Tax year 2026-27 ends on 31 March 2027. Any tax-saving move for this year must be completed by that date. You cannot claim tax year 2026-27 deductions on money you pay in April 2027.
This is the first year under the Income-tax Act, 2025, which replaced the 1961 Act from 1 April 2026. The Act uses "tax year" in place of "financial year" and "assessment year", and the sections are renumbered. Below, each move gives the new section with the old number in brackets. The limits themselves have not changed.
One thing first: most deductions only help in the old regime. If you are in the new regime, which is the default, only Moves 9, 10 and 11 and parts of Move 12 apply to you. So start with Move 1.
The 12-Move Checklist
Move 1: Decide your regime before you invest a rupee
Applies to: everyone.
Buying ELSS or insurance just to save tax makes no sense if the new regime is cheaper for you anyway. For a resident, salary up to ₹12.75 lakh is tax-free in the new regime. Above that, the old regime wins only if your total deductions are large. You need about ₹5.94 lakh of deductions at ₹15 lakh salary, ₹7.58 lakh at ₹20 lakh and ₹8.5 lakh at ₹25 lakh, counting the ₹50,000 standard deduction and HRA. See New vs Old Tax Regime, Tax Year 2026-27 for the full break-even table, then check your own numbers with the old vs new regime tax calculator.
- No business income: you pick the cheaper regime when you file your return, even if you told your employer something else. The employer declaration only sets TDS. No form is needed.
- Business or professional income: the rules are stricter. You can opt out of the new regime once and withdraw that choice only once (section 202(4)). Think before switching.
Move 2: Fill Section 123 (formerly 80C): ₹1.5 lakh
Applies to: old regime only.
The biggest deduction. The ₹1.5 lakh limit covers the total of everything that qualifies, including:
- EPF: your own contribution only. EPF interest was 8.25% for FY 2025-26.
- PPF: 7.1% tax-free for October–December 2026. The rate is reset every quarter.
- ELSS mutual funds: 3-year lock-in.
- NSC and 5-year tax-saving bank FDs
- Life insurance premiums
- Home-loan principal repayment
- Children's tuition fees
Check what EPF, tuition fees and home-loan principal already cover before you invest more. Many salaried people are already close to ₹1.5 lakh without any extra investment. Section 123 counts only sums "paid or deposited in the tax year", so the money must go in by 31 March 2027.
Tax saved at the 30% slab: ₹1.5 lakh × 31.2% (30% plus 4% cess) = up to ₹46,800. To compare options, see ELSS lump sum vs SIP for the January–March rush and the ELSS vs PPF vs NPS calculator.
Move 3: Extra ₹50,000 in NPS: Section 124(3) (formerly 80CCD(1B))
Applies to: old regime only.
On top of the ₹1.5 lakh, your own contribution to NPS Tier I can get a further deduction of up to ₹50,000. The money is locked in until retirement and part of it must buy an annuity, so weigh that against the tax saved.
Separately, your employer's NPS contribution is deductible in both regimes under section 124(1) (formerly 80CCD(2)). The limit is 14% of salary in the new regime and 10% in the old regime for private employers. This has to be set up through your salary structure, so ask HR for next year rather than waiting for March.
Tax saved at the 30% slab: ₹50,000 × 31.2% = ₹15,600.
Move 4: Health insurance: Section 126 (formerly 80D)
Applies to: old regime only.
- Self, spouse and children: up to ₹25,000 (₹50,000 if you are a senior citizen).
- Parents: a further ₹25,000 (₹50,000 if either parent is a senior citizen).
- Preventive health check-ups: up to ₹5,000, within the limits above. This is the only part you can pay in cash.
The maximum is ₹75,000 if you are under 60 and your parents are seniors, and ₹1 lakh if you and your parents are all seniors. Tax saved at the 30% slab: ₹75,000 × 31.2% = ₹23,400. Work out the cover itself with the health insurance calculator.
Move 5: Home-loan interest: Section 22 (formerly 24(b))
Applies to: old regime, for a house you live in.
Interest on a loan for a self-occupied house is deductible up to ₹2 lakh a year. If you pay ₹3 lakh of interest, only ₹2 lakh counts. Principal repayment goes under Move 2 instead. There is nothing to do in March except collect the lender's interest certificate. Tax saved at the 30% slab: ₹2 lakh × 31.2% = ₹62,400.
Move 6: Education-loan interest: Section 129 (formerly 80E)
Applies to: old regime only.
There is no upper limit. Interest on a loan for higher education for yourself, your spouse or your children is fully deductible. The deduction runs for the year you start paying interest and the next seven years. Example: ₹80,000 of interest × 31.2% = ₹24,960.
Move 7: HRA paperwork
Applies to: old regime only.
Your exempt HRA is the lowest of these three:
- the HRA you actually received;
- 50% of salary in Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune or Ahmedabad (eight cities from 1 April 2026), or 40% elsewhere;
- rent paid minus 10% of salary.
Here "salary" means basic pay, plus DA if your terms of employment include it. Employers ask for rent receipts in January or February. If you miss that, you can still claim the exemption in your return, but TDS will be higher until then. Use the HRA calculator. Renting from a parent can qualify if the arrangement is genuine.
Move 8: Donations: Section 133 (formerly 80G)
Applies to: old regime only.
