Income Tax Calculator India — Old vs New Regime
Calculate your income tax liability for FY 2026-27 (AY 2026-27) under both the Old and New Tax Regimes. This calculator compares your tax under both systems side by side, showing you exactly how much you save and which regime is more beneficial for your specific income and deductions. Includes Section 87A rebate, 4% health and education cess, and all applicable slab rates.
How Income Tax Calculator India — Old vs New Regime Works
Calculate your income tax under both old and new tax regimes for FY 2026-27. Compare and choose the better option instantly. Enter your values into the form above and the calculator processes them instantly in your browser — no data is sent to any server.
Understanding Income Tax Regimes in India
India currently offers two tax regimes for individual taxpayers. The Old Tax Regime has been in place for decades and allows taxpayers to claim a wide range of deductions and exemptions under Sections 80C, 80D, 80E, 24(b), HRA exemption, LTA, and many others. These deductions can significantly reduce your taxable income, especially if you have home loans, health insurance, children in school, or make investments in PPF, ELSS, or NPS. The trade-off is higher tax slab rates starting at 5 percent on income above 2.5 lakh and going up to 30 percent on income above 10 lakh.
The New Tax Regime, introduced in Budget 2020 and made the default regime from FY 2023-24, offers significantly lower slab rates with a wider range of brackets. However, it removes most deductions and exemptions. From FY 2026-27, the new regime offers a standard deduction of 75,000 rupees and tax slabs ranging from 5 percent (3-7 lakh) to 30 percent (above 15 lakh). The Section 87A rebate under the new regime makes income up to 7 lakh effectively tax-free. The key decision every taxpayer must make each year is which regime results in a lower tax liability given their specific financial situation.
Income Tax Calculation Formulas
Old Regime Taxable Income: Gross Income − Standard Deduction (₹50,000) − 80C − HRA Exemption − Other Deductions
New Regime Taxable Income: Gross Income − Standard Deduction (₹75,000)
Tax Liability: Sum of (Income in Each Slab × Slab Rate)
Total Tax: Tax Liability + 4% Health & Education Cess
Old Regime Slabs (FY 2026-27):
- Up to ₹2,50,000 — Nil
- ₹2,50,001 to ₹5,00,000 — 5%
- ₹5,00,001 to ₹10,00,000 — 20%
- Above ₹10,00,000 — 30%
New Regime Slabs (FY 2026-27):
- Up to ₹3,00,000 — Nil
- ₹3,00,001 to ₹7,00,000 — 5%
- ₹7,00,001 to ₹10,00,000 — 10%
- ₹10,00,001 to ₹12,00,000 — 15%
- ₹12,00,001 to ₹15,00,000 — 20%
- Above ₹15,00,000 — 30%
Section 87A Rebate Explained
Section 87A provides a tax rebate for resident individuals with lower incomes. Under the Old Tax Regime, if your total taxable income does not exceed 5 lakh rupees, you are eligible for a rebate of up to 12,500 rupees, effectively making your tax zero. Under the New Tax Regime for FY 2026-27, the rebate threshold has been increased to 7 lakh rupees. If your taxable income under the new regime is 7 lakh or less, the rebate eliminates your entire tax liability. This makes the new regime particularly attractive for individuals earning up to 7 lakh per year, as they pay zero income tax with just the standard deduction.
Which Tax Regime Should You Choose?
The choice depends entirely on the total deductions you can claim. If your combined deductions under the old regime (80C, 80D, HRA exemption, home loan interest under 24b, NPS under 80CCD, and others) are significant, the old regime may save you more tax despite the higher slab rates. As a general guideline, if your total deductions exceed approximately 3.75 lakh rupees for incomes around 10-15 lakh, the old regime is often more beneficial. For higher incomes above 15-20 lakh, the breakeven point for deductions is even higher. Salaried employees should factor in the standard deduction difference (50,000 in old vs 75,000 in new) and the HRA exemption, which can be substantial for those paying high rent in metro cities. This calculator does the comparison for you, so you can see the exact tax difference without manual computation.
Example Calculation
Income of ₹12,00,000 with ₹1,50,000 in 80C Deductions
Comparing both regimes for an income of 12 LPA with standard deductions.
- Old Regime: Taxable = ₹12,00,000 − ₹50,000 − ₹1,50,000 = ₹10,00,000. Tax = ₹1,12,500 + 4% cess = ₹1,17,000
- New Regime: Taxable = ₹12,00,000 − ₹75,000 = ₹11,25,000. Tax = ₹20,000 + ₹30,000 + ₹18,750 = ₹68,750 + 4% cess = ₹71,500
- Savings with New Regime: ₹1,17,000 − ₹71,500 = ₹45,500
Frequently Asked Questions
What is the difference between old and new tax regime in India?
The Old Tax Regime allows you to claim various deductions and exemptions like Section 80C (up to Rs 1.5 lakh for PPF, ELSS, LIC), Section 80D (health insurance), HRA exemption, home loan interest under Section 24(b), and NPS contributions under 80CCD. It has three main slab rates: 5%, 20%, and 30%. The New Tax Regime offers lower and more granular slab rates (5% to 30% across six brackets) but removes nearly all deductions except the standard deduction of Rs 75,000. The new regime is the default from FY 2023-24, but salaried employees can switch each year.
What is Section 87A rebate and who qualifies?
Section 87A provides a tax rebate for resident individuals with lower taxable incomes. Under the Old Regime, if your taxable income is Rs 5 lakh or less, you get a rebate of up to Rs 12,500, making your tax nil. Under the New Regime for FY 2026-27, the rebate threshold is Rs 7 lakh, meaning if your taxable income is Rs 7 lakh or less after the standard deduction, your entire tax liability is rebated to zero. This is why incomes up to approximately Rs 7.75 lakh (after Rs 75,000 standard deduction) are effectively tax-free under the new regime.
Can I switch between old and new tax regime every year?
Yes, salaried employees can choose between the old and new tax regime every financial year. You inform your employer about your choice at the beginning of the year for TDS purposes, and you can finalize your choice when filing your income tax return. However, individuals with business or professional income can switch from the new regime to the old regime only once in their lifetime. After switching back to old, they cannot return to the new regime again. This restriction does not apply to salaried individuals without business income.
What is the standard deduction for FY 2026-27?
For FY 2026-27, the standard deduction is Rs 50,000 under the Old Tax Regime and Rs 75,000 under the New Tax Regime. The standard deduction was increased from Rs 50,000 to Rs 75,000 for the new regime in Budget 2024. This is a flat deduction available to all salaried employees and pensioners, requiring no proof of expenditure. It reduces your gross salary before tax slab calculations are applied. Under the old regime, the standard deduction is in addition to other deductions you claim.
How is health and education cess calculated?
Health and Education Cess is levied at 4% on the total income tax amount (after applying rebates but before adding cess). For example, if your computed tax is Rs 1,00,000, the cess would be Rs 4,000, making your total tax Rs 1,04,000. The cess applies equally under both old and new tax regimes. It was introduced to fund health and education initiatives and replaced the earlier 3% education cess. The cess is calculated on the base tax amount and any applicable surcharge, but for most taxpayers with income below Rs 50 lakh, surcharge does not apply.