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Income Tax Calculator (India)

Compare your tax under the new and old regimes for FY 2026-27, with the 87A rebate, surcharge and cess worked out slab by slab.

Updated · By Niraj Kumar · 1 source

How is income tax calculated in India?

Income tax in India is charged slab by slab on taxable income: gross income less the standard deduction and, under the old regime only, deductions such as 80C and 80D. A section 87A rebate cancels the tax on taxable income up to ₹12 lakh under the new regime for FY 2026-27. A 4% health and education cess goes on top.

Taxable income is gross income less the standard deduction for salaried people, and under the old regime less 80C, home loan interest, HRA and other deductions too. That is taxed slab by slab, each rate applying only to the income inside its band. A section 87A rebate wipes out the tax when taxable income is ₹12 lakh or less under the new regime (₹5 lakh under the old). Surcharge applies above ₹50 lakh, and 4% health and education cess goes on top of everything.

tax = (slab tax − 87A rebate + surcharge) × 1.04
New regime slabs
0% to ₹4L, 5% to ₹8L, 10% to ₹12L, 15% to ₹16L, 20% to ₹20L, 25% to ₹24L, 30% above
Old regime slabs
0% to ₹2.5L (₹3L at 60+, ₹5L at 80+), 5% to ₹5L, 20% to ₹10L, 30% above
Standard deduction
₹75,000 new regime, ₹50,000 old, for salary and pension
Surcharge
10% above ₹50L, 15% above ₹1Cr, 25% above ₹2Cr, 37% above ₹5Cr (old regime only)

Worked example

A salaried person under 60 earning ₹15,00,000 a year, with ₹1,50,000 in 80C investments and ₹25,000 of health insurance under 80D.

  1. 1New regime: 15,00,000 − 75,000 standard deduction = ₹14,25,000 taxable
  2. 2Slabs: 5% of 4,00,000 = 20,000; 10% of 4,00,000 = 40,000; 15% of 2,25,000 = 33,750; total ₹93,750
  3. 3Add 4% cess: 93,750 × 1.04 = ₹97,500
  4. 4Old regime: 15,00,000 − 50,000 − 1,50,000 − 25,000 = ₹12,75,000 taxable; tax ₹1,95,000, or ₹2,02,800 with cess

The new regime costs ₹97,500, which is ₹1,05,300 less than the old regime and 6.5% of income.

Frequently asked questions

Which regime is better for me?

Enter your numbers and compare. As a rough guide, the new regime wins unless your old-regime deductions are large, typically ₹4–5 lakh or more between 80C, HRA, home loan interest and 80D. Its lower slabs and the rebate up to ₹12 lakh usually outweigh the deductions you give up.

Is income up to ₹12 lakh really tax-free?

Under the new regime, yes, for ordinary income. The section 87A rebate covers up to ₹60,000 of tax, which is the full tax on ₹12 lakh of taxable income. For a salaried person that means ₹12.75 lakh of salary, after the ₹75,000 standard deduction. Just above ₹12 lakh, marginal relief caps your tax at the amount by which you cross it. The rebate does not cover special-rate income such as capital gains.

Did Budget 2026 change the tax slabs?

No. The slabs, rebate, surcharge and cess introduced by Budget 2025 carry over unchanged to FY 2026-27. That is also the first year under the Income-tax Act, 2025, which renames the assessment year the tax year but keeps the rates.

Can I switch between the regimes?

Salaried people and pensioners can choose afresh every year when they file their return, whatever they told their employer for TDS. With business or professional income, the new regime is the default, and after opting out you can switch back only once.

Sources

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