ITR filing 2026 deductions AY 2026-27
For ITR filing in 2026 (pertaining to Financial Year 2025–26), deductions vary significantly depending on whether you choose the New Tax Regime (default) or the Old Tax Regime.
1. New Tax Regime (Default)
The New Tax Regime offers lower slab rates but limits most popular deductions like 80C and 80D.
- Standard Deduction: Increased to ₹75,000 for salaried individuals and pensioners.
- Tax Rebate (Section 87A): Increased to ₹60,000, meaning taxable income up to ₹12 lakh effectively pays zero tax.
- For salaried people, the effective tax-free limit is ₹12.75 lakh after adding the standard deduction.
- Employer NPS Contribution (Section 80CCD(2)): Deduction of up to 14% of basic salary.
- Family Pension Deduction: Increased to ₹25,000.
- Let-out Property Interest: Interest on home loans for rented properties remains fully deductible.
2. Old Tax Regime (Optional)
This regime requires you to explicitly “opt-out” of the default system but allows for extensive tax-saving claims.
- Standard Deduction: Remains at ₹50,000.
- Section 80C: Up to ₹1.5 lakh for investments like PPF, ELSS, Life Insurance, and children’s tuition fees.
- Section 80D: Health insurance premiums up to ₹25,000 for self/family and ₹50,000 for senior citizen parents.
- HRA (House Rent Allowance): Fully or partially exempt based on actual rent paid and city.
- Home Loan Interest (Section 24b): Up to ₹2 lakh for self-occupied property.
- Education Loan (Section 80E): Full interest paid is deductible for up to 8 years.
- Interest Income (80TTA/80TTB): Up to ₹10,000 for individuals (80TTA) and up to ₹50,000 for senior citizens (80TTB).
3. Key Deadlines for 2026
- Individual Filing (ITR-1/ITR-2): July 31, 2026.
- Non-Audit Business/Trusts: Extended to August 31, 2026.
- Audit Cases: October 31, 2026.
Regime Comparison Summary
| Feature | New Regime (FY 2025–26) | Old Regime (FY 2025–26) |
|---|---|---|
| Default Status | Yes | No (Must opt-out) |
| Standard Deduction | ₹75,000 | ₹50,000 |
| Section 80C | Not Allowed | Up to ₹1.5 Lakh |
| Section 80D | Not Allowed | Allowed |
| HRA / LTA | Not Allowed | Allowed |
| Home Loan (Self) | Not Allowed | Up to ₹2 Lakh |
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