Month: April 2026

Section 80U: Tax Deduction for Individuals with Disability

Posted on by CA Meet Dhrangadhariya

Last updated: 06 August 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Section 80U gives a resident individual who is certified as a person with disability (40% or more) a flat deduction of ₹75,000, or ₹1,25,000 for severe disability (80% or more).
  • No bills are needed, but the disability certificate from the prescribed medical authority must be furnished with the return.
  • If the certificate needs reassessment after a period, the deduction stops after the year it expires until a new certificate is furnished.
  • From Tax Year 2026-27 it is section 154 of the Income-tax Act, 2025, and it is available only in the old tax regime.

Section 80U gives a fixed deduction from total income to a resident individual who has a certified disability. The amount does not depend on how much the person spends. It is available only under the old tax regime.

From Tax Year 2026-27 the provision is section 154 of the Income-tax Act, 2025. For FY 2025-26 (assessment year 2026-27) it is section 80U of the 1961 Act.

Amount of deduction

Condition Deduction
Person with disability (40% or more) ₹75,000
Person with severe disability (80% or more, including severe autism, cerebral palsy and multiple disabilities) ₹1,25,000

Who can claim?

A resident individual who is certified by the prescribed medical authority, at any time during the year, as a person with disability or severe disability. A HUF cannot claim.

The disabilities covered include blindness, low vision, leprosy-cured, hearing impairment, locomotor disability, mental retardation, mental illness, autism, cerebral palsy and multiple disabilities.

Disability certificate

  • You do not need bills or proof of expenses. You need the certificate.
  • A copy of the certificate from the prescribed medical authority must be furnished with your return of income. Up to FY 2025-26 the form for autism, cerebral palsy and multiple disabilities was Form 10-IA. Under the Income-tax Rules, 2026 the certificate form is Form 30.
  • If the certificate says the disability must be reassessed after a stipulated period, the deduction is not allowed for the years after the year in which the certificate expires, until you get and furnish a new certificate.
  • The medical authority can be a civil surgeon or chief medical officer of a government hospital, or a specialist as notified, for example a neurologist.

Old regime and the due date

Section 80U works only in the old regime. A person without business income chooses the old regime along with the return furnished by the due date. If you file late, the new regime applies and you lose the deduction. File on time.

Section 80U vs section 80DD

Parameter Section 80DD Section 80U
Who claims Resident individual or HUF supporting a dependant with disability Resident individual who has the disability
Spending needed? Yes, spent on care or paid into an approved scheme No
Amount ₹75,000 or ₹1,25,000 ₹75,000 or ₹1,25,000
Both for the same person? Not allowed Not allowed
Regime Old regime only Old regime only

Frequently asked questions

How much is the deduction under section 80U?

₹75,000 for a person with disability (40% or more) and ₹1,25,000 for severe disability (80% or more). It is a fixed amount.

Who can claim section 80U?

A resident individual who is certified by the medical authority, at any time during the year, as a person with disability or severe disability. A HUF cannot claim it.

Is a disability certificate required?

Yes. A copy of the certificate from the prescribed medical authority has to be furnished with the return.

Can I claim 80U and 80DD together?

Not for the same person. A person who claims 80U for themselves means nobody can claim 80DD for them.

Is section 80U available in the new tax regime?

No. It is available only in the old tax regime, and the old regime must be chosen when you file your return on time.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Difference Between Exemption, Deduction and Rebate in Income Tax

Posted on by CA Meet Dhrangadhariya

Last updated: 29 July 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • An exemption keeps a particular income out of tax altogether, a deduction reduces your taxable income, and a rebate reduces the tax you have to pay.
  • Examples: agricultural income is exempt, section 80C is a deduction, and the section 87A rebate cuts your computed tax.
  • For Tax Year 2026-27 the new regime gives a rebate of up to ₹60,000 if taxable income is up to ₹12 lakh; the old regime gives up to ₹12,500 if income is up to ₹5 lakh.
  • Most exemptions and deductions (HRA, 80C, 80D) work only in the old regime.

Exemption, deduction, rebate and relief are often used as if they mean the same thing. They do not. Each works at a different stage of the tax calculation, and knowing which is which helps you plan your tax and read your Form 16 correctly.

Exemption

An exemption makes a particular income tax-free. That income is left out of your total income, so it never enters the calculation.

Examples:

  • Agricultural income.
  • House rent allowance (HRA), within the prescribed limit, in the old regime.
  • Leave travel allowance (LTA), on the conditions of the rules, in the old regime.
  • Scholarships granted to meet the cost of education.
  • Gratuity and leave encashment on retirement, up to the limits allowed.

In the Income-tax Act, 2025, which applies from 01/04/2026, most of these exemptions are listed in the Schedules to the Act, while the old section 10 no longer exists as a single section.

Deduction

A deduction is an amount you subtract from your income, because you invested in or spent on something the law encourages. It reduces your taxable income, so the tax saved depends on your slab rate.

Examples:

  • Standard deduction on salary and pension.
  • Section 80C: up to ₹1.5 lakh for PPF, ELSS, life insurance and more.
  • Section 80D: health insurance premium. In the old regime, up to ₹25,000 for self, spouse and children (₹50,000 if a senior citizen), and the same again for parents.
  • Section 80E: interest on an education loan.
  • Section 24(b): home loan interest, up to ₹2 lakh for a self-occupied house.

Rebate

A rebate reduces the tax itself, after it has been computed on your taxable income. The main one is section 87A, available to resident individuals.

