Income Tax Calculator FY 2026-27
Compare your tax liability under the Old and New regimes side by side. We apply Budget 2025 slabs, Section 87A rebate, the standard deduction, and 4% health & education cess.
Tax Details
Enter your annual income and eligible deductions.
₹12,00,000.00
₹0.00
Employment Type
Age Group
₹1,50,000.00
₹25,00,000.00
₹0.00
Deduction Summary (Old Regime)
Standard Deduction
of ₹50,000
Sec 80C Investments
of ₹1,50,000
Sec 80D Health Insurance
of ₹25,000
Visual Analysis
Compare tax slabs and rates.
Annual Tax Payable
Old Regime Tax
₹1,11,800
New Regime Tax
₹0
Financial Intelligence
PreviewCurated Strategy Templates
AI Insight
Based on your declarations, the New Regime is highly optimal, saving you ₹1,11,800 annually in taxes. Your effective tax rate stands at 0.0%.
What This Means
Choosing the correct tax regime is the most immediate way to increase your monthly savings rate. The Old Regime is lucrative only if you can stack deductions (Standard, 80C, 80D, HRA) beyond ₹3.75 Lakhs.
Action Plan
- ✓If opting for the Old Regime, fully exhaust your Section 80C limit (up to ₹1.5L in ELSS/PPF) and Section 80D (health insurance).
- ✓Invest an additional ₹50,000 in Section 80CCD(1B) NPS to claim extra tax deductions, saving up to ₹15,000 in the 30% slab.
- ✓Submit house rent receipts and declaration forms to your employer early in the year to prevent high TDS deductions.
Suggested Next Step
Find Tax Savings Opportunities →Income Tax Calculator — New Regime vs Old Regime, Explained Simply
Every April, millions of salaried Indians face the same question: which tax regime should I choose this year? It sounds like a technical decision but it comes down to one calculation — do your deductions and exemptions save you more tax than the lower rates of the new regime?
This calculator does that comparison for you instantly. But before you enter your numbers, understanding how the two regimes actually work will help you interpret the result correctly.
The New Tax Regime: Default from FY 2023-24 Onwards
The new tax regime is the default regime from FY 2023-24 onwards. If you do not actively choose a regime, this is what applies to you automatically
Under the new regime, income up to ₹4 lakh is tax-free. From ₹4–8 lakh the rate is 5%, from ₹8–12 lakh it is 10%, from ₹12–16 lakh it is 15%, from ₹16–20 lakh it is 20%, from ₹20–24 lakh it is 25%, and income above ₹24 lakh is taxed at 30%
The key benefit: under the new regime, individuals with taxable income up to ₹12 lakh pay zero income tax due to the rebate under Section 87A. For salaried taxpayers, after factoring in the standard deduction of ₹75,000, the tax-free income ceiling effectively extends to ₹12.75 lakh
This is a significant threshold. If your gross salary is ₹12.75 lakh or below, the new regime almost certainly works in your favour — you pay no tax at all.
The Old Tax Regime: Still Worth It If You Have Large Deductions
The old regime has higher slab rates but allows a wide range of deductions that can substantially reduce your taxable income. The most common ones are:
Section 80C — up to ₹1.5 lakh for PPF, ELSS, life insurance premiums, home loan principal, and children's tuition fees. Section 80D — up to ₹25,000 for health insurance premiums, extendable to ₹50,000 for senior citizen parents. HRA exemption — significant for salaried employees paying rent in metro cities. Home loan interest — up to ₹2 lakh deduction under Section 24(b) for self-occupied property.
If you are actively investing in PPF and ELSS, paying home loan EMIs, and claiming HRA, your total deductions can easily reach ₹3–4 lakh. At that level, the old regime can save meaningful tax for incomes above ₹15 lakh.
A Practical Comparison at Common Income Levels
At ₹10 lakh annual income, the new regime wins clearly — zero tax due to the ₹12 lakh rebate threshold, versus a non-trivial liability under the old regime even after standard deductions.
At ₹15 lakh annual income, the comparison tightens. Under the new regime, tax liability is approximately ₹1.05 lakh after standard deduction. Under the old regime with ₹3.5 lakh in deductions — PPF, health insurance, HRA — taxable income drops to ₹11.5 lakh, resulting in roughly ₹1.25 lakh in tax. New regime still wins here for most people.
At ₹20 lakh and above, the old regime can start winning if you have substantial deductions — particularly home loan interest and maximum 80C investments. The crossover point varies by individual; use this calculator to find yours.
The New Income Tax Act 2025: What Changes from April 2026
From 1 April 2026, the Income Tax Act 2025 replaces the Income Tax Act 1961. Slab rates remain unchanged, but section numbers have been renumbered — Section 80C is now Section 123, Section 80D is now Section 124. The benefits remain the same, only the reference numbers change. If you file your FY 2025-26 return in 2026, you still reference the old section numbers. New section numbers apply from FY 2026-27 onwards
Which Regime Should You Choose?
The new regime is the right default for most salaried individuals — especially those earning below ₹15 lakh, those early in their careers without large loan liabilities, and those who prefer simplicity over optimisation.
The old regime is worth evaluating if you have a home loan with significant interest payments, maximum 80C investments, and HRA claims — typically making sense at incomes of ₹15 lakh and above with total deductions exceeding ₹3.75 lakh.
Enter your income and deductions in FinBuddy's Income Tax Calculator to see the exact tax liability under both regimes side by side.
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Tax FAQ
Income Tax — Common Questions
The New Tax Regime offers lower tax rates and wider income slabs but requires you to forfeit most common tax deductions (like HRA, 80C, 80D, and LTA). The Old Regime has higher tax rates but allows you to reduce your taxable income significantly using those deductions. For FY 2026-27, the New Regime is the default option for all taxpayers.
For FY 2026-27, if your taxable income is up to ₹12,00,000, you pay zero tax under the New Regime thanks to the Section 87A rebate. For salaried employees, a ₹75,000 standard deduction is available, which means a gross salary of up to ₹12,75,000 becomes entirely tax-free without needing any other investments.
Yes, if you are a salaried individual with no business or professional income, you can switch between the Old and New regimes every financial year when filing your ITR. However, if you have business or professional income, you are allowed to switch back to the Old regime only once in your lifetime.
You should choose the Old Regime only if your total eligible deductions are substantial. As a general rule for FY 2026-27, if your gross salary is ₹15,00,000 and you can claim deductions (80C, 80D, HRA, Home Loan Interest) exceeding ₹4,25,000, the Old Regime will save you more tax. Below this deduction threshold, the New Regime is more beneficial.
For FY 2026-27, salaried employees and pensioners get a standard deduction of ₹75,000 under the New Regime and ₹50,000 under the Old Regime. It is a flat reduction from your gross salary requiring no investment proofs or bills. The higher ₹75,000 deduction applies only to the New Regime.
Marginal Relief ensures that if your income slightly exceeds the tax-free limit of ₹12,00,000 (New Regime), your tax liability does not exceed the amount of income earned above that limit. For example, if your taxable income is ₹12,10,000, the calculated tax might be roughly ₹50,000, but Marginal Relief kicks in to restrict your final tax payable to just ₹10,000 plus cess.
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