Old versus new tax regime

The old versus new income tax regime choice is the decision that most changes what a central government employee or pensioner pays. For the financial year 2026-27 the new regime is the default under Section 202 of the Income-tax Act, 2025 and taxes nothing up to a salary of Rs. 12.75 lakh, while the old regime must be positively chosen and keeps the full catalogue of deductions at higher rates.

For most employees the answer is the new regime, and the reason is arithmetic rather than preference. The old regime overtakes it only once deductions other than the standard deduction reach a break-even that starts at Rs. 4,50,000 on a gross salary of Rs. 10 lakh and settles at exactly Rs. 8,00,000 on any gross salary above Rs. 24.75 lakh. Below a gross salary of Rs. 12.75 lakh the new regime cannot be beaten at all, because the tax there is nil and no quantity of deductions improves on nil.

The financial year 2026-27 is the first tax year governed by the Income-tax Act, 2025, which repealed the Income-tax Act, 1961 from 1 April 2026. Nothing a government employee pays changed: the Finance Act 2026 left both slab tables, the rebate, the standard deduction, the surcharge and the cess exactly where they stood. What changed is where the provisions sit in the statute book, and this article names both the familiar 1961 numbers and their 2025 counterparts.

What follows is the slab table of each regime, the standard deduction and the Section 87A rebate with its marginal relief, the cess and the surcharge, the full list of what each regime allows, the break-even quantum of deductions at seven salary levels, worked examples on both sides of the crossover, and the pensioner and high-earner cases. For the wider computation see income tax for government employees; for the individual reliefs see the standard deduction, the Section 87A rebate and the house rent allowance articles.

The two regimes at a glance

The new regime taxes a larger base at lower rates and the old regime taxes a smaller base at higher rates. Every other difference follows from that one, and the table below sets out the whole comparison for the financial year 2026-27.

The single line to carry away is that the new regime leaves a salaried employee or pensioner with two deductions worth having, the standard deduction and the employer’s National Pension System contribution, and prices that loss into the slab table.

Governing statute for the financial year 2026-27

The financial year 2026-27 is governed by the Income-tax Act, 2025, not the Income-tax Act, 1961. The new Act, Act No. 30 of 2025, received the President’s assent on 21 August 2025 and came into force on 1 April 2026, repealing the 1961 Act from that date. It cuts the statute from 819 sections to 536 and from 47 chapters to 23, and it replaces the twin concepts of the previous year and the assessment year with a single tax year.

Both regimes survive the change intact. The rates are not in the Income-tax Act at all: they are set each year by the Finance Act, and the Finance Act 2026 left the slabs, the rebate, the standard deduction, the surcharge and the cess of both regimes unchanged. The consolidated text published by the Central Board of Direct Taxes is titled the Income-tax Act, 2025 as amended by the Finance Act, 2026.

The section numbers moved, and the familiar ones no longer resolve against the bare Act. The mapping that matters to a salaried employee or pensioner choosing a regime is this.

Two of these rest on firmer ground than the others. The Income Tax Department states the Section 115BAC to Section 202 mapping outright in its own guidance and hosts a utility comparing the 1961 provisions with the 2025 Act; the house rent allowance move to Schedule III is fixed by Central Board of Direct Taxes Notification No. 22/2026, G.S.R. 198(E), dated 20 March 2026, which notified the Income-tax Rules, 2026. The remaining rows are read off the bare Act and are consistent across commentaries, but the substance of each relief is unchanged either way. This article uses the 1961 numbers as the primary reference throughout, because orders, circulars and everyday practice are still written in them.

One transition rule catches anyone filing in 2026. Income earned up to 31 March 2026, that is the financial year 2025-26 and assessment year 2026-27, remains governed by the Income-tax Act, 1961, and the 2025 Act applies only to income earned from 1 April 2026 onward.

