India Income Tax CalculatorOld Regime vs New Regime — FY 2026–26
Calculate your income tax under both regimes and instantly see which saves you more money. Includes all deductions — Section 80C, 80D, HRA, NPS, home loan interest — plus surcharge, 4% cess, and Section 87A rebate. Accurate Finance Act 2026 rates.
Better regime: New Regime
₹71.5k
Save ₹780 by choosing the New Regime
New Regime tax
₹71.5k
Old Regime tax
₹72.3k
Monthly (better)
₹94.0k
Income details
Total CTC or gross annual income before tax
Age affects old regime tax-free threshold only.
Old regime deductions
Max ₹1,50,000
₹25,000 self; ₹50,000 if parents are senior citizens
Exempt portion of House Rent Allowance
Employer NPS contribution — no upper limit
Max ₹2,00,000 for self-occupied property
Section 80E, 80G, 80TTA, etc.
Showing: New Regime (Section 115BAC)
Tax calculation — FY 2026–26 (AY 2026–27)
Gross income
₹12,00,000
Standard deduction
− ₹75,000
Taxable income
= ₹11,25,000
Income tax (gross)
₹68,750
Net income tax
= ₹68,750
Health & Education Cess (4%)
+ ₹2,750
Total tax liability
= ₹71,500
Annual take-home
₹11,28,500
Effective rate
5.96%
Marginal rate
15%
Monthly take-home
₹94.0k
Income tax slabs FY 2026–26 (AY 2026–27)
India operates two parallel income tax systems that coexist: the New Tax Regime (introduced in FY 2020–21 under Section 115BAC and made the default from FY 2023–24) and the Old Tax Regime with its legacy slabs and comprehensive deduction system. Both regimes use progressive tax rates — higher income is taxed at higher marginal rates — but the slab structure, exemptions, and deductions differ significantly.
| Income slab | Rate |
|---|---|
| ₹0 – ₹3,00,000 | Nil |
| ₹3,00,001 – ₹7,00,000 | 5% |
| ₹7,00,001 – ₹10,00,000 | 10% |
| ₹10,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| ₹15,00,001+ | 30% |
Standard deduction: ₹75,000 (salaried). No other deductions.
| Income slab | Rate |
|---|---|
| ₹0 – ₹2,50,000 ₹3L for 60–80 yrs; ₹5L for 80+ yrs | Nil |
| ₹2,50,001 – ₹5,00,000 Rebate u/s 87A up to ₹12,500 if income ≤ ₹5L | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| ₹10,00,001+ Plus surcharge if applicable | 30% |
Standard deduction: ₹50,000. All major deductions allowed.
Old Regime vs New Regime — which is better for you?
The fundamental trade-off between the two regimes is rates versus deductions. The New Regime offers lower slab rates — particularly in the ₹3 lakh to ₹15 lakh range — but strips away almost all deductions. The Old Regime's higher slab rates can be significantly offset by claiming deductions for investments, insurance, rent, and home loan interest.
The break-even point — where both regimes produce the same tax liability — varies by income level. For a salaried individual earning ₹12 lakh per year, the break-even deduction level is roughly ₹3.5–4 lakh. If your total deductions (including the ₹50,000 standard deduction) are above this figure, the Old Regime is cheaper. Below it, the New Regime wins. At higher incomes of ₹20 lakh+, the break-even deduction level is proportionally larger — meaning the Old Regime needs substantial investments in 80C, HRA, and home loan interest to compete with the lower new regime rates.
Key deductions available under the Old Regime
The Old Regime's advantage comes entirely from the deductions it permits. Here is a comprehensive list of the most commonly used deductions for salaried taxpayers:
| Section | Limit | What qualifies |
|---|---|---|
| Section 80C | ₹1,50,000 | PPF, ELSS, LIC premium, EPF, home loan principal, tuition fees, NSC, SCSS |
| Section 80D | ₹25,000–₹1,00,000 | Health insurance premium (self + family + parents); higher limits for senior citizens |
| HRA Exemption | Least of three formulas | Actual HRA received, 50%/40% of salary, excess rent over 10% of salary |
| Section 24(b) | ₹2,00,000 | Home loan interest for self-occupied property |
| Section 80CCD(2) | No upper cap | Employer's NPS contribution — up to 10% of salary (14% for central govt employees) |
| Section 80E | Full interest paid | Interest on education loan (8 years) |
| Section 80G | 50%–100% of donation | Donations to approved charitable funds |
| Section 80TTA | ₹10,000 | Interest on savings bank account (not applicable for senior citizens — use 80TTB) |
| LTA | Actual fare (2 journeys in 4 years) | Leave Travel Allowance for domestic travel |
| Standard Deduction | ₹50,000 | Flat deduction for salaried employees and pensioners |
New Regime advantages
Budget 2024 and 2026 made the New Regime more attractive in three ways. First, the standard deduction for salaried employees was raised from ₹50,000 to ₹75,000 — reducing the effective taxable income for all salaried taxpayers by an additional ₹25,000. Second, the employer's NPS contribution deduction under Section 80CCD(2) was increased from 10% to 14% of salary for private sector employees (it was already 14% for central government employees). Third, the family pension standard deduction was raised to ₹25,000. These changes mean the New Regime now provides meaningful relief even for employees who would previously have had no reason to choose it.
Surcharge and Health & Education Cess
Beyond the basic slab rates, two additional levies apply. The surcharge is charged on income tax for higher earners: 10% for income between ₹50 lakh and ₹1 crore; 15% for ₹1–2 crore; 25% for ₹2–5 crore. Above ₹5 crore, the Old Regime levies 37% surcharge while the New Regime caps it at 25% — a significant difference that makes the New Regime substantially cheaper for ultra-high-income individuals. Marginal relief provisions prevent the tax from exceeding the incremental income in each band. The Health and Education Cess of 4% is then applied on the combined income tax and surcharge, with no exemptions.
Frequently asked questions
Which is better — Old Regime or New Regime for FY 2026–26?+
What is the Section 87A tax rebate for FY 2026–26?+
What changed in the New Tax Regime after Budget 2026?+
How is surcharge calculated on income tax in India?+
What is Health and Education Cess in India?+
Can I switch between Old and New Tax Regime every year?+
How much can I save under Section 80C?+
How is HRA exemption calculated?+
Disclaimer: This calculator uses income tax slabs and provisions as per the Finance Act 2026 for FY 2026–26 (Assessment Year 2026–27). It is provided for general informational purposes only and does not constitute tax advice. Individual circumstances — including capital gains, agricultural income, special incomes, and state-specific levies — may affect your actual tax liability. For official rates and filing, refer to the Income Tax Department of India at incometax.gov.in or consult a qualified Chartered Accountant.