Income Tax Calculator India — New vs Old Regime (FY 2025-26 & 2026-27)
📊 Methodology: This calculator uses standard financial formulas. Results are estimates for planning purposes only. Consult a qualified financial advisor before making financial decisions.
Which income tax regime saves more money in India for 2026?
The Indian income tax system uses progressive tax brackets, meaning different portions of your income are taxed at different rates. Only the income within each bracket is taxed at that bracket's rate, not your entire income. This means your effective tax rate (total tax divided by total income) is always lower than your marginal tax bracket. — also see our GST calculator. — also see our salary calculator. Need to continue this calculation? Try the Salary Calculator or the HRA Calculator.
What should you know before using this tool?
The Income Tax Calculator is built for people who want a fast answer without losing context. It keeps the calculation simple, shows the result clearly, and helps you understand what the number means before you use it in a real decision.
This calculator is designed to make a specific everyday calculation faster and clearer. It gives a structured result so you can compare options, check assumptions, or plan the next step with less manual work.
🗓️ Current-year status (FY 2026-27 / AY 2027-28): The slabs in this calculator were introduced by Budget 2025 with effect from FY 2025-26 (AY 2026-27) and continue to apply for FY 2026-27 (AY 2027-28) unless amended by a later Finance Act. Quick terminology: the Financial Year (FY) is when you earn the income; the Assessment Year (AY) is the following year when you file the return — income earned April 2026–March 2027 is FY 2026-27, filed in AY 2027-28. Verify current rates at incometax.gov.in. Last verified: June 2026.
📜 CBDT & Income Tax Department sources
Slab rates, Section 87A rebate, and standard deductions follow the Income Tax Act, 1961 as amended by the Finance Act 2025 — official references: Income Tax Department e-filing portal (taxpayer services and its own calculator for cross-checking) and incometaxindia.gov.in (CBDT acts, rules, and circulars). Slab-change update note: rates here are re-verified after every Union Budget (February) and Finance Act passage; the 87A rebate and slab structure shown took effect FY 2025-26 and continue for FY 2026-27. Last verified: June 2026.
How is income tax calculated in India for FY 2025-26?
India taxes individuals under two parallel regimes, and you choose whichever yields lower tax each year. New regime (default): taxable income = gross income − ₹75,000 standard deduction (salaried); tax applies slab-wise at 0% up to ₹4L, then 5/10/15/20/25% in ₹4L bands, and 30% above ₹24L — with the Section 87A rebate wiping the tax to zero when taxable income is ₹12 lakh or less. Old regime: ₹50,000 standard deduction plus your claimed deductions (80C, 80D, HRA, home-loan interest), slabs of 5% (₹2.5–5L), 20% (₹5–10L), 30% (above ₹10L), and the 87A rebate up to ₹5L taxable. Both regimes add 4% health & education cess, and surcharge applies above ₹50 lakh total income.
India income tax slabs FY 2025-26: new vs old regime
| New Regime (default) | Rate | Old Regime | Rate |
|---|---|---|---|
| Up to ₹4,00,000 | 0% | Up to ₹2,50,000 | 0% |
| ₹4–8 lakh | 5% | ₹2.5–5 lakh | 5% |
| ₹8–12 lakh | 10% | ₹5–10 lakh | 20% |
| ₹12–16 lakh | 15% | Above ₹10 lakh | 30% |
| ₹16–20 lakh | 20% | Senior (60–79): exemption ₹3L Super senior (80+): exemption ₹5L 87A rebate: zero tax ≤ ₹5L taxable | |
| ₹20–24 lakh | 25% | ||
| Above ₹24 lakh | 30% | ||
Both regimes add 4% health & education cess on the tax. Standard deduction: ₹75,000 (new) vs ₹50,000 (old) for salaried taxpayers. The headline FY 2025-26 change: the new-regime 87A rebate makes tax zero up to ₹12 lakh taxable income — ₹12.75 lakh gross salary after standard deduction.
