Question 1

Which tax regime is better for a ₹12 lakh salary in AY 2026-27?

Accepted Answer

For a ₹12 lakh salary in AY 2026-27, the New Regime is usually better because Section 87A gives a rebate of up to ₹60,000, making income up to ₹12 lakh effectively tax-free. Under the Old Regime, you would need total deductions (80C + HRA + 80D + Standard Deduction) exceeding roughly ₹3.75 lakh to match the New Regime's tax savings. If your deductions are lower than that threshold, stick with the New Regime.

Question 2

What is the Section 87A rebate for AY 2026-27?

Accepted Answer

Under the New Regime for AY 2026-27 (Finance Act 2025), Section 87A provides a rebate of up to ₹60,000, making total income up to ₹12 lakh completely tax-free after the ₹75,000 standard deduction. Under the Old Regime, the rebate remains ₹12,500 for total income up to ₹5 lakh. Note that the 87A rebate does not apply to special-rate incomes like LTCG on equity (Section 112A) or STCG on equity (Section 111A).

Question 3

What are the income tax slabs under the New Regime for AY 2026-27?

Accepted Answer

New Regime tax slabs for AY 2026-27 as per Finance Act 2025: Income up to ₹4 lakh — Nil; ₹4 lakh to ₹8 lakh — 5%; ₹8 lakh to ₹12 lakh — 10%; ₹12 lakh to ₹16 lakh — 15%; ₹16 lakh to ₹20 lakh — 20%; ₹20 lakh to ₹24 lakh — 25%; Above ₹24 lakh — 30%. A 4% Health and Education Cess is applied on the computed tax. The standard deduction of ₹75,000 is available for salaried individuals and pensioners.

Question 4

Can I claim HRA exemption in the New Regime?

Accepted Answer

No. HRA exemption under Section 10(13A) is not available in the New Tax Regime. If you pay significant rent — typically more than ₹1.5 lakh to ₹2 lakh per year — the Old Regime may be more beneficial once you also account for 80C, 80D, and other deductions. You can use Tillu Taxwala to compare both regimes with your exact HRA and deduction figures instantly.

Question 5

What deductions are allowed under the New Regime?

Accepted Answer

Under the New Regime (Section 115BAC), the deductions allowed are: Standard Deduction of ₹75,000 for salaried employees and pensioners (from FY 2025-26); Employer's NPS contribution under Section 80CCD(2) — up to 10% of Basic+DA for private sector, 14% for government employees; Deduction under Section 80JJAA for additional employee cost. Chapter VI-A deductions like 80C (₹1.5L), 80D (health insurance), 80E (education loan), 80G (donations), HRA, LTA are NOT available in the New Regime.

Question 6

Who can use presumptive taxation under Section 44AD and 44ADA?

Accepted Answer

Section 44AD is for businesses (not professionals) with turnover up to ₹3 crore (or ₹3.75 crore if 95% or more receipts and payments are digital). Presumptive profit is 8% of turnover (6% for digital receipts). Section 44ADA is for specified professionals — doctors, lawyers, chartered accountants, engineers, architects, interior designers, and technical consultants — with gross receipts up to ₹75 lakh. Presumptive profit is 50% of gross receipts. Both sections exempt you from maintaining detailed books of accounts.

Question 7

How is advance tax calculated and when is it due?

Accepted Answer

Advance tax is required if your total tax liability for the year exceeds ₹10,000. The quarterly payment schedule for AY 2026-27 is: 15% of estimated annual tax by 15 June 2025; 45% by 15 September 2025; 75% by 15 December 2025; 100% by 15 March 2026. Missing or underpaying instalments attracts interest: Section 234B (3% per annum for non-payment of advance tax after year end) and Section 234C (1% per month for each instalment shortfall). Senior citizens with no business income are exempt from advance tax.

Question 8

What is the standard deduction for salaried employees in AY 2026-27?

Accepted Answer

The standard deduction for salaried employees and pensioners in AY 2026-27 (FY 2025-26) is ₹75,000, increased from ₹50,000 as per Finance Act 2024. This deduction is available under BOTH the Old Regime and the New Regime. For family pensioners, the standard deduction is ₹25,000 (increased from ₹15,000).

Question 9

Is Tillu Taxwala free to use?

Accepted Answer

Yes, Tillu Taxwala is free to use for all income tax calculators — Old vs New regime comparison, HRA exemption calculator, Section 87A rebate, capital gains, GST tools, NPS, EPF, PPF, SIP, crypto tax, and more. Advanced features like AI SmartFill (Form 16 to ITR JSON), AI tax advisor, and ITR JSON export use a credits system. New users get 50 free credits on signup. You can also download the free TaxWise app on Google Play.

Question 10

How do I download the Tillu Taxwala app?

Accepted Answer

The TaxWise app by Tillu Taxwala is available free on Google Play Store. Search for 'TaxWise Income Tax Calculator' or visit https://play.google.com/store/apps/details?id=com.taxwise.mobile to download. The app supports ITR filing, AI autofill from Form 16, Old vs New regime comparison, and business accounting — all updated for AY 2026-27.