Income Tax Calculator FY 2026-27

How income tax is calculated in FY 2026-27

India gives you a choice of two tax regimes. The new regime (the default) has lower slab rates but almost no deductions; the old regime keeps higher rates but lets you claim deductions like Section 80C, 80D, HRA and home-loan interest. Budget 2026 made no changes to the slabs, so FY 2026-27 (AY 2027-28) uses the same structure introduced for FY 2025-26. Your tax is worked out by applying the slab rates to your taxable income, subtracting the Section 87A rebate, adding any surcharge, and finally adding a 4% health & education cess on the total.

New regime slabs (FY 2025-26 & FY 2026-27)

• Up to ₹4,00,000 — Nil
• ₹4,00,001 – ₹8,00,000 — 5%
• ₹8,00,001 – ₹12,00,000 — 10%
• ₹12,00,001 – ₹16,00,000 — 15%
• ₹16,00,001 – ₹20,00,000 — 20%
• ₹20,00,001 – ₹24,00,000 — 25%
• Above ₹24,00,000 — 30%

Tax payable by income under the new regime

The table below shows what a salaried taxpayer pays under the new regime after the ₹75,000 standard deduction, the 87A rebate and 4% cess. These are the exact figures this calculator produces.

Notice how the effective rate stays well below the headline slab rate — even a ₹50 lakh earner pays about 22% of gross salary, not 30%, because the lower slabs and standard deduction apply to everyone before the top rate bites.

Old regime slabs and deductions

• Up to ₹2,50,000 — Nil
• ₹2,50,001 – ₹5,00,000 — 5%
• ₹5,00,001 – ₹10,00,000 — 20%
• Above ₹10,00,000 — 30%

The old regime allows the ₹50,000 standard deduction plus deductions such as 80C (₹1.5L — EPF, PPF, ELSS, life insurance), 80D (health insurance), HRA exemption, home-loan interest (Section 24b) and NPS (80CCD-1B, an extra ₹50,000). It also keeps the 87A rebate of ₹12,500 for taxable income up to ₹5 lakh.

Senior-citizen exemption under the old regime

The old regime gives older taxpayers a bigger tax-free slab. A senior citizen aged 60 to 79 pays no tax on the first ₹3,00,000 of income, and a super-senior citizen of 80 or more is exempt up to ₹5,00,000 — against ₹2,50,000 for everyone under 60. Set your age group above and the calculator applies the correct old-regime slabs automatically. The new regime does not vary with age: the ₹4 lakh basic exemption and the ₹12 lakh rebate are the same whether you are 25 or 85, which is one reason many pensioners still find the old regime worth checking. Note that the higher exemption is only a starting slab — a senior with a large pension or rental income is taxed on the rest exactly as anyone else, so the benefit is largest for those with modest incomes.

Worked example: ₹15 lakh salary, both regimes

Take a salaried person earning ₹15,00,000 a year with ₹2,00,000 of old-regime deductions (the full ₹1.5 lakh under 80C plus ₹50,000 of 80D and other claims):

• New regime: taxable income ₹14,25,000. Slab tax = ₹20,000 (5% band) + ₹40,000 (10% band) + ₹33,750 (15% band) = ₹93,750. Add 4% cess → ₹97,500.
• Old regime: taxable income ₹15,00,000 − ₹50,000 − ₹2,00,000 = ₹12,50,000. Slab tax = ₹12,500 + ₹1,00,000 + ₹75,000 = ₹1,87,500. Add 4% cess → ₹1,95,000.

The new regime is cheaper by ₹97,500 here. For the old regime to break even at this salary you would need roughly ₹5.4 lakh of deductions — a full 80C, the extra NPS claim, and a substantial home-loan interest or metro HRA on top.

Old vs new: where is the break-even?

A quick rule of thumb: if your total old-regime deductions (excluding the standard deduction) are less than about ₹4–4.5 lakh, the new regime almost always wins. Because the 2025 slabs are so generous, the exact break-even actually rises with income. The deduction levels below are roughly what the old regime needs just to match the new regime.

In practice only taxpayers with a fully-loaded old regime — maximum 80C, the ₹50,000 NPS top-up, ₹25,000-plus health cover and a large Section 24b home-loan interest claim — tend to beat the new regime. This calculator does the exact comparison for your numbers, including surcharge, marginal relief and cess. For a deeper walkthrough read our guide on the new vs old tax regime for FY 2026-27.

Deductions the new regime still allows

The new regime strips out most exemptions, but a few genuinely useful ones survive:

• Standard deduction of ₹75,000 for salaried employees and pensioners.
• Employer NPS contribution under Section 80CCD(2) — up to 14% of basic salary, still fully deductible in the new regime and often worth structuring your CTC around. See the NPS calculator to size it.
• Family pension deduction and certain gratuity and retirement exemptions.

Common claims that are not allowed in the new regime include 80C, 80D, HRA exemption, LTA and self-occupied home-loan interest.

Surcharge on high incomes

Above ₹50 lakh of taxable income a surcharge is added on the tax itself (before cess). The tiers are:

The new regime caps surcharge at 25%; only the old regime charges 37% above ₹5 crore. Marginal relief ensures that crossing a surcharge threshold — or the ₹12 lakh rebate limit — never costs you more extra tax than the extra income earned, and this calculator applies it automatically.

A note on special-rate income and TDS

The slab rates and the 87A rebate apply only to your normal income — salary, interest, rent and business profits. Income taxed at special rates, such as short-term capital gains on equity (20%) and long-term capital gains (12.5% above the exempt threshold), is charged separately and is not covered by the ₹12 lakh rebate. So a taxpayer with a ₹10 lakh salary and ₹3 lakh of equity gains still pays tax on those gains even though the salary itself is rebate-free.

Remember too that the figure this calculator shows is your annual liability, not an extra payment. Your employer already deducts TDS every month against it, so at filing you usually owe only the small balance — or claim a refund if too much was withheld. Use the monthly in-hand figure above to sanity-check your payslip and plan your cash flow for the year.