New regime (default) Old regime
Taxable income limit ₹12,00,000 ₹5,00,000
Maximum rebate ₹60,000 ₹12,500

These limits apply to Tax Year 2026-27 and to FY 2025-26. Marginal relief is available in the new regime for income slightly above ₹12 lakh. The rebate does not apply to special rate income, such as tax on short term capital gains under section 111A, so read the conditions before relying on it. See our article on the section 87A rebate for a full explanation.

Exemption vs deduction vs rebate: comparison table

Feature Exemption Deduction Rebate
Meaning A specific income is tax-free An amount subtracted from income An amount subtracted from tax
Stage Before total income is arrived at Before taxable income is arrived at After tax is computed
Effect Income is not taxed at all Reduces taxable income Reduces tax payable
Examples Agricultural income, HRA Section 80C, 80D, 80E Section 87A
Most are available in Mostly the old regime Mostly the old regime Both regimes

A note on tax deducted at source (TDS) and tax relief

Rebate, deduction and exemption are not the same as TDS. TDS is tax collected in advance by the payer, such as an employer or bank, on salary, interest, commission, rent or professional fees. It is later adjusted against your final tax, and any excess is refunded to you.

“Tax relief” is a general term for any provision that lowers your tax, including the three above and relief for double taxation. “Tax benefit” is used in the same loose way.

Which is better?

All three help, but they act differently. An exemption removes income completely. A deduction saves tax at your slab rate. A rebate saves a fixed amount of tax. Because most deductions and exemptions work only in the old regime, compare your tax under both regimes every year.

Frequently asked questions

What is the difference between a deduction and an exemption?

An exemption excludes a specific income from tax, for example agricultural income. A deduction is subtracted from your income, for example the section 80C deduction, to reach taxable income.

What is a tax rebate?

A rebate reduces the tax computed on your taxable income. Section 87A is the common example.

Is a rebate the same as a refund?

No. A rebate cuts your tax liability before you pay. A refund is money returned to you when your tax paid or deducted is more than your tax liability.

Which comes first in the calculation?

Exemptions are left out of income first, then deductions are subtracted, tax is calculated on the taxable income, and the rebate is applied to that tax.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Section 80EE: Extra Deduction of Up to ₹50,000 on Home Loan Interest

Posted on by CA Meet Dhrangadhariya

Last updated: 26 September 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Section 80EE gives first-time home buyers an extra deduction of up to ₹50,000 a year on home loan interest, on top of the ₹2 lakh under section 24(b).
  • It applies only to loans sanctioned between 01/04/2016 and 31/03/2017, for a house worth up to ₹50 lakh with a loan up to ₹35 lakh, if you owned no house on the sanction date.
  • The deduction can still be claimed each year while that loan runs, only in the old tax regime.
  • From Tax Year 2026-27 it is section 130 of the Income-tax Act, 2025.

Section 80EE gave first-time home buyers an extra deduction of up to ₹50,000 a year on home loan interest. It was a limited-period scheme for loans sanctioned in FY 2016-17, but if you have such a loan you can still claim it every year until the loan ends, if you are in the old tax regime.

From Tax Year 2026-27 the provision is section 130 of the Income-tax Act, 2025. For FY 2025-26 (assessment year 2026-27) it is still section 80EE of the 1961 Act.

Conditions

  • Only an individual can claim (resident or non-resident). HUFs, firms and companies cannot.
  • The loan must be taken from a financial institution (a bank or housing finance company) to buy a residential house in India.
  • The loan must have been sanctioned between 01/04/2016 and 31/03/2017.
  • The loan amount must not exceed ₹35 lakh.
  • The value of the house must not exceed ₹50 lakh.
  • You must not have owned any residential house on the date the loan was sanctioned.
  • The same interest cannot be claimed under another section for that year or any other year.
  • It is available only in the old tax regime.

How much?

Up to ₹50,000 a year. Claim the interest first under section 24(b) (section 22 in the 2025 Act), which allows up to ₹2 lakh for a self-occupied house. If the interest is more, the balance can be claimed under 80EE, up to ₹50,000, so the total is up to ₹2,50,000. The total cannot exceed the interest you actually pay.

For a let-out house section 24(b) has no ₹2 lakh ceiling on interest, though the loss from house property that can be set off against other income is limited to ₹2 lakh a year.

Examples

  1. Sunita bought her first home for ₹45 lakh with a loan of ₹30 lakh sanctioned on 15/01/2017. She owned no house. She can claim up to ₹50,000 under section 80EE each year for the interest in excess of the section 24(b) limit.
  2. Rohan paid ₹2,40,000 as interest in a year. He claims ₹2,00,000 under section 24(b) and the remaining ₹40,000 under section 80EE. Total ₹2,40,000.
  3. Sonia’s house cost ₹52 lakh. She cannot claim, because the value exceeds ₹50 lakh.
  4. Ajay’s loan was ₹38 lakh. He cannot claim, because the loan exceeds ₹35 lakh.
  5. Two friends buy their first home together, each with a loan of ₹15 lakh, for a house worth ₹40 lakh. If each meets the conditions, each can claim up to ₹50,000.

Documents

  • The interest certificate from the lender, showing the principal and interest for the year.
  • The sanction letter and loan agreement, showing the sanction date and amount.
  • Papers that show the value of the house.

