Old vs New Tax Regime Calculator (FY 2025-26 and FY 2026-27)
Compare your income tax under India’s old vs new tax regime. Enter your salary and deductions to see which regime gives lower tax, by how much, and the breakeven deduction. Includes the Section 87A rebate with marginal relief, surcharge and 4% cess. The slabs are the same for FY 2025-26 (AY 2026-27) and FY 2026-27.
Old vs new tax regime is the choice Indian individual taxpayers make each year between two ways of computing income tax. The old regime has higher slab rates but allows deductions such as 80C, 80D and HRA. The new regime, the default since AY 2024-25, has lower rates and a ₹75,000 standard deduction but almost no deductions.
Old vs New Tax Regime: Slabs and Rules Compared
The rates below are for individuals under 60 for FY 2025-26 (AY 2026-27), from the Income Tax Department. Budget 2026 did not change them: the Finance Bill 2026 memorandum says there is no change in tax rates for tax year 2026-27, so the same slabs apply to FY 2026-27.
| Old regime | New regime | |
|---|---|---|
| Nil slab | Up to ₹2,50,000 | Up to ₹4,00,000 |
| 5% | ₹2,50,001 – ₹5,00,000 | ₹4,00,001 – ₹8,00,000 |
| 10% | — | ₹8,00,001 – ₹12,00,000 |
| 15% | — | ₹12,00,001 – ₹16,00,000 |
| 20% | ₹5,00,001 – ₹10,00,000 | ₹16,00,001 – ₹20,00,000 |
| 25% | — | ₹20,00,001 – ₹24,00,000 |
| 30% | Above ₹10,00,000 | Above ₹24,00,000 |
| Standard deduction (salary) | ₹50,000 | ₹75,000 |
| Section 87A rebate | Up to ₹12,500 if taxable income is ₹5,00,000 or less | Up to ₹60,000 if taxable income is ₹12,00,000 or less |
| 80C, 80D, HRA, home loan interest on a self-occupied home | Allowed | Not allowed |
| Highest surcharge rate | 37% (income above ₹5 crore) | 25% (income above ₹2 crore) |
| Health and education cess | 4% of tax plus surcharge | 4% of tax plus surcharge |
Surcharge is 10% of tax above ₹50 lakh of income and 15% above ₹1 crore in both regimes. Senior citizens have a higher nil slab under the old regime, which this calculator does not model.
Worked Example: Tax at ₹12.85 Lakh and ₹15 Lakh
These two cases match what the calculator above returns. The first shows marginal relief just past the ₹12 lakh rebate limit; the second is the “Load Example” preset with ₹3,45,000 of deductions (80C ₹1,50,000, 80D ₹25,000, HRA ₹1,20,000, other ₹50,000).
| Step | Salary ₹12,85,000, no deductions | Salary ₹15,00,000, ₹3,45,000 deductions |
|---|---|---|
| New regime taxable income | ₹12,10,000 | ₹14,25,000 |
| New regime slab tax | ₹61,500 | ₹93,750 |
| Marginal relief (87A) | Tax limited to ₹10,000, the income above ₹12,00,000 | Not applicable |
| New regime tax with 4% cess | ₹10,400 | ₹97,500 |
| Old regime taxable income | ₹12,35,000 | ₹11,05,000 |
| Old regime tax with 4% cess | ₹1,90,320 | ₹1,49,760 |
| Better regime | New, by ₹1,79,920 | New, by ₹52,260 |
Marginal relief means that when taxable income is slightly above ₹12,00,000, the tax cannot be more than the amount by which income exceeds ₹12,00,000. It runs out at a taxable income of about ₹12,70,588 (roughly ₹13,45,588 of salary), where the normal slab tax equals the excess. The rule comes from the first proviso to section 87A as amended by the Finance Act 2025 (Finance Bill 2025 memorandum); the rebate is not available on income taxed at special rates such as capital gains.
Breakeven Deductions: When the Old Regime Wins
The old regime only wins when your deductions are large enough to offset its higher rates. The table shows the breakeven computed with this calculator for a salaried individual under 60: the total of 80C, 80D, HRA and other deductions, on top of the ₹50,000 standard deduction, at which both regimes give the same tax.
| Gross salary | New regime tax | Old regime tax with no deductions | Deductions needed for old regime to match |
|---|---|---|---|
| ₹10,00,000 | ₹0 | ₹1,06,600 | ₹4,50,000 |
| ₹12,75,000 | ₹0 | ₹1,87,200 | ₹7,25,000 |
| ₹15,00,000 | ₹97,500 | ₹2,57,400 | About ₹5,43,750 |
| ₹20,00,000 | ₹1,92,400 | ₹4,13,400 | About ₹7,08,333 |
| ₹25,00,000 and above (up to ₹50 lakh) | ₹3,19,800 at ₹25 lakh | ₹5,69,400 at ₹25 lakh | About ₹8,00,000 |
For salaries up to ₹12.75 lakh the new regime tax is zero, so the old regime can only tie, and only if deductions bring old-regime taxable income down to ₹5,00,000. Between about ₹25 lakh and ₹50 lakh the breakeven is a flat ₹8 lakh of deductions.