How the two regimes came about

The two-regime system is six years old. Until the financial year 2020-21 there was a single set of slabs with the full range of deductions. The Finance Act 2020 introduced the new regime under Section 115BAC as an optional low-rate structure without most deductions. For three years it was the minority choice, because its rates were only modestly lower and it stripped away everything an employee was used to claiming.

The Finance Act 2023 changed the trajectory. It made the new regime the default from the financial year 2023-24, extended the Rs. 50,000 standard deduction to it, and raised its rebate to cover a total income of Rs. 7 lakh. The Finance Act 2025 went further, widening the slabs to seven bands and lifting the rebate so that a total income of Rs. 12 lakh became tax-free, and raising the new-regime standard deduction to Rs. 75,000.

Each step pulled more taxpayers across. The new regime today is not the bare-bones option it was in 2020: it has been made deliberately attractive, and the old regime now survives on the strength of a specific deduction profile rather than on habit.

The slabs for the financial year 2026-27

The new regime runs seven bands from a nil rate up to Rs. 4 lakh to 30% above Rs. 24 lakh, and the old regime runs four bands from a nil rate up to Rs. 2.5 lakh to 30% above Rs. 10 lakh. Both tables were set by the Finance Act 2025 and left unchanged by the Finance Act 2026.

Under the new regime, on total income:

The new regime gives a single basic exemption of Rs. 4 lakh at every age. There is no higher slab for a senior citizen, which is the point that matters most to a pensioner weighing the two.

Under the old regime, for an individual below 60:

The old regime keeps the age-based basic exemption: Rs. 2,50,000 below 60, Rs. 3,00,000 for a senior citizen aged 60 to below 80, and Rs. 5,00,000 for a super-senior citizen aged 80 and above. The jump from 5% to 20% at Rs. 5 lakh, and to 30% at Rs. 10 lakh, is what makes the old regime expensive on a mid-level government salary once the deductions run out.

Standard deduction and the Section 87A rebate

The standard deduction is Rs. 75,000 under the new regime and Rs. 50,000 under the old, and the Section 87A rebate is up to Rs. 60,000 under the new regime and up to Rs. 12,500 under the old. Together these two decide the tax at the lower end of both tables, and together they produce the Rs. 12.75 lakh figure that dominates the comparison.

The standard deduction sat in Section 16(ia) of the 1961 Act and now sits in Section 19 of the Income-tax Act, 2025. It applies to salary and to a service pension alike, and it is granted automatically with no proof and no declaration. It is not available against a family pension, which is taxed as income from other sources under its own deduction. Applying the Rs. 75,000 figure under the old regime, where it is Rs. 50,000, is the most common single error in this comparison.

The Section 87A rebate, renumbered Section 156, is what makes the low end of the new regime tax-free. Under the new regime the rebate cancels the tax on a total income up to Rs. 12,00,000, at which point the slab tax is exactly Rs. 60,000; combined with the Rs. 75,000 standard deduction, a salaried employee or pensioner pays nothing up to a gross salary or pension of Rs. 12.75 lakh. Under the old regime the rebate reaches Rs. 12,500, cancelling the tax on a total income up to Rs. 5,00,000, which is a gross salary of Rs. 5.5 lakh after the Rs. 50,000 standard deduction. The rebate is for resident individuals only, and it does not apply to income taxed at special rates such as long-term capital gains under Section 112A.

Marginal relief above Rs. 12 lakh

Marginal relief caps the tax at the amount by which total income exceeds Rs. 12 lakh, so that crossing the rebate limit by a rupee does not cost Rs. 60,000. At a total income of Rs. 12,10,000 the slab tax under the new regime would be Rs. 61,500, but the excess over Rs. 12 lakh is Rs. 10,000, so the tax is limited to Rs. 10,000 before the 4% cess.

The relief tapers out at a total income of Rs. 12,70,588, the point at which the slab tax and the excess over Rs. 12 lakh are both Rs. 70,588. Above that figure the ordinary slab tax applies in full and the relief does nothing. The marginal relief article works the taper through in detail, and a separate marginal relief operates at each surcharge threshold.

