Most Indian tax advice is a photocopy of pre-2023 law. The default regime changed the game — most Chapter VI-A deductions left, the Income-tax Act 2025 renumbered the sections from 1 April 2026, and the only deduction that got bigger is the one tied to your employer. This page runs the standard claims against what the law actually says for FY 2026-27 (AY 2027-28), then lists what genuinely works. The slab numbers are below the article; the myths are the point.
FY27 in one table: the numbers, and the myths
Top: the new-regime slab structure for FY 2026-27 (unchanged from the Budget 2025 design; ₹12 lakh effectively tax-free after the ₹60,000 rebate; ₹75,000 standard deduction for salaried). Bottom: the standard claims against what the law says.
View the numbers as a table
| Claim | What the law says (FY27) | What to do |
|---|---|---|
| '80C saves tax' | Chapter VI-A gone on the new regime — except 80CCD(2) at 14%, 80CCH, 80JJAA | Invest for returns; negotiate employer NPS via payroll |
| 'Home-loan interest always saves' | 24(b) self-occupied not deductible on the new regime; ₹2L cap on old | Run rent-vs-buy as after-tax cashflow on your regime |
| 'HRA is free money' | 10(13A) is old-regime-only; spouse rent never eligible | Claim properly on old regime; ignore on new |
| 'Insurance is investment' | Premium deductions old-regime-only; 4-6% IRR products remain 4-6% | Term + health for protection; investments in investments |
| 'March 31 deadlines matter most' | The same deductions are available all year | Decide in April; harvest in February; skip the panic |
| Slabs (new regime, FY27) | Nil to ₹4L; 5% to ₹8L; 10% to ₹12L; 15% to ₹16L; 20% to ₹20L; 25% to ₹24L; 30% above | ₹12L effectively tax-free via the ₹60,000 87A rebate |
Verified 29 October 2026 against ITD guidance and corroborating summaries (sources below). The Income-tax Act 2025 renumbering is effective 1 April 2026 — section substance unchanged.
"80C saves tax" — mostly no longer true
The law says: on the default new regime, Chapter VI-A deductions are simply not available — no 80C, no 80D — except 80CCD(2) (employer NPS contributions, up to 14% of salary), 80CCH and 80JJAA. ELSS, PPF, children's tuition, life insurance premium: all real money, none of it deductible under the default regime. What to do: make investment decisions on investments, not on 80C; and if your employer offers an NPS route, the 14% employer contribution is the single most valuable deduction you have — negotiate it, don't confuse it with your own 80C instinct. The old regime keeps 80C's ₹1.5 lakh, but only makes sense where its higher slabs still net out ahead — run both on our tax hub every April.
"Home-loan interest always saves tax" — check your regime first
The law says: under the new regime, Section 24(b) interest on a self-occupied house is not deductible, and neither is 80C on principal. The interest deduction survives on the old regime (up to ₹2 lakh, self-occupied) — meaning the tax case for buying a home now depends on which regime you file, not on the purchase itself. What to do: if you file the default regime, run the rent-versus-buy decision as a plain after-tax cashflow comparison, the way our rent-versus-buy guide does; if you genuinely benefit from the old regime, the interest claim is real but capped, and HRA is the mirror-image trade you give up.
"HRA is free money" — it is old-regime money, with rules
The law says: HRA exemption (Section 10(13A)) is an old-regime-only deduction, computed as the least of actual HRA, rent minus 10% of salary, and 50% of salary (metro) or 40% (non-metro). Two traps: rent paid to a spouse is not eligible, and rent above ₹1 lakh a year needs the landlord's PAN. What to do: on the old regime, claim it properly with real receipts; on the new regime, stop budgeting for it. A salary structure loaded with HRA benefits an old-regime filer and is dead weight for a new-regime one.
"Insurance is investment" — the products disagree
The law says: premiums can be deductible only on the old regime (80C/80D), and maturity-tax treatment depends on the product and sum-insured rules — none of which converts a 4–6% IRR endowment into an investment. What to do: run the audit on our ₹3 lakh insurance page — term plus health for protection, investments in investments. A tax-advantaged bad investment is still a bad investment; "it saves tax" has been the most expensive sentence in Indian personal finance for thirty years.
What actually works under the new regime
- 80CCD(2), employer NPS, up to 14% of salary — the one big deduction that survives; ask your employer before March, because it must route through payroll.
- Capital-gains hygiene: equity LTCG is 12.5% above ₹1.25 lakh a year — harvest the exemption annually on a large equity portfolio; it is the cheapest legal alpha available. Debt funds bought after 1 April 2023 sit at slab rates; check the holding-period rules on our tax hub before choosing the vehicle.
- Family structuring, legally: gifts to specified relatives are tax-exempt under Section 56(2)(x), and income earned on them is the relative's own — but income on assets gifted to a spouse or minor child clubs back under Section 64, with only token exemptions. The legal version is gifting to adult children and parents in lower slabs; the illegal version is routing your own income through them.
- Freelancers: presumptive taxation (44ADA) keeps professional income simple — with the higher ₹75 lakh limit tied to a cash-receipts condition — and the discipline of reconciling 44ADA income with actual bank credits is the audit shield.
- The old-vs-new comparison, every year: the right regime changes with rent, home-loan interest and family deductions. Ten minutes on the tax hub each April beats a March scramble.
Why March 31 is the most expensive date in the tax calendar
Tax saving bought in March is purchased at maximum information asymmetry: no time to compare products, no time to check the seller's claims, and a calendar that converts decisions into purchases. The plan that works is boring: pick the regime in April, set the employer-NPS route in April, automate the SIPs in April, harvest the gains in February, and let March 31 pass as a non-event. The law rewards the April filer with the same deductions it reluctantly grants the March panic-buyer — minus the bad products.
Educational content, not financial advice. FY27 slab structure, the ₹60,000 rebate at ₹12 lakh, the ₹75,000 standard deduction, the surviving-deduction list and regime rules verified on 29 October 2026 against Income Tax Department guidance and corroborating summaries (sources below); the Income-tax Act 2025 renumbering is effective 1 April 2026. The 44ADA cash-receipt condition and product tax treatments are current-law summaries — confirm your own facts with a CA before filing.