Some funds, such as PM CARES and the Swachh Bharat Kosh, qualify for 100% deduction with no limit. Most registered charities qualify for 50%, capped at 10% of your adjusted gross total income. Keep the receipt with the charity's registration details. Example: a ₹1 lakh donation at 50% gives a ₹50,000 deduction, worth ₹15,600 at the 30% slab.
Move 9: Harvest long-term gains up to ₹1.25 lakh
Applies to: both regimes.
Each tax year, the first ₹1.25 lakh of long-term gains on listed shares and equity mutual funds is tax-free. Above that, the rate is 12.5% (section 198, formerly 112A). Long-term here means held for more than 12 months.
If you have unrealised long-term gains, you can sell enough units to book up to ₹1.25 lakh of gain and buy back. Your cost price resets higher, so less of your gain is taxed when you finally sell. The saving is in the future: up to ₹1.25 lakh × 12.5% = ₹15,625 of tax avoided later, plus cess. Watch exit loads and the cost of buying back. Our guide on selling a mutual fund for tax reasons walks through the trade-offs.
Move 10: Book capital losses against gains
Applies to: both regimes.
If you have already booked gains this year and hold investments at a loss, selling the losers reduces your taxable gain:
- A short-term loss can be set off against short-term or long-term gains.
- A long-term loss can be set off only against long-term gains.
- Unused losses carry forward for 8 tax years, but only if you file your return by the due date (section 121).
Example: you have ₹3 lakh of long-term gains. After the ₹1.25 lakh exemption, ₹1.75 lakh is taxable. Booking a ₹2 lakh long-term loss brings that to zero.
Move 11: Top up advance tax by 15 March 2027
Applies to: both regimes.
You must pay advance tax if your tax for the year, after TDS, is ₹10,000 or more. This catches freelancers, traders, and salaried people with capital gains, rent or interest income. Resident senior citizens with no business income are exempt. The dates for tax year 2026-27 (section 408):
| Due date | Cumulative amount |
|---|---|
| 15 June 2026 | 15% |
| 15 September 2026 | 45% |
| 15 December 2026 | 75% |
| 15 March 2027 | 100% |
If you use presumptive taxation under section 58(2), you can pay the whole amount by 15 March. If you underpay, interest is charged at 1% a month under sections 424 and 425 (formerly 234B and 234C). Recalculate your income in early March and pay any shortfall by 15 March 2027. For a step-by-step method, see our advance tax guide.
Move 12: Family-level planning, done correctly
- Don't gift money to your spouse for tax reasons. Income from assets you gift to your spouse is added back to your income (section 99). PPF interest is tax-free anyway, so there is no slab benefit.
- PPF for a minor child counts toward deductions, but deposits in your own and your minor child's PPF together are capped at ₹1.5 lakh.
- Parents who are senior citizens can invest their own money in the Senior Citizens' Savings Scheme, which pays 8.2% for October–December 2026. They can deduct up to ₹50,000 of deposit interest a year under section 153 (formerly 80TTB), in the old regime.
What Each Move Is Worth (Old Regime, 30% Slab)
| Move | Deduction | Tax saved (30% + 4% cess) |
|---|---|---|
| Section 123 (80C) | ₹1.5 lakh | ₹46,800 |
| NPS, section 124(3) | ₹50,000 | ₹15,600 |
| Health insurance, section 126 | ₹75,000 | ₹23,400 |
| Home-loan interest, section 22 | ₹2 lakh | ₹62,400 |
| Donation at 50%, section 133 | ₹50,000 (on ₹1 lakh given) | ₹15,600 |
| Total of the five | ₹5.25 lakh | ₹1,63,800 |
| Education-loan interest (example) | ₹80,000 | ₹24,960 |
| LTCG harvesting (future saving) | ₹1.25 lakh of gain | up to ₹15,625 plus cess, later |
These are savings inside the old regime, not savings against the new regime. ₹5.25 lakh of deductions plus the ₹50,000 standard deduction is ₹5.75 lakh. That is below the break-even at ₹20 lakh salary (about ₹7.58 lakh) unless HRA closes the gap. That is why Move 1 comes first. Put your own numbers into the income tax calculator before you invest.
The March Timing Rules That Trip People Up
- PPF: the deposit must be made by 31 March 2027 to count for tax year 2026-27. Section 123 allows only sums paid in the tax year. The "by the 5th" rule only affects interest for that month.
- ELSS, tax-saving FDs and insurance premiums: the payment must go through by 31 March 2027. Don't rely on a payment made on the last evening.
- NPS: the contribution must reach your PRAN by 31 March 2027.
- Gain or loss booking: must happen within the tax year. Sell a few trading days before 31 March 2027, which is a Wednesday, so settlement is not in doubt.
- Advance tax: the last instalment is due 15 March 2027. Anything paid by 31 March still counts as advance tax for the year.
One Reminder About Last Year
Income earned in FY 2025-26 (April 2025 to March 2026) is still taxed and filed under the Income-tax Act, 1961, with the old section numbers. Nothing you do now changes that year. Everything above is for tax year 2026-27.
This checklist explains the rules for tax year 2026-27. It is general information, not personal tax or investment advice. Your result depends on your income, regime and family situation.