The band between a gross salary of Rs. 12.75 lakh and Rs. 13.46 lakh is where the comparison misbehaves. The new regime’s tax there is held down by marginal relief while the old regime is already taxing from Rs. 2.5 lakh, so the deductions the old regime needs to break even briefly rise to nearly Rs. 8.8 lakh before falling back. An employee whose salary sits in that band should compute both ways rather than read a rule of thumb.

Cess and surcharge

A Health and Education Cess of 4% is added to the tax and any surcharge in both regimes, and because the rate is identical on both sides it never shifts the choice between them. It is charged on the tax, not on income, and it is computed after marginal relief.

The surcharge does shift the choice, but only above a total income of Rs. 50 lakh. Both regimes charge 10% above Rs. 50 lakh, 15% above Rs. 1 crore and 25% above Rs. 2 crore. The old regime adds a fourth band of 37% above Rs. 5 crore that the new regime does not have, because the new regime caps the surcharge at 25%. In both regimes the surcharge on dividend income and on income chargeable under Sections 111A, 112, 112A and 115AD(1)(b) is capped at 15%. The surcharge on income tax article carries the full rate table.

What each regime allows

Six deductions survive in the new regime and everything else is old-regime only. The table below lists the items a central government employee or pensioner actually claims, with the amount available on each side for the financial year 2026-27.

Three exemptions sit outside the comparison entirely because they do not depend on the regime. Gratuity is fully exempt for a government employee, the commuted portion under commutation of pension is fully exempt, and leave encashment on retirement is fully exempt. A retiring employee gains nothing by switching regime in the year of retirement to protect them. The deductions allowed in the new tax regime article covers the surviving six in detail.

What the choice turns on for a serving employee

Four points decide the regime for a serving central government employee, and the first of them is the one most often got wrong.

The employer’s National Pension System contribution under Section 80CCD(2) is neutral, not an advantage. The employer contributes 14% of basic pay plus dearness allowance to the employee’s National Pension System account, that amount is added to salary, and it is then deducted under Section 80CCD(2) in both regimes. Because the deduction is available either way, it reduces the taxable base equally on both sides and cancels out of the comparison. It should be excluded from any break-even calculation, and counting it as an old-regime deduction is the fastest way to reach the wrong answer.

The employee’s own contributions are old-regime only. The employee’s share of NPS under Section 80CCD(1), the additional Rs. 50,000 under Section 80CCD(1B), and the whole Rs. 1.5 lakh of Section 80C that a General Provident Fund subscription feeds are allowed only under the old regime. For an employee in the Old Pension Scheme, the compulsory General Provident Fund subscription of at least 6% of emoluments is a real deduction that exists only on the old side.

The house rent allowance exemption is old-regime only, and it is usually the item that decides the case. For an employee paying high rent in an X-class city the exemption can run past Rs. 2 lakh, which on its own is a quarter of the way to the break-even. An employee in government accommodation draws a licence fee instead of house rent allowance and therefore has no exemption to claim, which makes the new-regime case for that employee close to automatic. The city classification for HRA and the HRA exemption calculator work the exemption out.

The entertainment allowance deduction has left the ledger entirely from the tax year 2026-27. Section 16(ii) of the Income-tax Act, 1961 had allowed a government employee, and nobody else, the least of Rs. 5,000, one-fifth of basic salary or the amount actually received, and the Income-tax Act, 2025 enacts no counterpart to it: the Table in Section 19(1) runs from professional tax at serial 1 to the standard deduction at serial 2 and then into the gratuity and pension reliefs. It was never large enough to decide the regime question, but it no longer sits on the old-regime side at all. The professional tax deduction does survive, at serial 1, and Section 202(2)(a)(iv) bars it in the new regime, so it stays an old-regime item where a state levies the tax.

