In short
India has two income tax regimes. The new regime has lower rates and almost no deductions; the old regime has higher rates but lets you deduct investments, insurance, rent and home-loan interest. This calculator works out your tax for FY 2026-27 (1 April 2026 to 31 March 2027) under both, including the rebate, surcharge and the 4% cess, and shows which is cheaper.
New regime rates for FY 2026-27
No tax up to ₹4 lakh, then 5% up to ₹8 lakh, 10% up to ₹12 lakh, 15% up to ₹16 lakh, 20% up to ₹20 lakh, 25% up to ₹24 lakh and 30% above that. Each rate applies only to the part of your income inside that band.
Salaried people and pensioners get a standard deduction of ₹75,000. If your taxable income is ₹12 lakh or less, a rebate cancels the whole tax, so a salary of up to ₹12.75 lakh pays nothing. Just above ₹12 lakh the tax cannot be more than the income above ₹12 lakh.
The new regime is the default. The rates are the same for every age.
Old regime rates
Under 60: no tax up to ₹2.5 lakh, 5% up to ₹5 lakh, 20% up to ₹10 lakh and 30% above. From 60 to 79 the first ₹3 lakh is free, and from 80 the first ₹5 lakh.
The standard deduction is ₹50,000, and a rebate cancels the tax when taxable income is ₹5 lakh or less. On top of that you can deduct what the old regime allows: investments such as PPF, EPF and ELSS (up to ₹1.5 lakh), health insurance, the exempt part of your HRA, interest on a home loan and more.
Worked example
A salary of ₹15,00,000 with ₹2,00,000 of deductions. New regime: taxable income is ₹14,25,000, the tax is ₹93,750 and with 4% cess you pay ₹97,500. Old regime: taxable income is ₹12,50,000, the tax is ₹1,87,500 and with cess ₹1,95,000. The new regime saves ₹97,500.
At this salary the old regime only wins when your deductions pass about ₹5.44 lakh. At ₹25 lakh the break-even is about ₹8 lakh of deductions. Try your own figures above.
Surcharge and cess
A 4% health and education cess is added to the tax in both regimes. Above ₹50 lakh of taxable income a surcharge is added first: 10% up to ₹1 crore, 15% up to ₹2 crore and 25% above that. The old regime has a further 37% rate above ₹5 crore.
When your income is just above one of these thresholds, the extra tax and surcharge cannot be more than the income above the threshold. The calculator applies this relief.
Frequently asked questions
Which regime is better for me?
With few deductions the new regime is almost always cheaper, because its rates are lower and no tax is due when taxable income is ₹12 lakh or less. The old regime wins only when your deductions are large, typically a big HRA exemption or home-loan interest together with the full ₹1.5 lakh of investments. Enter your deductions above and the calculator shows the difference.
Can I switch between the regimes every year?
If you only have salary, pension or similar income, yes: you choose each year, and you can still choose differently when you file your return by the due date. People with business or professional income who leave the new regime can return to it only once.
What counts as deductions in the old regime?
The best known are investments and payments of up to ₹1.5 lakh a year (PPF, EPF, ELSS, life insurance, children's tuition, home-loan principal), health insurance premiums, the exempt part of your HRA, up to ₹2 lakh of interest on a loan for the home you live in, and an extra ₹50,000 for NPS. Add them up and enter the total.
Is income up to ₹12 lakh really tax-free?
In the new regime, yes, for residents of India, as long as it is ordinary income such as salary, interest or rent. Income taxed at special rates, such as capital gains on shares, is not covered by the rebate and is taxed separately.
What does the calculator leave out?
Capital gains and other income taxed at special rates, your employer's NPS contribution (deductible in both regimes), losses, family pension (which has a smaller standard deduction), and rules for non-residents. For salary, pension, interest and rent it gives the tax for the year.
Which year is FY 2026-27?
Income earned from 1 April 2026 to 31 March 2027. It is the first year under the Income-tax Act, 2025, which calls it tax year 2026-27. The rates are the same as for FY 2025-26.
Methodology
Taxable income is income minus the standard deduction (₹75,000 new regime, ₹50,000 old regime, for salary or pension) and, in the old regime, your deductions. Tax is worked out band by band. It is nil when taxable income is at most ₹12 lakh (new) or ₹5 lakh (old); in the new regime it is limited to the income above ₹12 lakh. Surcharge of 10%, 15%, 25% (and 37% in the old regime) applies above ₹50 lakh, ₹1 crore, ₹2 crore (and ₹5 crore), with marginal relief at each threshold. Cess of 4% is added and the result is rounded to the rupee (the tax return rounds to the nearest ₹10). For a resident individual.
This calculator gives estimates for information only and is not tax advice. Your actual tax depends on your full income and circumstances; check with the Income Tax Department or a tax adviser before you decide.
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