Chartered Accountant · ICAI M.No. 153926 · FRN 136869W · Reviewed on 7 October 2026
What survives in the new regime
Under section 115BAC of the Income-tax Act, 1961, for FY 2025-26 you keep:
- Standard deduction ₹75,000 — salary or pension income;
- Employer’s NPS contribution — section 80CCD(2), up to 14% of basic + DA for both government and private employees;
- Family pension — one-third of the pension or ₹25,000, whichever is lower;
- Agniveer Corpus Fund — section 80CCH, full contribution;
- Rental income — the 30% standard deduction under section 24(a), plus interest on a loan for a let-out property under 24(b) (effectively capped at the rent — the excess loss cannot be set off against salary or other heads);
- Employer’s EPF contribution, gratuity and leave-encashment exemptions, and official-duty conveyance allowances — these never depended on the regime.
What you give up
No 80C (LIC, PPF, ELSS, school fees), no 80D health-insurance deduction, no HRA or LTA exemption, no self-occupied home-loan interest, no 80G donations, no 80TTA/80TTB interest deductions, and no professional-tax deduction. If these together are large — a home loan plus HRA is the classic pair — the old regime can still win; it must now be opted for consciously.
Why so many FY 2025-26 taxpayers pay nothing anyway
The section 87A rebate of up to ₹60,000 makes tax nil up to ₹12 lakh of income in the new regime (salaried: ₹12.75 lakh after the standard deduction), with marginal relief just above the line. Run your own figures in our income-tax calculator — it computes the new regime with the rebate and marginal relief. From Tax Year 2026-27 the same design continues under section 202 of the Income-tax Act, 2025. Before filing, we compare both regimes on your actual deductions rather than assuming.