Section 24(b) vs section 80EE

Feature Section 24(b) Section 80EE
Interest allowed Up to ₹2 lakh for self-occupied house Extra up to ₹50,000
Who Individuals and HUFs Individuals only
Loan period Any Sanctioned 01/04/2016 to 31/03/2017
House value and loan limits None ₹50 lakh and ₹35 lakh
Regime Self-occupied house: old regime only. Let-out house: interest is also allowed in the new regime Old regime only

Section 80EE vs section 80EEA

Basis Section 80EE Section 80EEA
Loan sanctioned 01/04/2016 to 31/03/2017 01/04/2019 to 31/03/2022
Deduction ₹50,000 ₹1,50,000
Loan limit ₹35 lakh No limit
House value ₹50 lakh Stamp duty value up to ₹45 lakh

In the 2025 Act, section 80EE is section 130 and section 80EEA is section 131.

Frequently asked questions

Can I claim section 80EE for a loan taken now?

No. It is only for loans sanctioned between 01/04/2016 and 31/03/2017. If your loan was sanctioned then and meets the conditions, you can still claim it each year.

What is the limit under section 80EE?

₹50,000 a year, in addition to section 24(b).

Who can claim 80EE?

Only individuals who owned no residential house on the date the loan was sanctioned. HUFs and companies cannot.

Is it available if the house is let out?

The section does not require self-occupation, but the interest cannot be claimed twice under different sections.

Is section 80EE available in the new tax regime?

No. It is available only in the old tax regime.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Section 80DDB: Deduction for Medical Treatment of Specified Diseases

Posted on by CA Meet Dhrangadhariya

Last updated: 06 September 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Section 80DDB allows a deduction for the amount actually paid on treatment of specified serious diseases, up to ₹40,000, or up to ₹1,00,000 if the patient is a senior citizen.
  • The deduction is reduced by any amount received from insurance or reimbursed by an employer, so only your net out-of-pocket cost counts.
  • It covers you and your dependants (spouse, children, parents, brothers and sisters), and needs a prescription from the specialist named in the rules.
  • From Tax Year 2026-27 it is section 128 of the Income-tax Act, 2025, and it is available only in the old tax regime.

How to claim the section 80DDB deduction

1. Check that the illness is on the specified list
↓
2. Get a prescription from the specialist named for that disease
↓
3. Pay the treatment cost and keep the bills
↓
4. Reduce the claim by insurance or employer reimbursement
↓
5. Claim the balance, up to ₹40,000 or ₹1,00,000, in the old regime

Treating a serious illness is expensive. Section 80DDB lets a resident individual or HUF deduct what they actually pay on the treatment of certain specified diseases, up to a limit. It reduces taxable income, and is available only under the old tax regime.

From Tax Year 2026-27 the provision is section 128 of the Income-tax Act, 2025. For FY 2025-26 (assessment year 2026-27) it is section 80DDB of the 1961 Act.

Who can claim?

  • A resident individual, for treatment of self or a dependant.
  • A HUF, for treatment of any of its members.
  • A dependant means the spouse, children, parents, brothers and sisters of the individual. Companies and other entities cannot claim.

Deduction limit

Patient Maximum deduction
Under 60 years ₹40,000
Senior citizen (60 or more at any time during the year) ₹1,00,000

The deduction is the amount actually paid or the limit, whichever is less. It is then reduced by any amount received under an insurance policy or reimbursed by an employer for that treatment.

Examples

  1. You pay ₹80,000 for treatment and get ₹30,000 from the insurer. For a patient under 60, the limit is ₹40,000 (less than the ₹80,000 paid), so the deduction is ₹40,000 less ₹30,000, which is ₹10,000. For a senior citizen the amount paid (₹80,000) is less than the limit of ₹1,00,000, so the deduction is ₹80,000 less ₹30,000, which is ₹50,000.
  2. You pay ₹80,000 and the insurer pays ₹60,000. For a patient under 60 it is ₹40,000 less ₹60,000, so there is no deduction. For a senior citizen it is ₹80,000 less ₹60,000, which is ₹20,000.

In short, take the lower of the amount paid and the limit, then subtract what the insurer or employer paid.

Diseases covered and who must prescribe

Disease Specialist who must prescribe
Specified neurological diseases where disability is 40% or more: dementia, dystonia musculorum deformans, motor neuron disease, ataxia, chorea, hemiballismus, aphasia and Parkinson’s disease Neurologist with D.M. in Neurology
Malignant cancers Oncologist with D.M. in Oncology
Full blown AIDS Any specialist with a post-graduate degree in General or Internal Medicine
Chronic renal failure Nephrologist with D.M. in Nephrology, or urologist with M.Ch. in Urology
Haemophilia and thalassaemia Specialist with D.M. in Haematology

An equivalent degree recognised by the Medical Council of India is also accepted. If the patient is treated in a government hospital, a full-time specialist of that hospital with a post-graduate degree in General or Internal Medicine (or equivalent) can give the prescription.

What should the prescription show?

  • The patient’s name and age.
  • The disease or ailment.
  • The name, address, registration number and qualification of the specialist.
  • For a government hospital, the hospital’s name and address.

How to claim

  1. Keep the specialist’s prescription and the bills.
  2. Subtract any insurance claim or employer reimbursement.
  3. Report the net amount, within the limit, in the deductions section of your return.
  4. Choose the old regime. The deduction is not available in the new regime.

Frequently asked questions

What is the limit under section 80DDB?

₹40,000, or ₹1,00,000 if the patient is a senior citizen (60 or more at any time during the year). The claim is the amount paid or the limit, whichever is less, reduced by any insurance or reimbursement.