Break-even deductions by salary

The break-even is the quantum of old-regime deductions, excluding the standard deduction, at which the two regimes produce the same tax. The table below is a salary-calculator.in computation, derived by setting the old-regime tax equal to the new-regime tax at each gross salary and solving for the deductions, for an individual below 60 with no income other than salary and no surcharge.

Two features of that table are worth stating plainly, because neither is obvious.

The break-even stops rising at Rs. 8,00,000. Once the new-regime taxable income clears Rs. 24 lakh and the old-regime taxable income clears Rs. 10 lakh, both regimes tax the marginal rupee at 30% and every further rupee of salary cancels out of both sides of the equation. Above a gross salary of Rs. 24.75 lakh the crossover is a flat Rs. 8,00,000 of deductions regardless of how high the salary goes, up to the Rs. 50 lakh surcharge threshold where the 25% cap begins to favour the new regime again. An officer on Rs. 30 lakh and an officer on Rs. 45 lakh face the same target.

The break-even is highest, not lowest, at the tax-free ceiling. At a gross salary of Rs. 12.75 lakh the new regime pays nothing, so the old regime must also pay nothing, which requires driving total income down to Rs. 5,00,000 and therefore Rs. 7,25,000 of deductions. That is more than the Rs. 5,43,750 needed at a gross salary of Rs. 15 lakh. The rebate makes the new regime hardest to beat exactly at the point where it stops applying, which is why the rule of thumb that the old regime gets better as income falls is the wrong way round below Rs. 13.5 lakh.

The 4% cess is charged at the same rate in both regimes, so it scales both sides equally and does not move any figure in the table. The tax regime break-even guide and the income tax calculator apply the same computation to a specific salary and deduction profile.

Worked example where the old regime wins

An employee on a gross salary of Rs. 15,00,000 with Rs. 5,70,000 of old-regime deductions pays Rs. 92,040 against the new regime’s Rs. 97,500, so the old regime wins by Rs. 5,460. The margin is thin because Rs. 5,70,000 is only Rs. 26,250 past the Rs. 5,43,750 break-even at that salary, and that excess is worth 20% in tax plus cess.

The deductions in that example are the full slate: Rs. 1,50,000 under Section 80C from the General Provident Fund and other savings, Rs. 50,000 under Section 80CCD(1B) for additional NPS, Rs. 25,000 under Section 80D for health insurance, Rs. 2,00,000 of home-loan interest on a self-occupied house under Section 24(b), and a house rent allowance exemption of Rs. 1,45,000. With the Rs. 50,000 standard deduction on top, total income falls to Rs. 8,80,000, on which the old-regime tax is Rs. 12,500 on the second slab plus 20% of Rs. 3,80,000, that is Rs. 88,500, or Rs. 92,040 with the 4% cess.

The advantage is fragile. Strip out the home-loan interest alone, leaving Rs. 3,70,000 of deductions, and total income rises to Rs. 10,80,000, the old-regime tax rises to Rs. 1,36,500, or Rs. 1,41,960 with cess, and the new regime is ahead by Rs. 44,460. The old regime rewards a specific financial life: a home loan on a self-occupied house, a full savings basket, and a real rent outgo. For an employee who rents modestly, has no home loan, and saves nothing beyond the compulsory provident fund subscription, the new regime wins at every income level.

Note also that an employee claiming a house rent allowance exemption and a self-occupied home-loan interest deduction at the same time must be able to justify both, which requires the house on which the loan is taken to be genuinely unoccupied or in a different city from the place of posting.

A pensioner’s comparison

A pensioner is better off under the new regime in almost every case, because a pension up to Rs. 12.75 lakh pays nothing at all and the two old-regime advantages are worth nothing below that ceiling. Those advantages are the age-based basic exemption, Rs. 3,00,000 from age 60 and Rs. 5,00,000 from age 80 against the flat Rs. 4,00,000 of the new regime, and the Section 80TTB deduction of up to Rs. 50,000 on interest from bank and post-office deposits.

