What is the Current Tax Year in India?
Instant answer for FY 2026-27 · Budget 2026 Updates · Free Tax Calculators
The current tax year in India is FY 2026-27 (Financial Year 2026-27), which runs from 1 April 2026 to 31 March 2027. This is the period during which income is earned. The new Income Tax Act 2025 came into effect from 1st April 2026, introducing the concept of "Tax Year" which replaces the previous "Financial Year" and "Assessment Year" terminology to simplify tax compliance.
📊 Income Tax Slabs for FY 2026-27 (Tax Year 2026-27)
Budget 2026 retained the income tax slab rates from FY 2025-26 without any changes. Taxpayers can choose between the new tax regime (default) and the old tax regime. The new regime offers lower tax rates with limited deductions, while the old regime provides higher basic exemption with access to deductions like 80C, 80D, HRA, and home loan interest.
New Tax Regime (Default)
| Income Slab | Tax Rate |
|---|---|
| ₹0 – ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
✓ Standard deduction: ₹75,000
✓ Section 87A rebate: Up to ₹60,000 (for income ≤ ₹12L)
✓ Effective zero tax up to ₹12 lakh income
✓ Employer NPS: Up to 14% of basic salary (Section 80CCD(2))
Old Tax Regime (Optional)
| Income Slab | Tax Rate |
|---|---|
| ₹0 – ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
✓ Section 80C: Up to ₹1.5L (EPF, PPF, ELSS, LIC, etc.)
✓ Section 80D: Health insurance premium deduction
✓ HRA exemption for salaried employees
✓ Home loan interest: Up to ₹2L (Section 24b)
✓ Section 87A rebate: Up to ₹12,500 (for income ≤ ₹5L)
Note: Surcharge applies at 10% (income >₹50L), 15% (>₹1Cr), 25% (>₹2Cr) under new regime. Health and Education Cess of 4% applies to all taxpayers. The new tax regime is the default option, but taxpayers can opt for the old regime while filing ITR.
📑 Union Budget 2026 — Key Highlights for FY 2026-27
Budget 2026 focused on simplifying tax compliance through the new Income Tax Act 2025. Here are the major announcements:
📅 Important Tax Dates for FY 2026-27 (Tax Year 2026-27)
Note: Income earned in Tax Year 2026-27 (1 April 2026 – 31 March 2027) will be filed in ITR from April 2027 onwards. ITR for previous year (FY 2025-26 / AY 2026-27) is currently due by 31 July 2026 and follows the Income Tax Act 1961 provisions.
📖 Understanding "Tax Year" — New Income Tax Act 2025
What is Tax Year?
The new Income Tax Act 2025 introduces the concept of "Tax Year" which replaces both "Financial Year (FY)" and "Assessment Year (AY)" to simplify tax terminology. A Tax Year is a 12-month period from 1st April to 31st March during which income is earned and for which taxes are filed in the following tax year.
Tax Year vs Financial Year vs Assessment Year
Under the old Income Tax Act 1961, there were two separate concepts:
- Financial Year (FY): The period during which income is earned (1 April to 31 March)
- Assessment Year (AY): The following year when ITR is filed for that income (1 April to 31 March)
The new Tax Year concept simplifies this by combining both into one unified term. For example:
- Old System: Income earned in FY 2025-26 is filed in AY 2026-27
- New System: Income earned in Tax Year 2026-27 is filed for Tax Year 2026-27
When Does Tax Year Start and End?
Tax Year 2026-27 starts on 1st April 2026 and ends on 31st March 2027. For newly established businesses, the tax year starts from the date of establishment and runs until 31st March. For example, if a business is set up on 1st June 2026, the first tax year would be from 1st June 2026 to 31st March 2027.
Does This Change Tax Filing Deadlines?