Worked examples: tax at common salary levels (new regime)
| Gross Salary | Taxable (after ₹75k SD) | Tax + Cess | Effective Rate |
|---|---|---|---|
| ₹10,00,000 | ₹9,25,000 | ₹0 (87A rebate) | 0% |
| ₹12,75,000 | ₹12,00,000 | ₹0 (87A rebate) | 0% |
| ₹15,00,000 | ₹14,25,000 | ₹93,750 + cess = ₹97,500 | 6.5% |
| ₹20,00,000 | ₹19,25,000 | ₹1,85,000 + cess = ₹1,92,400 | 9.6% |
| ₹30,00,000 | ₹29,25,000 | ₹4,57,500 + cess = ₹4,75,800 | 15.9% |
Note the jump past ₹12.75L gross: marginal relief under 87A ensures the extra tax never exceeds the income above the threshold, so earning more always nets more.
When does the old regime still win?
The old regime survives for heavy deducters. Break-even intuition at ₹20L gross: new regime owes ₹1.92L; the old regime matches it only when deductions (beyond the standard ₹50k) reach roughly ₹7.1 lakh — a stack of 80C (₹1.5L) + NPS 80CCD(1B) (₹50k) + 80D (₹75k) + home-loan interest 24(b) (₹2L) totals ₹4.75L, which is not enough on its own at this income; it typically takes a large home-loan interest claim or substantial HRA exemption layered on top to close the gap. Renters claiming large HRA exemptions can tip the balance. Below ₹13L gross, the new regime is almost always unbeatable because 87A already zeroes the tax. Salaried taxpayers without business income can switch regimes every year at filing — run both numbers here each April.
What this calculator includes and excludes
Included: FY 2025-26 slabs for both regimes, standard deductions (₹75k/₹50k for salary income), Section 87A rebates, senior-citizen exemption limits (old regime), and 4% cess. Not modelled: surcharge on total income above ₹50 lakh (10–37%, with marginal relief), capital-gains taxed at special rates (covered conceptually in our investment returns guide), agricultural income aggregation, and TDS timing. For incomes above ₹50L or complex cases, treat results as a baseline and consult a CA — see the disclaimer below.
Frequently asked questions
What is the zero-tax limit for FY 2025-26?
Under the new regime, the Section 87A rebate makes tax zero when taxable income is up to ₹12 lakh — that is ₹12.75 lakh gross salary after the ₹75,000 standard deduction. In the old regime, the rebate applies up to ₹5 lakh taxable income.
Which regime is better: new or old?
The new regime wins for most taxpayers after the FY 2025-26 slab cuts, especially below ₹13 lakh gross where tax is zero anyway. The old regime wins only when deductions are large — roughly ₹5.5–8 lakh+ of combined 80C, NPS, 80D, HRA, and home-loan interest, with the higher end needed at higher incomes.
Can I switch between regimes every year?
Salaried taxpayers without business income can choose either regime each year at filing time. Taxpayers with business income can switch out of the new regime only once in a lifetime (Form 10-IEA).
What is the standard deduction for FY 2025-26?
₹75,000 in the new regime and ₹50,000 in the old regime, available against salary and pension income automatically — no proofs needed.
Is there surcharge on high incomes?
Yes — above ₹50 lakh total income, surcharge applies: 10% (₹50L–1Cr), 15% (₹1–2Cr), 25% above ₹2Cr in the new regime. Marginal relief prevents the surcharge from exceeding the income above each threshold.
How is cess calculated?
A 4% Health & Education Cess applies on the income tax (plus surcharge if any) in both regimes. Example: tax of ₹1,85,000 becomes ₹1,92,400 after cess — already included in this calculator's results.
Related calculators
📋 Tax disclaimer: This calculator provides estimates based on published rates and rules for FY 2025-26 and is not tax, legal, or investment advice. Tax outcomes depend on your complete circumstances — consult a chartered accountant or registered tax practitioner before filing. Sources: Income Tax Act, CBDT/CBIC notifications — see methodology.
Sources & References
- Income Tax Department — FY 2025-26 Slabs — New regime slabs, Section 87A rebate (≤₹12L taxable → zero tax), 4% cess
- CBDT — Finance Act 2025 Provisions — ₹75,000 standard deduction (new regime), ₹50,000 (old regime), surcharge thresholds