How the Old vs New Tax Regime Calculator Works
Enter gross annual salary, then the old-regime deductions you can actually claim: Section 80C (maximum ₹1,50,000), Section 80D health insurance, HRA exemption and any other deductions such as home loan interest under Section 24(b) or NPS under 80CCD(1B). The calculator subtracts the standard deduction in each regime, applies the slabs, the Section 87A rebate and marginal relief, surcharge with its own marginal relief above ₹50 lakh, and 4% cess, then shows both totals, the saving and your breakeven deduction. It assumes a resident individual below 60 with salary income and no income taxed at special rates.
Switching Between Regimes
If you have no business or professional income, you can choose the regime every year directly in your return, provided it is filed by the due date under section 139(1). With business or professional income the choice is restricted: to leave the default new regime you file Form 10-IEA by the due date, and according to the Income Tax Department FAQ you then have only one chance to switch back to the new regime, after which you cannot choose the old regime again.
Last updated: October 2026 · Rates checked against incometax.gov.in (AY 2026-27) and the Finance Bill 2026 memorandum (tax year 2026-27). An estimate, not tax advice.
Frequently Asked Questions
What are the new tax regime slabs for FY 2025-26?
Under the new tax regime for FY 2025-26 (AY 2026-27), income up to ₹4,00,000 is tax-free, ₹4,00,001 to ₹8,00,000 is taxed at 5%, ₹8,00,001 to ₹12,00,000 at 10%, ₹12,00,001 to ₹16,00,000 at 15%, ₹16,00,001 to ₹20,00,000 at 20%, ₹20,00,001 to ₹24,00,000 at 25%, and above ₹24,00,000 at 30%. A standard deduction of ₹75,000 is available for salaried taxpayers, and the Section 87A rebate makes taxable income up to ₹12,00,000 tax-free. Budget 2026 left these rates unchanged for FY 2026-27.
What deductions are allowed under the old tax regime?
The old tax regime allows deductions under Section 80C (up to ₹1,50,000 for PPF, ELSS, LIC, EPF, NSC, tuition fees), Section 80D (health insurance up to ₹25,000, or ₹50,000 if a senior citizen is covered, with a separate limit for parents), HRA exemption for salaried employees paying rent, Section 80E for education loan interest, Section 80G for donations, Section 24(b) for home loan interest up to ₹2,00,000 on a self-occupied home, and NPS contributions under 80CCD(1B) up to ₹50,000. A standard deduction of ₹50,000 also applies.
Can salaried employees switch between old and new regime every year?
Yes. A taxpayer with no business or professional income can choose between the old and new tax regime every year, directly in the income tax return, as long as the return is filed by the due date under section 139(1). Taxpayers with business or professional income must file Form 10-IEA to opt out of the default new regime. According to the Income Tax Department, once they opt out they have only one chance to switch back to the new regime, and after switching back they cannot choose the old regime again.
What is the breakeven deduction amount?
The breakeven deduction amount is the total deduction level at which the old tax regime produces the same tax as the new tax regime. If your actual deductions (80C + 80D + HRA + others) exceed this breakeven point, the old regime saves you more. If your deductions are below this amount, the new regime is better. This calculator computes the breakeven for your income.
How is the Section 87A rebate applied in FY 2025-26?
Under the new regime, a resident individual whose taxable income (after the ₹75,000 standard deduction) is ₹12,00,000 or less gets a Section 87A rebate of up to ₹60,000, which brings the tax to zero. Salaried individuals earning up to ₹12,75,000 therefore pay no tax under the new regime. Just above ₹12,00,000, marginal relief limits the tax to the amount by which taxable income exceeds ₹12,00,000. Under the old regime, a rebate of up to ₹12,500 applies if taxable income is ₹5,00,000 or less. The rebate does not apply to income taxed at special rates such as capital gains.
Does this calculator include health and education cess?
Yes. The calculator adds 4% health and education cess on income tax plus surcharge in both regimes. For example, if your tax before cess is ₹1,00,000, the cess adds ₹4,000, making the total ₹1,04,000. It also adds surcharge when income is above ₹50 lakh: 10% up to ₹1 crore, 15% up to ₹2 crore and 25% above that, with 37% above ₹5 crore in the old regime only.
Is the new tax regime the default for FY 2025-26?
Yes. The new tax regime has been the default since FY 2023-24 (AY 2024-25). If you do not opt for the old regime when filing your return by the due date, the new regime applies automatically. Salaried employees should tell their employer early in the financial year which regime they want, so that TDS is deducted correctly, and can make the final choice when filing the return.
Which is better, old or new tax regime?
It depends on your deductions. For salaries up to ₹12,75,000 the new regime tax is zero, so it is at least as good as the old regime. Above that, the old regime gives lower tax only if your deductions beyond the standard deduction are large: about ₹5,43,750 at a salary of ₹15,00,000, about ₹7,08,333 at ₹20,00,000 and about ₹8,00,000 from ₹25,00,000 to ₹50,00,000. If you cannot reach those figures with 80C, 80D, HRA, home loan interest and NPS, the new regime is better.
What is marginal relief under the new tax regime?
Marginal relief stops a small rise in income above ₹12,00,000 from triggering a much larger tax bill. When taxable income is slightly above ₹12,00,000, the tax payable cannot exceed the amount by which income exceeds ₹12,00,000. For example, at a taxable income of ₹12,10,000 the slab tax would be ₹61,500, but marginal relief limits it to ₹10,000, plus 4% cess. The relief ends at a taxable income of about ₹12,70,588, where the slab tax equals the excess.