No. The introduction of Tax Year does not change any tax filing deadlines or compliance dates. The ITR filing deadline for Tax Year 2026-27 remains 31st July 2027 for non-audit cases and 31st October 2027 for audit cases. All advance tax payment dates, TDS/TCS deadlines, and other compliances remain unchanged.
Transition from Old Act to New Act
The Income Tax Act 2025 came into effect from 1st April 2026. However, there is no gap or overlap:
- Income earned during FY 2025-26 is governed by Income Tax Act 1961 and assessed in AY 2026-27
- Income earned from 1st April 2026 onwards is governed by Income Tax Act 2025 and assessed for Tax Year 2026-27
- The e-filing portal supports both Acts simultaneously during the transition period
- All pending assessments, appeals, and proceedings for earlier years continue under the old Act
🧮 Free Tax Calculators for FY 2026-27
Calculate your exact tax liability, in-hand salary, HRA exemption, and more with our free calculators updated for the current tax year:
❓ Frequently Asked Questions (FAQs)
1. What is the current tax year in India?
The current tax year in India is Financial Year 2026-27 (FY 2026-27) or Tax Year 2026-27 under the new Income Tax Act 2025, which runs from 1 April 2026 to 31 March 2027. This is the period during which income is earned and on which tax will be paid.
2. What is the present tax year in India?
The present tax year is FY 2026-27 (April 2026 – March 2027). Under the new Income Tax Act 2025, it is referred to as Tax Year 2026-27. ITR for this income will be filed from April 2027 onwards with deadline 31 July 2027.
3. What is the current financial year in India?
The current financial year in India is FY 2026-27. Indian financial years run from 1st April to 31st March, unlike the calendar year. The next financial year, FY 2027-28, will begin on 1 April 2027. From 1st April 2026, the new Income Tax Act 2025 uses the term "Tax Year" instead of "Financial Year".
4. What is the difference between tax year, financial year and assessment year?
Under the old Income Tax Act 1961: Tax Year = Financial Year (the year income is earned, 1 April – 31 March). Assessment Year is the next year when ITR is filed for that income. The new Income Tax Act 2025 uses just "Tax Year" to eliminate confusion. Tax Year 2026-27 refers to income earned from 1 April 2026 to 31 March 2027, which will be assessed in the same Tax Year 2026-27.
5. What is the current assessment year in India?
The current assessment year is AY 2026-27, used for filing ITR for income earned in FY 2025-26 (April 2025 – March 2026). The ITR filing deadline for FY 2025-26 is 31 July 2026. This follows the old Income Tax Act 1961. From FY 2026-27 onwards, the new Act uses "Tax Year" instead of "Assessment Year".
6. Which is the current FY in India 2026?
The current FY in India is FY 2026-27. It started on 1 April 2026 and continues until 31 March 2027. All income earned in this period falls under FY 2026-27 (or Tax Year 2026-27 under the new Act) for tax purposes.
7. What are the income tax slabs for the current tax year?
For FY 2026-27, the new tax regime has slabs from 0% (up to ₹4L) to 30% (above ₹24L). With ₹75,000 standard deduction and Section 87A rebate of ₹60,000, salary up to ₹12 lakh attracts zero tax. The old regime is also available with deductions like 80C, 80D, HRA, and home loan interest. Tax slabs remain unchanged from FY 2025-26 as per Budget 2026.
8. When does the tax year end in India?
The tax year in India ends on 31 March every year. The current tax year (FY 2026-27 / Tax Year 2026-27) ends on 31 March 2027, after which the new FY 2027-28 (Tax Year 2027-28) begins on 1 April 2027.
9. What is a tax year vs calendar year?
A calendar year runs from 1 January to 31 December (used for everyday purposes). A tax year (financial year) in India runs from 1 April to 31 March — used for income tax, salary, business accounting, and ITR filing. Most countries use the calendar year for taxes, but India follows the April-March cycle.