Take a pensioner aged 65 drawing Rs. 8,00,000 of pension with Rs. 50,000 of deposit interest. Under the new regime the Rs. 75,000 standard deduction brings total income to Rs. 7,75,000, which is below Rs. 12 lakh, so the Section 87A rebate cancels the tax entirely and the liability is nil. Under the old regime, after the Rs. 50,000 standard deduction and the full Rs. 50,000 of Section 80TTB, total income is Rs. 7,50,000 and the tax is Rs. 10,000 on the 5% band plus Rs. 50,000 on the 20% band, that is Rs. 60,000, or Rs. 62,400 with cess. The old regime costs this pensioner Rs. 62,400 for the privilege of claiming Section 80TTB.

Above the ceiling the age exemption is worth less than it looks. At a pension of Rs. 15,00,000 the break-even for a pensioner aged 60 to 79 is Rs. 5,31,250 of deductions, against Rs. 5,43,750 for someone below 60. The extra Rs. 50,000 of exemption is taxed at 5% in the old regime and therefore saves Rs. 2,500, no more. For a super-senior pensioner aged 80 and above the break-even falls to Rs. 4,81,250, a saving of Rs. 12,500 in tax. Section 80TTB supplies at most Rs. 50,000 of the Rs. 5 lakh or so required, so the old-regime case for a pensioner rests on health insurance premiums under Section 80D, a continuing home loan, and Section 80C investments outside the pension.

A family pension follows different rules again. It is taxed as income from other sources, not as salary, so it gets no standard deduction in either regime. Instead Section 57(iia) allows the lower of one-third of the family pension or Rs. 25,000 under the new regime and Rs. 15,000 under the old, which is one of the few line items where the new regime is more generous than the old in rupee terms.

Arrears, Section 89 relief and the regime choice

Relief on arrears under Section 89, renumbered Section 157 of the Income-tax Act, 2025, is computed on the regime that actually applied in each earlier year, not on the regime chosen in the year of receipt. This matters to central government employees more than most, because a dearness allowance revision, a pay fixation order or a pay commission implementation routinely pays out for periods two or three years back.

The mechanism is a two-part recomputation. The tax on the total income of the year of receipt is worked out with and without the arrears, and the tax of each earlier year to which the arrears relate is worked out with and without its share; the relief is the excess of the first difference over the second. An employee who was taxed under the old regime in the financial year 2023-24 and is on the new regime now cannot recompute 2023-24 on the new regime’s slabs, because the relief looks at the tax that was actually payable in that year.

The form changed with the Act. Relief under Section 89 was claimed on Form 10E before the return; from the tax year 2026-27 it is claimed on Form 39 under the Income-tax Rules, 2026. For the financial year 2025-26 return filed during 2026, Form 10E is still the correct form. The Section 89 relief article and the how to fill Form 10E guide cover the computation and the filing.

Declaring the regime to the employer

The declaration made to the office fixes only the monthly tax deducted at source under Section 192, and it does not bind the regime chosen in the return. An employee tells the Drawing and Disbursing Officer which regime to apply and declares the deductions being claimed on Form 12BB, renumbered Form 124 under the Income-tax Rules, 2026, so that the deduction each month approximates the final liability.

The final choice is made at filing, and it may differ. An employee who declared the new regime to the office in April and finds at filing that the old regime is cheaper simply files under the old regime and claims a refund of the excess deducted. The reverse also works, though it produces a balance payable along with interest under Sections 234B and 234C where the shortfall is large, so the mismatch is cheaper in one direction than the other.

The sensible course is to run both regimes once early in the financial year, declare the one that fits, and check again before filing. A mid-year change in rent, the sanction of a home loan, or a large arrears payment can move the answer by more than the margin between the two.

