This article is general education, not personalised tax advice. Tax rules, slabs, deductions, rebates and filing requirements can change. Check the Income Tax Department for the relevant assessment year and use a chartered accountant or other appropriately qualified professional when your circumstances are more complex.
How income tax works
Income tax is calculated on taxable income for a financial year. India uses slab rates, meaning different portions of income can be taxed at different rates rather than one rate automatically applying to every rupee earned.
New regime vs old regime
For AY 2026–27, the Income Tax Department states that the new tax regime under Section 115BAC is the default regime for individuals and certain other taxpayers. Eligible taxpayers can opt for the old regime; in non-business cases, that choice can generally be made through the income-tax return for the year, subject to the applicable filing rules.
The old regime allows a broader set of deductions and exemptions. The default new regime uses different slab rates and fewer deductions. Which regime produces a lower tax bill depends on the taxpayer’s actual income and eligible deductions—not on a universal rule of thumb.
What is TDS?
Tax Deducted at Source means a payer—such as an employer or bank—may deduct tax before paying certain income and deposit that amount against your PAN. TDS is a credit toward tax liability; it does not automatically mean you have overpaid or that a refund is due.
Documents worth understanding
- Form 16: commonly issued by an employer when applicable, summarising salary and tax deducted.
- Form 26AS: a tax-credit statement showing specified tax deductions and payments linked to PAN.
- AIS: the Annual Information Statement, which can contain a wider set of reported financial information.
These records should be checked against your own documents. A mismatch is something to investigate, not something to guess around.
Filing your first return
- Confirm which return form applies to your income sources and circumstances.
- Review salary, interest and other income information rather than relying on salary alone.
- Check TDS and other tax credits reflected against your PAN.
- Compare eligible tax regimes if you are allowed to choose.
- File by the deadline that applies to you and retain relevant records.
AY 2026–27 reference point
For AY 2026–27, the Income Tax Department lists the new-regime slabs beginning with nil tax up to ₹4 lakh of income, followed by progressively higher slab rates, while the old-regime slabs remain different. Do not reuse these figures for a later year without rechecking the official portal.
Source
Income Tax Department — Salaried Individuals for AY 2026–27.
The useful habit is not “finding a hack.” It is knowing which year’s rules you are using, where your numbers came from and when the decision needs professional review.