Income tax calculator: old vs new regime
Put in your salary and what you invest, and I’ll show you the tax under both regimes, side by side, and which one leaves you more.
Before any deductions; leave out employer PF and gratuity.
Interest, rent, freelance: a year’s total.
Age changes the old regime’s tax-free limit only.
Enter only the allowed amount (up to 14% of basic in the new regime, 10% in the old).
Capped at ₹1,50,000.
Capped at ₹1,00,000 in all.
Work it out with the HRA calculator.
Capped at ₹2,00,000.
Capped at ₹50,000.
The new regime saves you
₹1,05,300
New regime ₹97,500 · Old regime ₹2,02,800 a year
New regime
- Income
- ₹15,00,000
- Deductions
- ₹75,000
- Taxable income
- ₹14,25,000
- Tax on slabs
- ₹93,750
- Rebate (87A)
- ₹0
- Surcharge
- ₹0
- Cess (4%)
- ₹3,750
- Total tax
- ₹97,500
- Monthly TDS
- ₹8,125
Old regime
- Income
- ₹15,00,000
- Deductions
- ₹2,25,000
- Taxable income
- ₹12,75,000
- Tax on slabs
- ₹1,95,000
- Rebate (87A)
- ₹0
- Surcharge
- ₹0
- Cess (4%)
- ₹7,800
- Total tax
- ₹2,02,800
- Monthly TDS
- ₹16,900
Rules for tax year 2026-27, reported unchanged from FY 2025-26. Check after each Budget.
Estimates for planning, not tax or legal advice. Rules change with each Budget and differ by employer, so check your offer letter, payslip or a professional before you act.
How it’s calculated
The formula
Tax = slab tax − rebate (87A) + surcharge
Total = Tax + 4% health and education cess
Worked example
A salary of ₹15,00,000 and nothing else. In the new regime the standard deduction is ₹75,000, so taxable income is ₹14,25,000. Slab tax is ₹20,000 (4–8L at 5%) + ₹40,000 (8–12L at 10%) + ₹33,750 (₹2,25,000 at 15%) = ₹93,750. Add 4% cess and the total is ₹97,500, or ₹8,125 a month.
In the old regime the standard deduction is ₹50,000, so taxable income is ₹14,50,000 before investments. Slab tax is ₹12,500 + ₹1,00,000 + ₹1,35,000 = ₹2,47,500, and with cess ₹2,57,400. The new regime is ₹1,59,900 cheaper unless deductions close the gap.
The rules
- New regime slabs: up to ₹4L nil, 4–8L 5%, 8–12L 10%, 12–16L 15%, 16–20L 20%, 20–24L 25%, above ₹24L 30%. Standard deduction ₹75,000.
- New regime rebate: no tax if taxable income is ₹12,00,000 or less (rebate up to ₹60,000). Just above ₹12L, marginal relief means tax can’t be more than the income above ₹12L.
- Old regime slabs: up to ₹2.5L nil, 2.5–5L 5%, 5–10L 20%, above ₹10L 30%. The tax-free limit is ₹3L at 60–79 and ₹5L at 80+. Standard deduction ₹50,000; rebate up to ₹12,500 if taxable income is ₹5L or less.
- Old-regime deductions used here: 80C up to ₹1,50,000, 80D up to ₹1,00,000 in all, exempt HRA, home-loan interest under 24(b) up to ₹2,00,000, your own NPS under 80CCD(1B) up to ₹50,000. Employer NPS under 80CCD(2) counts in both regimes.
- Surcharge: 10% above ₹50L, 15% above ₹1Cr, 25% above ₹2Cr, 37% above ₹5Cr (old regime only; the new regime stops at 25%), with marginal relief at each step.
- Cess: 4% on tax plus surcharge.
- Section numbers here (87A, 80C, 80D, 24(b), 80CCD) are from the Income-tax Act 1961. The Income-tax Act, 2025 applies from tax year 2026-27 and renumbers these sections.
Sources
- Income Tax Department e-filing portal (incometax.gov.in): slabs, regimes and its own tax calculator
- Income Tax Department (incometaxindia.gov.in): the Act, rules and Budget notifications
Questions people ask
Which regime is better for me?
It depends on your deductions. With few deductions, the new regime almost always costs less. The old regime can win if you claim a lot: full 80C, health insurance, HRA on high rent and home-loan interest together. Put your numbers in and the calculator shows the difference.
Is income up to ₹12 lakh really tax-free?
In the new regime, yes, if your taxable income is ₹12,00,000 or less, the 87A rebate cancels the tax. For a salaried person that means a salary up to ₹12,75,000, because the ₹75,000 standard deduction comes off first. Income taxed at special rates, like some capital gains, doesn’t get this rebate.
What is marginal relief?
Without it, earning ₹10,000 above ₹12 lakh would cost you over ₹60,000 in tax. Marginal relief caps the tax at the amount you earn above the limit, so you never take home less for earning a little more. The same idea applies when you cross a surcharge threshold.
Can I switch regimes every year?
If your income is from salary, you can choose each year when you file your return. If you have business income, switching back to the old regime is allowed only once. Tell your employer your choice early so TDS matches it.
Why is my monthly TDS different from this?
Employers estimate TDS from your declared investments and spread it over the months left in the year. Bonuses, a mid-year job change or late proof submission all shift it. The yearly total here is what you owe; your Form 16 and return settle the difference.
Does this use the new Income-tax Act?
The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026 and calls the year a ‘tax year’. Section numbers like 80C have new numbers under it, but I use the familiar names here because that’s what payslips and declarations still say. The rates are the ones reported for tax year 2026-27.
Numbers done. Now the decision.
Tell me what the numbers mean for you, and I’ll help you decide what to do next.