Opting in, switching and Form 10-IEA

A salaried employee or pensioner without business income chooses the regime afresh in every year’s return, with no form and no limit on switching. The new regime is the default, so it is the old regime that has to be selected, and the selection is made in the return itself on or before the due date under Section 139(1), which for such a filer is 31 July of the assessment year. That is not the general non-audit date. Section 5 of the Finance Act 2026 substituted Explanation 2 to Section 139(1) with effect from 1 March 2026 and gave an assessee with business or professional income whose accounts need no audit a separate date of 31 August, so “not subject to audit” no longer means 31 July for everyone. The how to switch tax regime guide sets out the four dates and the belated-return consequence.

Form 10-IEA is required only where the taxpayer has income from business or profession. That taxpayer files the form electronically before the return to opt out of the new regime, and may withdraw the option and return to the new regime only once in a lifetime; after that the choice is locked for as long as the business income continues. A government employee with consultancy or professional receipts on the side falls into this category and loses the annual freedom to switch, which is a reason to compute carefully before opting out the first time.

Filing Form 10-IEA as a salaried taxpayer who does not need it is a common and harmless error, but a taxpayer with business income who fails to file it by the due date loses the old regime for that year entirely. Form 10-IEA replaced Form 10-IE from assessment year 2024-25, when the new regime became the default and the direction of the choice reversed. The how to switch tax regime guide covers the process on the e-filing portal.

Common errors

• Applying the Rs. 75,000 standard deduction under the old regime, where it is Rs. 50,000.
• Counting the employer’s Section 80CCD(2) contribution as an old-regime deduction. It is available in both regimes and cancels out of the comparison entirely.
• Assuming Section 80CCD(1B), the extra Rs. 50,000 of the employee’s own NPS, survives in the new regime. Only the employer’s Section 80CCD(2) does.
• Reading the Rs. 12 lakh figure as the first Rs. 12 lakh being exempt. It is a rebate: at a total income of Rs. 12,00,001 the rebate is lost and, subject to marginal relief, tax applies from Rs. 4 lakh upward.
• Assuming senior citizens get a higher basic exemption in the new regime. The Rs. 3 lakh and Rs. 5 lakh exemptions are old-regime only, and they are worth Rs. 2,500 and Rs. 12,500 of tax respectively.
• Filing Form 10-IEA as a salaried taxpayer or pensioner. Only a taxpayer with business or professional income needs it.
• Assuming the house rent allowance exemption is available in the new regime. It is old-regime only, under Schedule III to the Income-tax Act, 2025 read with Rule 279 of the Income-tax Rules, 2026.
• Confusing the Rs. 12 lakh rebate threshold, which is total income, with the Rs. 12.75 lakh tax-free ceiling, which is gross salary before the standard deduction.
• Assuming the standard deduction applies to a family pension. It does not; Section 57(iia) gives Rs. 25,000 or one-third under the new regime and Rs. 15,000 or one-third under the old.
• Treating the regime declared to the Drawing and Disbursing Officer as final. It governs only the tax deducted at source; the return settles the regime.
• Citing Section 115BAC or Section 87A for the financial year 2026-27 without naming Section 202 and Section 156. The reliefs continue; only the numbering moved.

