How salaried Indians should plan tax for FY 2026-27 — regime selection, salary restructuring, 80C/80D stacking and AIS reconciliation before filing.
If you are a salaried professional in India, tax planning for FY 2026-27 starts the day you receive your CTC offer — not in March. The new tax regime is the default, the old regime survives for those with sizeable deductions, and your employer's TDS deduction is now tied to the regime you declare in April. Make the choice early, document it, and structure your salary to extract the maximum legitimate benefit.
Step 1 — Pick Your Regime in April
Employers ask for your regime declaration at the start of the financial year for TDS computation. Under the new regime you get a ₹75,000 standard deduction, 87A rebate up to ₹7 lakh taxable income and lower slab rates with no investment-linked deductions. Under the old regime you can claim HRA, LTA, 80C, 80D, home loan interest and several others. Run both computations using your projected CTC and pick the one with the lower outflow.
Step 2 — Restructure Your Salary
Many salaried taxpayers leave money on the table by accepting the default salary breakup. Negotiate with HR to introduce:
- HRA component aligned to actual rent paid (claimed only in the old regime).
- Reimbursements for fuel, telephone, books and meal coupons where the policy allows.
- Employer NPS contribution under section 80CCD(2) — deductible up to 10 percent of basic salary in both regimes.
- Leave Travel Allowance — eligible in two of every block of four calendar years.
Step 3 — Use the Old Regime Deductions if You Chose It
Section 80C accommodates up to ₹1.5 lakh — PPF, ELSS, EPF, life insurance premium, principal on home loan, children's tuition. Section 80D allows ₹25,000 for self-and-family health insurance (₹50,000 for senior-citizen parents). Section 24(b) gives up to ₹2 lakh on self-occupied home loan interest. Section 80CCD(1B) adds an extra ₹50,000 for self-contribution to NPS. Stack these intelligently.
Step 4 — Don't Ignore the New Regime Levers
Even in the new regime, salaried taxpayers can claim the ₹75,000 standard deduction, employer NPS contribution under 80CCD(2), gratuity exemption up to ₹20 lakh on retirement, and leave encashment exemption up to ₹25 lakh for non-government employees. The 87A rebate makes income up to ₹7 lakh effectively tax-free.
Step 5 — Reconcile AIS and Form 26AS Before Filing
The Annual Information Statement now captures interest from savings accounts, fixed deposits, mutual fund redemptions, dividends, securities transactions, foreign remittances and credit card spends. Mismatches with your ITR are the leading cause of post-filing notices. Download the AIS in June, reconcile with Form 26AS, file feedback against incorrect entries and then prepare the return.
Capital Gains and Other Income Heads
Salaried Indians often have income beyond salary — interest on FDs, dividends, capital gains on equity and mutual funds, rental income. Treat each head with its own tax-planning lens. For listed equity and equity mutual funds held over 12 months, LTCG up to ₹1.25 lakh per year is exempt and the excess is taxed at 12.5 percent — harvest gains within this threshold annually if your holding allows. Park surplus funds in debt mutual funds, short-term FDs or RBI floating-rate savings bonds based on your slab and horizon. The salary head is the easy one; the other heads need active management.
Year-End Tax Saving Action Plan
- In December, project full-year salary and income from other sources.
- Decide whether to top up 80C, 80D, NPS or claim home-loan interest.
- Submit final investment proofs through Form 12BB by mid-January.
- Review TDS deducted vs total tax payable and pay any shortfall as self-assessment tax.
- File the ITR by 15 July to lock the refund cycle early.
NPS and Long-Horizon Planning
The National Pension System deserves a dedicated section in any salaried tax plan. Beyond the section 80CCD(1B) additional deduction of ₹50,000 in the old regime, NPS offers tax-deferred compounding, low expense ratios and a disciplined retirement corpus. At 60, you can withdraw 60 percent tax-free as lump sum and use 40 percent to buy an annuity. Salaried employees should opt in to employer-sponsored NPS for the section 80CCD(2) deduction, additionally maximise their 1B contribution in the old regime, and choose an aggressive asset allocation (auto-choice LC75 or active LC75) in their working years for higher long-term outcomes.
Conclusion
Salaried tax planning in 2026 is structured, calendar-driven and digital — pick the regime early, restructure salary thoughtfully, stack deductions in the old regime if you chose it, and reconcile AIS before filing. The taxpayer who plans in April pays less than the taxpayer who scrambles in March.
