with a tax adviser.

₹12 LTaxable income with zero tax under the new regime
₹75KStandard deduction for salaried taxpayers
12.5%Long-term gains on equity above ₹1.25 lakh
20%Short-term gains on listed equity
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Plan Your Taxes in 4 Steps

1

Pick a Regime

Compare new and old for your income

2

Use Deductions

If the old regime suits you better

3

Harvest Gains

Use the ₹1.25 lakh yearly LTCG exemption

4

File on Time

Report gains and foreign assets correctly

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New Regime Slabs for FY 2026-27

The new regime is the default. Resident individuals with taxable income up to ₹12 lakh pay no tax because of the rebate, and salaried taxpayers also get a ₹75,000 standard deduction. A 4% health and education cess applies on the tax.

Taxable incomeTax rate
Up to ₹4 lakhNil
₹4 lakh – ₹8 lakh5%
₹8 lakh – ₹12 lakh10%
₹12 lakh – ₹16 lakh15%
₹16 lakh – ₹20 lakh20%
₹20 lakh – ₹24 lakh25%
Above ₹24 lakh30%
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How Investments Are Taxed

InvestmentShort-termLong-term
Listed equity & equity funds20%, if held up to 12 months12.5% on gains above ₹1.25 lakh a year
Debt funds bought after 1 April 2023Your slab rateYour slab rate
FD and bond interestYour slab rateYour slab rate
Listed bonds and gold ETFs (on sale)Slab rate, if held up to 12 months12.5% after 12 months
Mutual fund IDCW (dividends)Your slab rateYour slab rate
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Old Regime Deductions Investors Use

Tax-Saving Investments

ELSS, PPF, life insurance premiums and more, up to ₹1.5 lakh a year (formerly Section 80C).

Health Insurance

Premiums for yourself, family and parents, within the prescribed limits (formerly Section 80D).

NPS

An extra deduction of up to ₹50,000 for your own NPS contributions (formerly Section 80CCD(1B)).

Home Loan Interest

Interest on a self-occupied home, up to ₹2 lakh a year.

Key Points

Smart Tax Moves

FAQs

Questions, answered

Which regime should I choose?
If your deductions are small, the new regime usually costs less. If you claim large deductions, such as home loan interest, ₹1.5 lakh of investments, health insurance and NPS, the old regime may still be cheaper. Calculate both each year.
What changed with the Income-tax Act, 2025?
From 1 April 2026 the new Act replaced the 1961 Act. It uses a single "tax year" instead of previous year and assessment year and renumbers many sections, while slab rates for FY 2026-27 stayed the same.
How are SIP redemptions taxed?
Each SIP instalment counts as a separate purchase, so the holding period runs from each instalment date, on a first-in, first-out basis.
Is tax deducted when I redeem mutual funds?
For resident investors, no TDS is deducted on mutual fund capital gains; you pay tax when you file. For NRIs, TDS applies at the time of redemption.
Are mutual fund dividends taxable?
Yes. IDCW payouts are added to your income and taxed at your slab rate, with TDS above the yearly threshold.
Downloads

Tax Guide Archive

Financial yearTax regimeDownload
FY 2020-21Old regime, with the new regime introduced as an optionPDF
FY 2019-20Old regimePDF
FY 2018-19Old regimePDF
FY 2016-17Old regimePDF
FY 2015-16Old regimePDF
FY 2014-15Old regimePDF
FY 2013-14Old regimePDF

Archived guides reflect the rules of their year and are kept for reference only.

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This guide is general information based on rules applicable to FY 2026-27 and is not tax advice. Tax laws change; please consult a qualified tax professional.