Which diseases are covered?

Specified neurological diseases (with 40% or more disability), malignant cancers, full blown AIDS, chronic renal failure, and haemophilia and thalassaemia.

Is a prescription needed?

Yes, from the specialist named in the rules for that disease. If treated in a government hospital, a full-time specialist of that hospital can give it.

Who counts as a dependant?

The spouse, children, parents, brothers and sisters of an individual, or a member of a HUF.

Is section 80DDB available in the new tax regime?

No. It is available only in the old tax regime.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Section 80DD: Deduction for Dependant with Disability, Limit and Who Can Claim

Posted on by CA Meet Dhrangadhariya

Last updated: 11 July 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Section 80DD gives a resident individual or HUF a flat deduction of ₹75,000 for a dependant with disability (40% or more), or ₹1,25,000 for severe disability (80% or more).
  • It does not depend on the actual amount spent, but you must have spent on the dependant’s medical treatment, nursing, training or rehabilitation, or paid into an approved insurer scheme for their maintenance.
  • The dependant is the spouse, children, parents, brothers or sisters, and cannot be someone who claims section 80U for themselves.
  • From Tax Year 2026-27 the provision is section 127 of the Income-tax Act, 2025. It is available only in the old tax regime.

Section 80DD helps families who look after a dependant with a disability. A resident individual or Hindu undivided family (HUF) gets a fixed deduction from income, whatever the actual expense, provided they spent on the dependant’s care or paid into an approved scheme for the dependant’s future. It is available only under the old tax regime.

From Tax Year 2026-27 the provision is section 127 of the Income-tax Act, 2025. For FY 2025-26 (assessment year 2026-27) it is still section 80DD of the 1961 Act.

Amount of deduction

Disability of the dependant Deduction
40% or more, but less than 80% ₹75,000
Severe disability: 80% or more, including autism, cerebral palsy and multiple disabilities certified as severe ₹1,25,000

The amount is fixed. You do not need bills for the amount you claim, but you must actually have incurred the spending, or paid the scheme premium, in that year.

Conditions

  • The claimant must be a resident individual or HUF.
  • The dependant is, for an individual, the spouse, children, parents, brothers and sisters. For a HUF, it is a member of the HUF. The dependant must be dependent wholly or mainly on the claimant.
  • The claim is for a dependant, not for yourself. If you have a disability yourself, see section 80U.
  • The dependant must not claim a deduction under section 80U (section 154 in the new Act) for themselves. If they do, 80DD cannot be claimed for them.
  • You must either (a) spend on medical treatment (including nursing), training and rehabilitation of the dependant, or (b) pay or deposit an amount under an approved scheme of the Life Insurance Corporation or another insurer for the dependant’s maintenance.
  • For the insurance route, the scheme must pay an annuity or lump sum to the dependant on your death, or when you reach 60, and you must name the dependant (or a trust or other person for the dependant) to receive it.

Disabilities covered

The disability must be certified by the medical authority. The list includes blindness, low vision, leprosy-cured, hearing impairment, locomotor disability, mental retardation, mental illness, autism, cerebral palsy and multiple disabilities.

Certificate and documents

  • The disability must be certified by the prescribed medical authority, such as a civil surgeon or chief medical officer of a government hospital, or a specialist neurologist where the rules provide.
  • A copy of the certificate must be furnished with your return of income. Up to FY 2025-26 the form for autism, cerebral palsy and multiple disability was Form 10-IA. Under the Income-tax Rules, 2026 the certificate form is Form 30.
  • If the certificate says the disability needs reassessment after a period, the deduction stops after the year the certificate expires, until you furnish a new certificate.
  • If you claim the insurance route, keep the premium receipts and the policy terms.

Section 80DD vs section 80U

Basis Section 80DD Section 80U
Who claims A resident individual or HUF who supports a dependant with disability A resident individual with disability, for themselves
Amount ₹75,000, or ₹1,25,000 for severe disability ₹75,000, or ₹1,25,000 for severe disability
Both for the same person? Not allowed Not allowed
Regime Old regime only Old regime only

If the dependant dies first

If the dependant dies before you, the amount paid or deposited under the insurance scheme is treated as your income of the year in which you receive it, and is taxed.

Remember

The deduction is in addition to other deductions such as section 80C or 80D. Check your tax under both regimes, because 80DD, like most deductions, is lost in the new regime.

Frequently asked questions

How much is the deduction under section 80DD?

₹75,000 if the dependant has a disability of 40% or more, and ₹1,25,000 if the disability is severe (80% or more). It is a fixed amount, not the actual expense.

Who is a dependant for section 80DD?

For an individual, the spouse, children, parents, brothers and sisters. For a HUF, a member of the HUF.

Can I claim 80DD if the dependant claims section 80U?

No. If the dependant claims 80U for themselves, you cannot claim 80DD for the same person.

Is a medical certificate needed?

Yes. A certificate from the prescribed medical authority has to be furnished with the return.

Is section 80DD available in the new tax regime?

No. It is available only in the old tax regime.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Standard Deduction for Salaried Individuals in New and Old Tax Regime

Posted on by CA Meet Dhrangadhariya

Last updated: 15 September 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • The standard deduction is a flat amount subtracted from salary or pension income without any proof of expenses.
  • It is ₹75,000 in the new tax regime and ₹50,000 in the old regime, and cannot exceed your salary or pension income.
  • For family pension the deduction is ₹25,000 in the new regime and ₹15,000 in the old regime.
  • From Tax Year 2026-27 it is allowed under section 19 of the Income-tax Act, 2025.