10. When can I file ITR for the current tax year?
ITR for the current tax year (FY 2026-27 / Tax Year 2026-27) can be filed from April 2027 onwards, with the standard deadline being 31 July 2027 for individuals not requiring audit. ITR for the previous year (FY 2025-26 / AY 2026-27) is currently being filed with deadline 31 July 2026.
11. What is the Income Tax Act 2025?
The Income Tax Act 2025 is the new income tax legislation that came into effect from 1st April 2026, replacing the Income Tax Act 1961. It simplifies the tax language, reduces sections from 819 to 536, and introduces the "Tax Year" concept to eliminate confusion between Financial Year and Assessment Year. The tax slabs, rates, deductions, and compliance deadlines remain unchanged.
12. Does the new Tax Year system change filing deadlines?
No, the introduction of "Tax Year" does not change any tax filing deadlines or compliance dates. The ITR filing deadline remains 31st July for non-audit cases and 31st October for audit cases. Advance tax payment dates, TDS/TCS deadlines, and all other compliances remain the same as before.
13. Can I still use the old tax regime in FY 2026-27?
Yes, taxpayers can choose between the new tax regime (default) and the old tax regime while filing ITR for FY 2026-27. The old regime allows deductions under Section 80C, 80D, HRA, home loan interest under Section 24(b), and other exemptions. Salaried individuals can switch between regimes every year, but businesses can switch only once.
14. What is Section 87A rebate for FY 2026-27?
Section 87A provides a tax rebate for resident individuals. Under the new tax regime, rebate is up to ₹60,000 for income up to ₹12 lakh (making effective tax zero). Under the old tax regime, rebate is up to ₹12,500 for income up to ₹5 lakh. This rebate is deducted from the calculated tax liability.
15. What is the standard deduction for FY 2026-27?
The standard deduction for salaried individuals and pensioners is ₹75,000 under the new tax regime for FY 2026-27. This deduction is available from gross salary/pension income and reduces the taxable income. No standard deduction is available under the old tax regime (introduced only in new regime from FY 2023-24).
16. How do I choose between new and old tax regime?
Compare your total tax liability under both regimes using an income tax calculator. If you have significant deductions under Section 80C (EPF, PPF, ELSS, LIC), HRA exemption, home loan interest, or health insurance premium (Section 80D), the old regime may be beneficial. If you have minimal deductions, the new regime with lower slab rates and higher basic exemption is usually better.
17. What is advance tax for FY 2026-27?
If your tax liability exceeds ₹10,000 in FY 2026-27, you must pay advance tax in four quarterly installments: 15% by 15 June 2026, 45% by 15 September 2026, 75% by 15 December 2026, and 100% by 15 March 2027. Failure to pay advance tax attracts interest under Section 234C at 1% per month.
18. Can losses from FY 2025-26 be carried forward to Tax Year 2026-27?
Yes, losses determined for AY 2026-27 under the Income Tax Act 1961 can be carried forward and set off in Tax Year 2026-27 and subsequent tax years under the new Income Tax Act 2025, subject to prescribed conditions. The ITR of loss must be filed within the due date for carry-forward eligibility.
19. What is the revised ITR filing deadline announced in Budget 2026?
Budget 2026 extended the deadline for filing revised income tax return from 31st December to 31st March. However, a fee will be charged for filing revised returns. The original ITR filing deadline of 31st July for non-audit cases and 31st October for audit cases remains unchanged.
20. Do NRIs need to pay tax in India for FY 2026-27?
Non-Resident Indians (NRIs) are taxed only on income earned or received in India. This includes salary earned in India, rental income from Indian property, capital gains from sale of Indian assets, interest from Indian bank accounts/FDs, and dividends from Indian companies. Global income is not taxable for NRIs. NRIs can opt for new or old tax regime based on their deductions.
👉 CurrentTaxYear.com provides free tax calculators and information based on Income Tax Act 2025 provisions for the current tax year (FY 2026-27 / Tax Year 2026-27). All content is for informational purposes; consult a Chartered Accountant for professional tax advice.