Related Articles

• Tax regime break-even: when the old regime wins
• Income tax slabs for AY 2027-28
• Section 115BAC
• Section 202 of the Income-tax Act 2025
• New tax regime
• Old tax regime
• Deductions allowed in the new tax regime
• Section 87A rebate
• Marginal relief
• Surcharge on income tax
• How to switch tax regime
• Form 10-IEA
• Income-tax Act 2025
• The tax year replaces the previous year and assessment year
• HRA exemption under Section 10(13A)
• NPS tax benefits
• Section 80TTB
• Entertainment allowance
• Agniveer Corpus Fund
• TDS on salary (Section 192)
• Advance tax
• Form 12BB
• Leave Travel Concession
• Income tax for government employees
• Income tax for pensioners
• Standard deduction
• Professional tax
• Section 89 relief
• How to fill Form 10E
• House-rent allowance
• City classification for HRA
• Dearness allowance
• Transport allowance
• Pay fixation
• Take-home salary for central government employees
• National Pension System
• Unified Pension Scheme
• Old Pension Scheme
• NPS vs OPS vs UPS
• General Provident Fund
• Central government pension
• Pension calculation
• Commutation of pension
• Family pension
• Gratuity for central government employees
• Leave encashment
• Pay matrix
• 7th Central Pay Commission
• Central Board of Direct Taxes
• Central government employees in India
• Income tax calculator
• HRA exemption calculator
• 7th CPC salary calculator

External references

• Income Tax Department, e-filing portal
• Central Board of Direct Taxes
• India Code, bare Acts
• The Gazette of India
• Department of Expenditure
• Press Information Bureau

References

1. Income-tax Act, 2025 (Act No. 30 of 2025), assented 21 August 2025 and in force from 1 April 2026; Section 202 (the default new regime and its slabs), renumbering Section 115BAC(1A) of the Income-tax Act, 1961.
2. Income-tax Act, 2025, Section 156, renumbering Section 87A: new-regime rebate up to Rs. 60,000 on a total income up to Rs. 12,00,000 with marginal relief, and old-regime rebate up to Rs. 12,500 on a total income up to Rs. 5,00,000.
3. Income-tax Act, 2025, Section 19(1) Table: serial 2, the standard deduction of Rs. 75,000 or the salary whichever is less in the new regime and Rs. 50,000 or the salary whichever is less in the old, renumbering Section 16(ia) of the 1961 Act; and serial 1, professional tax under article 276(2) of the Constitution, renumbering Section 16(iii) and excluded from the new regime by Section 202(2)(a)(iv). The Act enacts no counterpart to the Section 16(ii) entertainment allowance deduction.
4. Finance Act 2026, continuing the slab tables, rebate, standard deduction, surcharge and cess of both regimes unchanged from the financial year 2025-26.
5. Income-tax Act, 1961, Sections 80C, 80CCD(1B), 80CCD(2), 80CCH(1) and 80CCH(2), of which Section 115BAC(2)(i) preserves only 80CCH(2) in the new regime, 80D, 24(b), 10(5), 10(13A), 80TTA and 80TTB, renumbered in the Income-tax Act, 2025 as Sections 123 (with Schedule XV), 124, 126, 22 (home-loan interest at Section 22(1)(b)) and 153, and Schedule III.
6. Central Board of Direct Taxes, Notification No. 22/2026 [F. No. 370142/41/2025-TPL], G.S.R. 198(E), dated 20 March 2026, notifying the Income-tax Rules, 2026 with effect from 1 April 2026; Rule 279 prescribes the house rent allowance limits at serial number 11 of the table in Schedule III to the Income-tax Act, 2025.
7. Income-tax Act, 1961, Section 57(iia): the family-pension deduction, Rs. 25,000 or one-third under the new regime and Rs. 15,000 or one-third under the old.
8. Finance Act 2025 surcharge schedule: 10% above Rs. 50 lakh, 15% above Rs. 1 crore, 25% above Rs. 2 crore, and 37% above Rs. 5 crore in the old regime only, the new regime being capped at 25%, with the 15% cap on dividend income and income under Sections 111A, 112, 112A and 115AD(1)(b).
9. Income-tax Act, 1961, Section 115BAC(6) and Rule 21AGA of the Income-tax Rules, 1962, on Form 10-IEA and the once-in-a-lifetime restriction for a taxpayer with business or professional income.
10. Income-tax Act, 2025, Section 157, renumbering Section 89: relief on arrears of salary and pension, claimed on Form 39 under the Income-tax Rules, 2026 from the tax year 2026-27, replacing Form 10E.