Financial Templates for India

India runs two income tax regimes: the old regime with its deductions and exemptions, and the new regime with lower rates but far fewer deductions. The new regime is the default, and the financial year runs from 1 April to 31 March. For the 2026-27 financial year the new regime taxes nothing up to INR 4 lakh, then steps through 5, 10, 15, 20, 25 and 30 per cent, reaching the top rate above INR 24 lakh. A standard deduction of INR 75,000 and a Section 87A rebate of up to INR 60,000 mean salaried income up to about INR 12.75 lakh usually carries no tax. Comparing the two regimes each year is common practice, since the answer depends on how many deductions a person can actually claim.

A structural change landed on 1 April 2026, when the Income-tax Act, 2025 replaced the 1961 Act. The amounts and the broad design carried over, but the numbering did not: the familiar Section 80C is now Section 123 read with Schedule XV, and the extra NPS deduction that used to sit in Section 80CCD(1B) is now Section 124(3). Older articles, payroll declarations and tax-saving marketing still use the 1961 section numbers, so seeing both sets of labels in circulation is normal for a while.

The Employees Provident Fund is a large part of retirement saving for salaried workers, with 12 per cent of basic pay plus dearness allowance from the employee and a matching 12 per cent from the employer, of which 8.33 per cent is diverted to the Employees Pension Scheme. EPFO declared 8.25 per cent interest for the 2025-26 financial year. The Public Provident Fund, capped at INR 1.5 lakh a year and paying 7.1 per cent since July 2024, and the National Pension System are the other common long-term vehicles. Under the old regime these contributions also reduce taxable income, which is why saving and tax planning are so tangled together in India.

Healthcare is a mix of public and private provision. Ayushman Bharat PM-JAY gives eligible households cover of INR 5 lakh a year at empanelled hospitals, and since September 2024 everyone aged 70 and above qualifies regardless of income. Outside that, private treatment and private insurance premiums are ordinary budget lines for many households, and costs vary widely between cities and rural districts.

The Indian rupee is the currency, and the cost of living varies enormously across the country. Metropolitan cities such as Mumbai, Delhi and Bengaluru carry living costs that are multiples of what smaller cities and towns require. Rent, school fees, domestic help and commuting all differ dramatically by location, which is what makes a location-aware budget useful in the Indian context. Consumer price inflation was running at 4.45 per cent in July 2026, inside the Reserve Bank of India's target band of 4 per cent give or take two points.