FY 2026-27

Tax setup for a new job

FY 2026-27 is 1 April 2026 to 31 March 2027. Do these in the first month, in this order. The day labels are a working order. The Act does not set day 1, day 7, or day 15. Payroll sets the Form 12BB date. Salary tax overall is on the salaried guide.

Official sources

Employee benefits (page labelled AY 2026-27). Standard deduction is ₹75,000 under Section 115BAC and ₹50,000 in the other regime. HRA is Section 10(13A) and Rule 2A, the least of the three amounts.
Threshold limits (page labelled AY 2026-27, which is not FY 2026-27). Section 80C, with 80CCC and 80CCD(1), stops at ₹1,50,000. Section 80CCD(1B) is another ₹50,000, old regime only. Section 80CCD(2) is 14% of salary for a government employer and for income taxed under Section 115BAC(1A), and 10% for other employers. Section 80D is ₹25,000, or ₹50,000 if the person is a senior citizen, for self and family, and the same again for parents.
Section 115BAC, the new regime. It is the default. Chapter VI-A deductions are dropped, other than Section 80CCD(2), Section 80CCH(2), and Section 80JJAA.
How to link Aadhaar. An unlinked PAN is inoperative. Higher TDS is under Section 206AA. The PAN-Aadhaar page has the fee and who is exempt.
AIS and Form 26AS, where salary and TDS show up after the employer files the statement.
Income-tax Act, 2025 (CBDT hub). Section numbers on this page are the familiar 1961 Act ones.

Form 12BB

Form 12BB is the statement you give the employer so TDS under Section 192 can include the claims the law allows. Form 12BB is still that statement. This page does not treat a "Form 124" replacement as enacted.

Pay from an earlier employer in the same tax year is not a line on Form 12BB. That statement is Form 122 (earlier Form 12B and Form 12BAA), under section 392(4)(a). You furnish it at your option.

If you are in the new regime, most of the lines on the form do not reduce TDS. HRA, Section 80C, Section 80D, and your own extra NPS under Section 80CCD(1B) are old regime only. Employer NPS under Section 80CCD(2) still counts in both. The standard deduction is applied by payroll in both regimes: ₹75,000 in the new regime and ₹50,000 in the old regime.

What the form can carry, in the old regime:

✓ Rent paid, and the landlord's PAN if rent for the year is more than ₹1,00,000
✓ Home-loan interest (Section 24) and principal (Section 80C)
✓ Section 80C proofs, which share one ₹1,50,000 cap (employee EPF, PPF, ELSS, and the rest)
✓ Section 80D health-insurance premium
✓ Your own extra NPS under Section 80CCD(1B), up to ₹50,000

Employer NPS is not a receipt you attach. Ask HR to put it in the salary structure. The employer NPS page has the caps and a short email you can send.

When to send it: payroll sets the date, often in the first month. If the form is late, TDS for the months before it ignores those claims. You can still claim what the law allows when you file. Any refund comes after the return is processed, not on the next payslip.

Which regime, and is the PAN linked

Tell payroll which regime to use for TDS. The new regime under Section 115BAC is the default. A salaried person with no business income can choose again in the return. If payroll uses the other regime, monthly TDS will not match the return, and you settle the difference when you file.

Item	Old regime	New regime
Standard deduction	₹50,000	₹75,000
Section 80C	₹1,50,000	Not allowed
Section 80D	₹25,000 self and family, and the same again for parents. ₹50,000 for a bucket if that person is 60 or older. ₹1,00,000 only if both buckets are senior citizens.	Not allowed
HRA exemption	Least of the three amounts	Not allowed
Your NPS, 80CCD(1B)	₹50,000	Not allowed
Employer NPS, 80CCD(2)	10% of Basic + DA for a private employer. 14% for government.	14% of Basic + DA

There is no single deduction total that picks the regime for every salary. Use the regime comparator, then check the income bands on the salaried guide.

INOPERATIVE PAN

Check that PAN is linked to Aadhaar before the first payroll. If it is inoperative, Section 206AA applies: TDS is the highest of the rate in that section, the rate in force, or 20%. Where salary tax is already above 20%, it stays there. It does not fall to 20%. Refunds are also held while the PAN is inoperative. The PAN-Aadhaar page has the ₹1,000 fee under Section 234H and who does not have to link.

