What is Section 115BAC in simple terms?

Section 115BAC is the Income-tax Act provision for India’s new tax regime. It gives lower slab rates but restricts many deductions and exemptions. It is the default regime for many taxpayers, so you must actively opt out if the old regime is better.

Is the new tax regime always better than the old regime?

No. The new regime can be better if you have few deductions, but the old regime may be better if you have strong HRA, 80C, 80D, home-loan or other valid claims. Compare final tax under both regimes before filing your return.

Do I need Form 10-IEA for 115BAC?

You generally need Form 10-IEA if you have business or professional income and want to opt out of the default new regime. Non-business taxpayers can usually choose in the ITR. File by the due date and verify the rule for your return form.

Can I claim HRA and 80C deductions under 115BAC?

HRA exemption is not available in the new regime, and many Chapter VI-A deductions such as 80C and 80D are restricted. Some specified deductions remain, including employer NPS contribution under 80CCD(2). Check the current Income Tax Department FAQ before claiming.

What should NRIs check before choosing 115BAC?

NRIs should confirm Indian taxable income, residential status, special-rate income, TDS, treaty relief, and filing requirement before choosing a regime. A resident salary example may not fit NRI rental income, capital gains, or professional income. Use official forms and consider tax advice.

115BAC — India New Tax Regime Guide (2026)

What Section 115BAC Means for Indian Taxpayers in 2026

Section 115BAC is the Income-tax Act provision behind India’s default new tax regime. For Assessment Year 2026–27, it matters to salaried employees, individual business owners, freelancers, HUFs, AOPs, BOIs, AJPs and NRIs with Indian taxable income. The practical point is simple: the new regime usually gives lower slab rates but removes or limits many familiar deductions and exemptions. The old regime may still work better for someone with strong deduction proof. The Income Tax Department explains that from AY 2024–25 the new regime is the default, but eligible taxpayers can opt out and use the old regime. Many taxpayers make their mistake early: they tell the employer nothing, assume the new regime is always cheaper, or discover at filing time that a deduction they expected is not available.

How Section 115BAC Works — Slabs, Deductions and Regime Choice

Under Section 115BAC for AY 2026–27, the official Income Tax Department guidance lists the new-regime slabs for individuals beginning with nil tax up to ₹4,00,000, then 5% above ₹4,00,000 up to ₹8,00,000, 10% above ₹8,00,000 up to ₹12,00,000, 15% above ₹12,00,000 up to ₹16,00,000, 20% above ₹16,00,000 up to ₹20,00,000, 25% above ₹20,00,000 up to ₹24,00,000, and 30% above ₹24,00,000. Health and education cess of 4% applies on income tax plus surcharge where applicable. Resident individuals may also qualify for the Section 87A rebate under the official conditions. The key trade-off is deductions. The Income Tax Department says the old regime allows various deductions and exemptions, while the new regime has lower rates with limited deductions. Its FAQ specifically states that HRA exemption is not available in the new regime and that Chapter VI-A deductions such as 80C, 80D, 80DD and 80G generally cannot be claimed, except specified deductions such as 80CCD(2), 80CCH and 80JJAA. Before filing, compare both regimes using actual documents: Form 16, AIS/TIS, rent proof, investment proof, home-loan statements, insurance receipts, and capital-gains reports. The important decisions are whether your deductions are large enough to justify the old regime, whether you have business income that requires Form 10-IEA to opt out, and whether your employer TDS choice matches your final ITR choice.

Key 115BAC Numbers for AY 2026–27

Key official figures to check for AY 2026–27 include: new-regime nil slab up to ₹4,00,000; 5% band from ₹4,00,001 to ₹8,00,000; 10% band from ₹8,00,001 to ₹12,00,000; 15% band from ₹12,00,001 to ₹16,00,000; 20% band from ₹16,00,001 to ₹20,00,000; 25% band from ₹20,00,001 to ₹24,00,000; and 30% above ₹24,00,000. The official salaried-individual page also lists a ₹60,000 Section 87A rebate limit under the new regime where taxable income does not exceed ₹12,00,000, and notes 4% health and education cess on tax plus surcharge. Verify every number against the current Income Tax Department page before filing.

Common Financial Mistakes Indian Taxpayers Make With 115BAC — and How to Avoid Them

1. Assuming 115BAC is always cheaper: compare final tax under both regimes after deductions, rebate, cess and surcharge. 2. Claiming old-regime deductions in the new regime: HRA and most Chapter VI-A deductions are restricted, so use only allowed deductions. 3. Missing Form 10-IEA when you have business or professional income: file the form by the due date if you need to opt out. 4. Treating employer intimation as final: the employer choice affects TDS, but the ITR still determines the final computation. 5. Forgetting NRI complexity: NRIs should check Indian taxable income, special-rate income, treaty position and filing rules separately.

Your 115BAC Action Plan — What to Do Before Filing

Do not choose a regime from memory or from a colleague’s result. Work through the comparison with documents, then file on time. This plan is designed for salaried taxpayers, NRIs with Indian taxable income, freelancers and small business owners who need a practical sequence before choosing between the default new regime and the old regime.

Day 1: Download income records: Collect Form 16, AIS/TIS, Form 26AS, salary slips, bank interest certificates, capital-gains reports, and any Indian rental-income records.
Week 1: List verifiable deductions: Separate deductions that are allowed only in the old regime from deductions permitted in the new regime, using actual proof rather than estimates.
Before employer declaration: Compare TDS impact: Tell your employer your intended regime for TDS after comparing both regimes, but remember the ITR filing choice is the final computation.
Before return due date: Check Form 10-IEA need: If you have business or professional income and want the old regime, confirm whether Form 10-IEA must be filed by the due date.
Annual review: Recalculate every year: Re-run the old-versus-new comparison each assessment year, especially after job changes, home loans, rent changes, NRI status changes, or new investments.

Official Resources and Where to Get Help in India

Use the Income Tax Department e-filing portal for official FAQs, return utilities, tax calculators, AIS/TIS, Form 26AS and filing status. Use the Income Tax India pages for the text of Section 115BAC and tax-rate computation notes. For complex cases, speak to a chartered accountant or qualified tax practitioner, especially if you have NRI income, capital gains, business income, multiple employers, or treaty questions. Related MoneyWiki guides: India income tax slabs, NRI tax filing guide, and old vs new tax regime comparison.