Income Tax Calculator

Old vs new tax regime

India has two ways to work out income tax for individuals. The new regime has lower rates and a larger standard deduction, but almost no deductions or exemptions. The old regime has higher rates but lets you reduce your taxable income with investments, insurance premiums, home loan interest, HRA and more.

The new regime applies by default. If you want the old regime, you have to choose it. Salaried people can switch each year when filing their return; people with business income can switch back only once.

New regime tax slabs for tax year 2026-27

A rebate of up to ₹60,000 makes the tax zero if your taxable income is ₹12 L or less. With the ₹75,000 standard deduction, a salary of up to ₹12,75,000 is tax-free.

Old regime tax slabs for tax year 2026-27

A rebate of up to ₹12,500 makes the tax zero if your taxable income is ₹5 L or less. Salaried people and pensioners get a standard deduction of ₹50,000.

How is income tax calculated?

• Add up your income from salary, interest, rent and other sources.
• Subtract the standard deduction if you earn a salary or pension, and, in the old regime, your other deductions. The result is your taxable income.
• Apply the slab rates: each rate applies only to the part of your income that falls in that slab.
• Subtract the rebate if your taxable income is low enough.
• Add a surcharge if your income is above ₹50 lakh.
• Add 4% health and education cess on the tax and surcharge.

For example, a salaried person earning ₹15 L a year, with ₹1.5 lakh of tax-saving investments and ₹25,000 of health insurance premium, pays ₹97,500 under the new regime and ₹2,02,800 under the old regime.

Which tax regime is better for you?

It depends on how much you can claim in deductions. With few deductions, the new regime almost always gives lower tax. The old regime can win if you claim large deductions such as HRA, home loan interest and full tax-saving investments.

In the example above, adding ₹2 lakh of home loan interest and a ₹2.5 lakh HRA exemption brings the old regime tax down to ₹80,600, against ₹97,500 under the new regime. Enter your own numbers in the calculator to see which is better for you.

Rebate and marginal relief

Under the new regime, if your taxable income goes just over ₹12 L, marginal relief makes sure your tax is not more than the income above ₹12 L. For example, on a taxable income of ₹12,10,000 you pay ₹10,400 including cess, not the full slab tax.

The rebate does not apply to capital gains and other income taxed at special rates.

Surcharge and cess

Surcharge is charged on the tax, not on the income, and marginal relief applies just above each threshold. A 4% health and education cess is then added on the tax plus surcharge.

The new Income-tax Act

The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. It uses a single 'tax year' in place of the old financial year and assessment year, and many section numbers have changed. The tax rates and slabs above are unchanged from the previous year.

Frequently asked questions