The standard deduction is a fixed amount that salaried employees and pensioners can subtract from their income without producing any bills or proof. It was removed years ago, brought back in Budget 2018, and has been increased since, most recently in the new regime to ₹75,000.

Amount of standard deduction

Regime Salary or pension Family pension
New tax regime (default) ₹75,000 ₹25,000
Old tax regime ₹50,000 ₹15,000

In each case the deduction cannot exceed the salary or pension you actually received. These amounts apply to FY 2025-26 and to Tax Year 2026-27. The Union Budget 2026 did not change income tax rates or slabs for Tax Year 2026-27, and the standard deduction stayed as it was.

Which section gives it?

For FY 2025-26 (assessment year 2026-27) it is section 16(ia) of the Income-tax Act, 1961, whose proviso substituting ₹75,000 for the new regime applies from 01/04/2025. For Tax Year 2026-27 onwards it is section 19 of the Income-tax Act, 2025, which lists all the deductions from salary in one place.

Who can claim?

  • Employees who earn salary income, in private or government jobs.
  • Pensioners, since pension is taxed as salary.
  • Recipients of family pension, at the lower family pension amount.

It is not available for business or professional income, or to someone with no salary or pension.

Why does it matter?

  • It reduces taxable income automatically, so it lowers the tax of nearly every salaried person.
  • No documents are needed.
  • It is available in both regimes, so it does not change the choice between them, but the new regime’s higher amount is one reason many salaried taxpayers find it cheaper.

Example

Ms C earns a salary of ₹9,00,000 in FY 2025-26 and has no other income. In the new regime her taxable income is ₹9,00,000 less ₹75,000, which is ₹8,25,000. In the old regime it would be ₹8,50,000 before any other deductions.

What about the documents for filing the return?

You need no proof for the standard deduction. For the return as a whole, you should still keep Form 16, Form 26AS, the AIS and any proofs for other deductions you claim.

Frequently asked questions

What is the standard deduction for salaried employees?

₹75,000 in the new tax regime and ₹50,000 in the old tax regime, or the amount of your salary if that is less.

Do I need documents to claim the standard deduction?

No. It is allowed automatically on salary and pension income, without proof of any expense.

Can pensioners claim the standard deduction?

Yes. Pension is taxed as salary, so pensioners can claim it. Family pension has a separate deduction of ₹25,000 in the new regime and ₹15,000 in the old regime.

Can a self-employed person claim the standard deduction?

No. It is only for income taxed as salary or pension.

Which section gives the standard deduction now?

Section 19 of the Income-tax Act, 2025 from Tax Year 2026-27. Earlier it was section 16(ia).

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

MCA Compliance Relief Scheme (CCFS-2026): Complete Guide for Companies

Posted on by CA Meet Dhrangadhariya

Missed Your MCA Filings? Your Step-by-Step Recovery Plan Under CCTS-2026

The Ministry of Corporate Affairs (MCA) has introduced the Companies Compliance Facilitation Scheme, 2026 (CCFS-2026) to provide a one-time opportunity for companies to regularize pending compliances at reduced cost.

This scheme is especially beneficial for companies struggling with delayed filings and high additional fees.

Scheme Period

  • Start Date: 15 April 2026

  • End Date: 15 July 2026

Companies must act within this limited window to avail benefits.

Objective of CCFS-2026

The scheme aims to:

  • Reduce compliance burden on companies

  • Allow filing of pending annual returns and financial statements

  • Provide an opportunity to inactive companies to:

    • Become dormant

    • Close operations (strike-off)

     

  • Improve accuracy of MCA records

As per MCA, this initiative is introduced to support businesses facing financial burden due to heavy additional fees on delayed filings 

Key Benefits Under the Scheme

1. 90% Late Fee Waiver

  • Applicable on:

    • Annual Return (MGT-7 / MGT-7A)

    • Financial Statements (AOC-4 series)

     

  • Companies need to pay only 10% of additional fees

Major relief considering ₹100 per day penalty with no upper limit 

2. 75% Saving on Strike-Off

  • File Form STK-2

  • Pay only 25% of normal filing fees

Suitable for companies that want to exit business.

3. 50% Fee for Dormant Status

  • Apply via Form MSC-1

  • Pay only 50% of normal fees

Helps inactive companies maintain legal status with minimal compliance.

Forms Covered Under the Scheme

The scheme allows filing of multiple pending forms, including:

  • MGT-7 / MGT-7A

  • AOC-4 (all variants including XBRL, NBFC, CFS)

  • ADT-1

  • FC-3, FC-4

  • Old Act forms (like 23AC, 23ACA, etc.)

Immunity from Penalty (Important)

Immunity is conditional:

Available if:

  • Filing is done before notice, or

  • Within 30 days of notice

Not available if:

  • Penalty order already passed

  • 30-day window after notice has expired

In such cases, penalties remain payable even if filings are completed 

Who Cannot Avail CCFS-2026

The scheme is not applicable to:

  • Companies with final strike-off notice issued (u/s 248)

  • Companies already applied for strike-off

  • Companies already applied for dormant status

  • Companies dissolved under amalgamation

  • Vanishing companies

Important Post-Scheme Warning

After 15 July 2026:

  • ROC will initiate strict action

  • Non-compliant companies may face:

    • Penalties

    • Legal consequences

     

 Practical Insights

  • Ideal for clearing backlog at minimal cost

  • MSMEs and small companies benefit the most

  • Evaluate whether:

    • Continue business → File returns

    • Pause operations → Dormant

    • Exit → Strike-off

     

Conclusion

The CCFS-2026 is a valuable opportunity for companies to become compliant at significantly reduced cost. Missing this window may result in heavy penalties and regulatory action.

