Income tax calculator: old vs new regime

The 2026-27 slabs at a glance

From 1 April 2026 India’s income tax runs under the Income-tax Act, 2025, which replaced the 1961 Act. The year is now simply called the tax year (here, 2026-27) instead of “previous year” and “assessment year”. The rates themselves did not change: the Finance Bill 2026 kept the slabs already in the Act.

New regime (the default, section 202)

• Up to ₹4 lakh: nil
• ₹4–8 lakh: 5% · ₹8–12 lakh: 10% · ₹12–16 lakh: 15%
• ₹16–20 lakh: 20% · ₹20–24 lakh: 25% · above ₹24 lakh: 30%

A resident whose taxable income is ₹12 lakh or less gets a rebate of up to ₹60,000, which wipes out the tax. With the ₹75,000 standard deduction, that means a salary of up to ₹12.75 lakh pays no tax at all. Just above ₹12 lakh, marginal relief makes sure the tax is never more than the income above ₹12 lakh — so earning ₹10,000 more never costs you more than ₹10,000 in tax. At a taxable income of ₹12,10,000, for example, the slabs give ₹61,500, but marginal relief cuts it to ₹10,000 (₹10,400 with cess).

Old regime (if you opt out, section 202(4))

• Up to ₹2.5 lakh: nil (₹3 lakh for residents aged 60–79; ₹5 lakh for 80 and above)
• ₹2.5–5 lakh: 5% · ₹5–10 lakh: 20% · above ₹10 lakh: 30%
• Rebate of up to ₹12,500 if taxable income is ₹5 lakh or less (residents)

The old regime’s attraction is its deductions — HRA, the ₹1.5 lakh investment limit, health insurance, home-loan interest and more. Its standard deduction is ₹50,000.

Which regime should you pick?

Do the sum both ways — that is exactly what the calculator above does. As a rough guide, the old regime only wins if your deductions are large: for most salaries, you need several lakh of deductions (HRA plus a full ₹1.5 lakh of investments plus home-loan interest) before the old regime’s lower slabs and deductions beat the new regime’s wider slabs and bigger rebate. Salaried people can switch regime every year when they file; people with business income have fewer chances to switch, so check before you do.

A worked example

The calculator starts with a salary of ₹15 lakh and ₹20,000 of bank interest. Under the new regime, taxable income is ₹15,20,000 − ₹75,000 = ₹14,45,000. Tax is ₹20,000 (4–8 lakh) + ₹40,000 (8–12 lakh) + ₹36,750 (15% of ₹2,45,000) = ₹96,750, plus 4% cess = ₹1,00,620. Under the old regime the deductions shown (HRA ₹1.2 lakh, professional tax, ₹1.5 lakh investments, ₹25,000 health insurance) and the ₹50,000 standard deduction bring taxable income down to ₹11,72,500 — but the old slabs are steeper, so the tax is ₹1,64,250 plus cess = ₹1,70,820. Here the new regime saves ₹70,200. Change the figures to your own.

For NRIs working in the Gulf

Salary earned and received abroad by a non-resident is generally not taxed in India. What is taxed is income that arises in India — interest on an NRO account, rent from a house in Kerala, and so on. (Interest on NRE accounts is exempt.) Two things are different for a non-resident: there is no rebate, even if income is below ₹12 lakh, and there is no higher exemption for senior citizens. Choose “Non-resident” above to see this. Whether you are resident depends mainly on the days you spend in India — check the rules before you file.

What this calculator does not cover

• Capital gains and other income taxed at special rates (shares, mutual funds, property sales).
• Agricultural income, which can change the rate on your other income.
• Employer’s NPS contribution, family pension, gratuity or leave encashment rules.
• Tax already deducted (TDS) — compare the total here with your Form 16 or Form 26AS to see what is still due.

Learn the basics

Income tax is a fixture of commerce syllabi and careers. If you are a student, see our professional course guides for CA, CMA and ACCA, where tax is a core paper, and the free Excel course to build your own tax sheet.