HRA and home-loan papers

These papers matter for TDS only in the old regime. In the new regime, HRA is taxed, and Section 24(b) interest on a self-occupied house is not allowed. Section 80C principal is not allowed either. Collect them if you may opt for the old regime, or if you will claim a let-out house, where interest is still allowed and the loss stays inside house property.

HRA, old regime

✓ Rent receipts, with the landlord's name
✓ The rent agreement, if payroll asks for it
✓ Landlord PAN if rent for the year is more than ₹1,00,000. If there is no PAN, a signed declaration
✓ Each person claims only the rent they paid

Home loan

✓ Interest certificate for this year from the lender. A sanction letter does not show this year's interest
✓ Principal paid, from the same certificate, for Section 80C
✓ Stamp duty and registration, in the year you paid them, also under Section 80C
✓ Self-occupied interest is capped at ₹2,00,000, and only in the old regime

The exemption is the least of the three amounts on the HRA page. Home-loan caps are on the Section 24(b) page. Send scans if you are not in the same city as payroll. Waiting for paper copies only delays the TDS change.

NPS and Section 80C

Employer NPS under Section 80CCD(2) is the deduction that still works when you stay in the new regime. Your own extra ₹50,000 under Section 80CCD(1B), and the ₹1,50,000 Section 80C basket, are old regime only.

EMPLOYER NPS

On Basic + DA of ₹10,00,000, 14% is ₹1,40,000. That is the new-regime cap, and the government-employer cap. For a private employer in the old regime, 10% of the same Basic + DA is ₹1,00,000. Employer PF, employer NPS, and superannuation are added together. The amount above ₹7,50,000 is a taxable perquisite in both regimes.

Payment	Limit	Regime
Employer NPS, 80CCD(2)	14% of Basic + DA in the new regime. 10% for a private employer in the old regime.	Both
Your extra NPS, 80CCD(1B)	₹50,000, outside the ₹1,50,000 cap	Old only
Your EPF, ELSS, PPF, and other 80C items	One shared ₹1,50,000	Old only

Ask for employer NPS first, if it is not already in the CTC. Then, only if you use the old regime, your own ₹50,000 under Section 80CCD(1B). Employee EPF is already inside the ₹1,50,000 Section 80C cap. ELSS or PPF helps only if that cap still has room. Employer PF is not an 80C item. Within the ₹7,50,000 combined cap it is not taxed as a perquisite in either regime.

Check AIS

Salary and the TDS on it show on AIS and Form 26AS after the employer files the TDS statement. That filing is usually quarterly, so a check in month three can still be early. Check again before you file.

WHAT SHOULD MATCH

Once the statement is filed, the salary and TDS for this employer should match your payslips for that quarter. A missing credit usually means the statement is not filed yet, or the PAN on it is wrong. Ask payroll to correct the statement. Do not wait until you file if the PAN is the problem.

✓ Employer name and PAN of the deductor
✓ Salary and TDS for the quarter, against the payslips
✓ Interest and other TDS, if a bank has deducted any
✓ No second entry for the same salary

Form 16, when the employer issues it, is due by 15 June 2027 for FY 2026-27. The ITR guide has the filing dates. AIS is the check you can do before Form 16 exists.

Read the payslip each month

Five lines are worth a look when the payslip arrives. Catching a wrong regime or a missing NPS line in month two is easier than finding it in June.

Line	What to look for	If it is wrong
TDS	The regime you asked for, and the declarations payroll has	Write to payroll
Professional tax	Only if your state charges it. The annual cap is ₹2,500. Delhi does not charge it. Odisha does not charge it from 1 April 2026. The deduction under Section 16(iii) is old regime only.	Check the state slab on the salaried guide
Your EPF	Usually 12% of basic. Some employers stop at the wage ceiling.	EPF ceiling page
Employer NPS	14% of Basic + DA in the new regime. 10% for a private employer in the old regime.	Ask HR if the line is missing
HRA	An exemption only in the old regime, and only after the rent papers are in	Send the receipts

Keep each payslip. A bonus or arrears month changes TDS for that month. It is not spread evenly across the year.

If payroll deducts ₹5,000 too little each month, that is ₹60,000 of tax you still owe for the year. Interest is extra. Under Section 234B it is 1% a month when the advance tax you have paid is less than 90% of the tax due, and Section 208 applies when the tax left to pay is ₹10,000 or more. The tax calendar has the 15 June, 15 September, 15 December, and 15 March dates.

Run your numbers

Estimate tax and take-home for the new salary under both regimes.

Income tax calculator →