Timely decision-making is crucial.

Click here to download MCA Official Circular

Disclaimer:

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Income Tax Rebate Under Section 87A

Posted on by CA Meet Dhrangadhariya

Last updated: 17 July 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Section 87A gives resident individuals a rebate of up to ₹60,000 in the new regime for total income up to ₹12 lakh, so no tax is payable.
  • In the old regime the rebate is up to ₹12,500 for total income up to ₹5 lakh.
  • Marginal relief in the new regime protects taxpayers whose income is only slightly above ₹12 lakh; the old regime has none.
  • The rebate is not available against tax on special-rate capital gains in the new regime, and it is calculated before the 4% cess.

How the section 87A rebate works

1. Compute total income after the deductions allowed in your regime
↓
2. Check the limit: ₹12 lakh in the new regime, ₹5 lakh in the old regime
↓
3. Compute tax on the slab rates before cess
↓
4. Rebate is the lower of the tax and ₹60,000 (new) or ₹12,500 (old)
↓
5. If income is just above ₹12 lakh in the new regime, apply marginal relief
↓
6. Add 4% health and education cess on the tax that remains

A rebate under section 87A is a reduction in tax for resident individuals whose total income is within a set limit. Under the new tax regime the rebate is up to ₹60,000 for a total income up to ₹12 lakh, so no tax is payable. Under the old tax regime the rebate is up to ₹12,500 for a total income up to ₹5 lakh. These limits applied to FY 2025-26 (AY 2026-27). Budget 2026 did not change the slab rates, so the same limits are being applied for Tax Year 2026-27.

What is Rebate Under Section 87A?

  • The rebate is a relief for low and middle income earners. It is available only to resident individuals.
  • It reduces the income tax payable, calculated on the slab rates before adding the 4% health and education cess.
  • If the rebate equals the tax payable, the taxpayer pays no income tax at all.
  • It is not available to HUFs, companies, firms or non-residents.

Eligibility Criteria for Rebate

  1. Only resident individuals are eligible.
  2. The total income, after the deductions allowed in the regime chosen, must not exceed:
    - ₹12 lakh under the new tax regime, or
    - ₹5 lakh under the old tax regime.
  3. The rebate is the lower of the limit (₹60,000 or ₹12,500) and the tax payable before cess.
  4. Under the new regime the rebate cannot be used against tax on capital gains taxed at special rates (sections 111A, 112 and 112A).

Section 87A Rebate Limit: New vs Old Tax Regime

Particulars New regime Old regime
Total income limit ₹12,00,000 ₹5,00,000
Maximum rebate ₹60,000 ₹12,500
Standard deduction for salaried and pensioners ₹75,000 ₹50,000
Marginal relief available Yes No

Because the standard deduction in the new regime is ₹75,000, a salaried taxpayer with a salary of up to ₹12,75,000 and no other income has a taxable income of ₹12 lakh or less and pays no tax.

Why ₹12 lakh gives nil tax in the new regime

Slab Rate Tax
Up to ₹4,00,000 Nil 0
₹4,00,001 to ₹8,00,000 5% 20,000
₹8,00,001 to ₹12,00,000 10% 40,000
Total tax on ₹12,00,000 60,000
Less: rebate 60,000
Tax payable 0

How to Claim the Rebate

  1. Calculate your gross total income for the year.
  2. Reduce the deductions allowed in the regime you have chosen.
  3. Arrive at your total income and compare it with the limit (₹12 lakh or ₹5 lakh).
  4. File your return with the correct income and deductions.
  5. The income tax portal calculates the rebate automatically if your income is within the limit.

Examples

1. New tax regime

Particulars Amount (₹)
Total income 12,00,000
Tax as per slab rates 60,000
Less: rebate under section 87A 60,000
Tax payable 0

Deductions such as section 80C are not available in the new regime.

2. Old tax regime

Particulars Amount (₹)
Gross total income 6,50,000
Less: deduction under section 80C 1,50,000
Total income 5,00,000
Tax as per slab rates 12,500
Less: rebate under section 87A 12,500
Tax payable 0

Incomes Not Eligible for the Rebate

The rebate cannot be claimed against tax on:

  • Long-term capital gains under section 112A and other capital gains taxed at special rates (new regime).
  • Short-term capital gains on listed equity under section 111A (new regime).
  • Income taxed at special rates, such as winnings from lotteries and games.

Marginal Relief in the New Tax Regime

If the total income is slightly above ₹12 lakh, the tax can be higher than the extra income earned above ₹12 lakh. Marginal relief makes sure the tax payable is not more than that extra income.

How to calculate it:

  1. Find the excess over ₹12 lakh (total income minus ₹12,00,000). Call it A.
  2. Compute the tax on the total income before cess. Call it B.
  3. If B is more than A, the rebate is B minus A, and the tax payable equals A.

Example

Mr. Ravi, a resident, has a total income of ₹12,15,000 in the new tax regime.

