What Is Section 115BAC and Can NRIs Choose the Old Tax Regime?

One thing that confused me was seeing “Section 115BAC” and assuming it was only relevant when filing under the new regime.

It's actually the provision governing the new tax regime, and the current rules make that regime the default for individuals and certain other taxpayers.

For AY 2026-27, the Income Tax Department lists the new regime as the default and gives separate slab rates from the old regime.

For an NRI, I'd be especially careful about looking at the source and nature of Indian income before comparing the two regimes. Not every deduction or exemption works the same way under both regimes.

Also, don't confuse the tax regime choice with your residential status. Being an NRI doesn't automatically mean you must use one particular regime.

I went through this when filing my return as an NRI.

If you have only non-business income, the Income Tax Department says you can exercise the option to change from the default new regime every year in the ITR, provided the return is filed by the applicable due date.

That's different from someone who has income from business or profession. There are additional compliance requirements for opting out of the new regime in that situation, including Form 10-IEA.

So I'd first determine whether your Indian income is purely from salary, property, interest, investments, etc., or whether you also have business/professional income.

I wouldn't choose the old regime simply because you have deductions. I'd actually calculate the tax under both regimes because the new regime has lower slab rates but fewer deductions.

Yes, NRIs can be covered by the new tax regime. The Income Tax Department's guidance specifically provides tax rates under Section 115BAC for non-resident individuals as well as residents.

The important change is that the new tax regime is the default regime. That doesn't mean you are permanently locked into it.

If you're an individual without business or professional income, you can generally choose the old regime instead while filing the ITR, subject to the applicable rules and filing deadline.

I initially thought the new regime was mandatory once it became the default, but that's not how it works. Default and mandatory are two different things here.

The bigger question is which regime gives you the lower tax after considering the deductions and exemptions you're actually eligible to claim.