Step Amount (₹)
Excess over ₹12,00,000 (A) 15,000
Tax on ₹12,15,000 before cess (B): 60,000 on the first ₹12 lakh plus 15% of 15,000 62,250
Rebate (B minus A) 47,250
Tax payable before cess (equal to the excess income of ₹15,000) 15,000
Add: health and education cess at 4% 600
Total tax liability 15,600

The old regime has no marginal relief, so a taxable income just above ₹5 lakh loses the whole ₹12,500 rebate at once.

Section 87A and the Income-tax Act, 2025 (now section 156)

The Income-tax Act, 2025 applies from 1 April 2026, and the rebate of section 87A is now in section 156. Sub-section (1) gives the rebate of up to ₹12,500 where total income does not exceed ₹5 lakh. Sub-section (2) gives the rebate of up to ₹60,000 where total income does not exceed ₹12 lakh and the tax is computed on the new regime slab rates of section 202. For income earned up to 31 March 2026 (FY 2025-26, AY 2026-27) the Income-tax Act, 1961 and its section 87A still apply. The rules described here are the same under both Acts.

Frequently asked questions

Who can claim the rebate under section 87A?

Only resident individuals whose total income is within ₹12 lakh in the new tax regime or ₹5 lakh in the old tax regime. HUFs, companies, firms and non-residents cannot claim it.

How much is the section 87A rebate?

Up to ₹60,000 in the new tax regime and up to ₹12,500 in the old tax regime, limited to the tax payable before cess.

Is there tax if my income is ₹12 lakh in the new regime?

No. Tax on ₹12 lakh is ₹60,000 and the rebate of ₹60,000 brings it to nil. A salaried taxpayer with a salary up to ₹12,75,000 also pays no tax after the ₹75,000 standard deduction.

What is marginal relief on the rebate?

If income is slightly above ₹12 lakh in the new regime, marginal relief limits the tax to the amount of income above ₹12 lakh. The old regime has no marginal relief.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Audit Trail in Accounting Software: Companies Rule 3(1), Auditor Reporting under Rule 11(g), Retention and Penalty

Posted on by CA Meet Dhrangadhariya

Last updated: 09 October 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Every company that keeps its books in accounting software must use software that records an audit trail of each transaction, keeps an edit log of every change with its date, and cannot have the audit trail switched off.
  • The rule applies from the financial year beginning on or after 01/04/2023 (FY 2023-24), after two deferments.
  • The statutory auditor must report on it in the audit report under Rule 11(g): whether the feature existed, operated all year for all transactions, was not tampered with, and was preserved as the law requires.
  • Books of account are kept for eight financial years under section 128, and the audit trail has to be preserved for the same statutory period.

An audit trail is a time-stamped record that shows who entered or changed a transaction and when. For companies, having it in the accounting software is no longer a best practice but a legal requirement, and the statutory auditor must say in the audit report whether the company complied.

The rule for companies

The proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 says that, for a financial year beginning on or after 01/04/2023, every company which uses accounting software for maintaining its books of account shall use only such software which:

  1. has a feature of recording an audit trail of each and every transaction,
  2. creates an edit log of each change made in the books of account along with the date when the change was made, and
  3. ensures that the audit trail cannot be disabled.

The date was first 01/04/2021 and was deferred twice, finally to 01/04/2023 by the Companies (Accounts) Second Amendment Rules, 2022. For a company with a March year-end, the first year covered was FY 2023-24.

Who is covered

Every company that uses accounting software, which includes private limited companies, OPCs, Section 8 companies, and Government companies. If the books are kept entirely on paper, the rule has nothing to operate on. Accounting software can be on-premise, on the cloud, a SaaS product, hosted in India or abroad, or run by a service provider for the company. Where a separate system (say a billing or payroll tool) generates entries that become part of the books, that system needs the feature too, because its records form part of the books of account.

What the auditor reports: Rule 11(g)

Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014, read with section 143(3), requires the audit report to state in the section on other legal and regulatory requirements whether the company has used accounting software which:

  • has a feature of recording audit trail (edit log), and that feature has been operated throughout the year for all transactions recorded in the software, and
  • the audit trail has not been tampered with, and
  • the audit trail has been preserved by the company as per the statutory requirements for record retention.

The ICAI Implementation Guide expects the auditor to check whether the feature can be configured or switched off, whether it was enabled for the whole year, whether every transaction is covered, and whether the records have been kept for the statutory period. Where the books are entirely manual, the auditor states that as a fact.

How long to keep it

Section 128(5) requires books of account and the related vouchers to be kept for not less than eight financial years immediately preceding the current year (or all years, if the company is younger than eight years). The audit trail is preserved for that period, which means log storage, backup and the ability to produce the data on request.

Penalty

Section 128(6) provides that the managing director, the whole-time director in charge of finance, the Chief Financial Officer or any other person the Board has charged with complying with section 128, is liable to a fine of at least Rs 50,000 and up to Rs 5 lakh if the section is contravened. The imprisonment limb that earlier appeared in that section was omitted by an amendment effective 21/12/2020.

What a company should do

  • Ask the software vendor in writing whether the audit trail is on by default, whether any user, including an administrator, can disable it, and how long logs are kept.
  • Check the settings once a year and note the date of the check.
  • Do not delete, trim or overwrite log data to save space before the retention period ends.
  • Keep a single list of every system that feeds the books, with its audit trail status.
  • Discuss any gap with the auditor before the year closes, because a gap is reported in the audit report.

Points to check

  • This post is based on the text of the Rules as described in ICAI material, and on section 128 as reported by legal databases. Check the current text on the MCA website and in the latest ICAI guidance before you rely on it for a particular case.
  • The 2024 ICAI guide deals with detailed audit queries, such as database-level logging; follow it for your own audit file.

Frequently asked questions

Who must use accounting software with an audit trail?

Every company, including a private limited company, OPC and Section 8 company, that maintains its books of account in accounting software. Where books are kept entirely manually, the rule has nothing to apply to and the auditor reports that fact.

From when does it apply?

From the financial year beginning on or after 01/04/2023, which is FY 2023-24. The original 2021 date was deferred twice.

What must the software do?

Record an audit trail of each and every transaction, create an edit log of each change made in the books with the date of the change, and ensure that the audit trail cannot be disabled.

What does the auditor report?

Under Rule 11(g), in the report on other legal and regulatory requirements, whether the company used software with an audit trail feature, whether it operated throughout the year for all transactions, whether it was tampered with, and whether the audit trail was preserved as per statutory requirements.

How long should the audit trail be kept?

The books of account and the vouchers must be kept for at least eight financial years under section 128(5), and the audit trail is to be preserved in line with that statutory period.

Does it apply to a partnership firm or LLP?

The rule is made under the Companies Act, 2013 and applies to companies. A firm or LLP is not covered by it.

What is the penalty?

Section 128(6) provides a fine of Rs 50,000 to Rs 5 lakh on the managing director, whole-time director in charge of finance, the CFO or the person the Board has charged with complying with section 128. The words providing imprisonment were omitted in December 2020.

Official sources

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.

Section 80TTA vs 80TTB: Key Differences, Benefits and How to Claim

Posted on by CA Meet Dhrangadhariya

Last updated: 27 September 2026 · Written and reviewed by CA Meet Dhrangadhariya, CSM & Co LLP

Quick summary

  • Section 80TTA gives individuals and HUFs a deduction of up to ₹10,000 on savings account interest.
  • Section 80TTB gives resident senior citizens (age 60 or more) up to ₹50,000 on interest from savings accounts, fixed deposits and recurring deposits. A senior citizen cannot claim 80TTA.
  • Both are available only in the old tax regime, and both appear as section 153 of the Income-tax Act, 2025 from Tax Year 2026-27.
  • The deduction is not automatic: enter it in your return.

Section 80TTA and section 80TTB give a deduction on interest earned from bank and post office deposits. They are alternatives. 80TTA is for everyone else and is smaller, while 80TTB is only for senior citizens and is wider and larger. Both are available only in the old tax regime.

What is section 80TTA?

Section 80TTA allows an individual or HUF a deduction of up to ₹10,000 (or the actual interest, if less) on interest from a savings account with a bank, a co-operative bank or a post office. It does not cover interest on fixed deposits or recurring deposits. A senior citizen who claims section 80TTB cannot claim 80TTA.

What is section 80TTB?

Section 80TTB allows a resident senior citizen a deduction of up to ₹50,000 (or the actual interest, if less) on interest from savings accounts and time deposits, including fixed deposits and recurring deposits, with a bank, a co-operative bank or a post office.

A senior citizen here means a resident individual who is 60 or more at any time during the year.

Key differences

Basis Section 80TTA Section 80TTB
Who can claim Individuals and HUFs (not senior citizens claiming 80TTB) Resident senior citizens, age 60 or more
Maximum deduction ₹10,000 or actual interest, whichever is less ₹50,000 or actual interest, whichever is less
Interest covered Savings account Savings account, fixed deposit, recurring deposit
Institutions Bank, co-operative bank, post office Bank, co-operative bank, post office
Regime Old regime only Old regime only

Example

Mr B is 59 years old on 01/04/2025 and turns 60 on 15/01/2026. In FY 2025-26 he earns ₹7,000 as savings account interest and ₹20,000 as FD interest.

  • Because he is 60 at some point during FY 2025-26, he is a senior citizen for that year. He can claim 80TTB on the full ₹27,000 (below the ₹50,000 limit).
  • If he were still under 60 throughout the year, he could claim only 80TTA on the ₹7,000 savings interest, and nothing on the FD interest.

New regime

Neither section is available if you choose the new tax regime. Interest income is then simply taxed at slab rates.

Income-tax Act, 2025

From Tax Year 2026-27 both deductions are found in section 153 of the Income-tax Act, 2025, with the same limits. Budget 2025 raised the TDS threshold on interest (₹50,000 for others and ₹1,00,000 for senior citizens), but that only affects when TDS is deducted. It does not change the 80TTA and 80TTB limits.

How to claim

The deduction is not given automatically. Check your interest in the bank statements and the Annual Information Statement (AIS), then enter the amount in the deductions schedule of your return. Keep the interest certificates from the bank or post office.

Frequently asked questions

Who can claim section 80TTA?

Individuals and HUFs who are not claiming section 80TTB, up to ₹10,000 on interest from savings accounts with a bank, co-operative bank or post office.

Who can claim section 80TTB?

Only resident individuals aged 60 or more at any time during the year, up to ₹50,000 on interest from savings and time deposits.

Can a senior citizen claim both?

No. A senior citizen claims 80TTB and cannot claim 80TTA.

Is FD interest covered by section 80TTA?

No. Only savings account interest is covered. FD and RD interest qualifies only for senior citizens under 80TTB.

Are these deductions available in the new regime?

No. Both are available only in the old tax regime.

Official sources

Related reading

Disclaimer

This article is for general informational purposes only and should not be considered professional advice. Please consult a qualified expert for advice tailored to your specific situation. The author and website owner are not liable for any errors or actions based on this content.