Worked example
The new regime costs ₹87,050 against ₹1,10,660 — ₹23,610 less for tax year 2026-27. The old regime would only match it with about ₹1,13,500 more in deductions.
- Salary for the year
- ₹14,00,000
- Tax to pay, old regime
- ₹1,10,660
- Tax to pay, new regime
- ₹87,050
| Old regime | New regime | |
|---|---|---|
| Total income before deductions | ₹11,52,500 | ₹13,58,000 |
| Deductions | ₹1,83,000 | ₹0 |
| Taxable income | ₹9,69,500 | ₹13,58,000 |
| Tax on the slabs | ₹1,06,400 | ₹83,700 |
| Rebate | ₹0 | ₹0 |
| Cess | ₹4,256 | ₹3,348 |
| Tax to pay | ₹1,10,660 | ₹87,050 |
How to use this calculator
- Your income (middle): your age, yearly salary parts as on your payslip or Form 16, any house you own, interest and other income, and tax already deducted.
- Old regime (blue): the rent you pay and the deductions you can claim.
- New regime (orange): nothing to enter — it allows only a few deductions.
- Read which regime saves more, then the computation sheet. Print it or save it as a PDF.
Filing for FY 2025-26 (AY 2026-27)?
The slabs, rebate, standard deduction and deduction limits for FY 2025-26 under the Income-tax Act, 1961 are the same as those used here, so the tax worked out is the same. Two things differ: the section numbers, and the HRA 50% rate, which for FY 2025-26 applied only in Delhi, Mumbai, Kolkata and Chennai — for Bengaluru, Hyderabad, Pune or Ahmedabad, choose “other city”.
| What | FY 2025-26 (1961 Act) | From 2026-27 (2025 Act) |
|---|---|---|
| PPF, EPF, ELSS, insurance, tuition… | 80C | Section 123 |
| Your own NPS (extra ₹50,000) | 80CCD(1B) | Section 124(3) |
| Employer’s NPS | 80CCD(2) | Section 124 |
| Health insurance | 80D | Section 126 |
| Interest on savings and deposits | 80TTA / 80TTB | Section 153 |
| Home-loan interest | 24(b) | Section 22 |
| Rebate | 87A | Section 156 |
| New regime | 115BAC | Section 202 |
The rates used
New regime (section 202): up to₹4 lakh 0%; ₹4 lakh–₹8 lakh 5%; ₹8 lakh–₹12 lakh 10%; ₹12 lakh–₹16 lakh 15%; ₹16 lakh–₹20 lakh 20%; ₹20 lakh–₹24 lakh 25%; above ₹24 lakh 30%. Standard deduction ₹75,000; rebate up to ₹60,000 when total income is up to ₹12 lakh.
Old regime (Finance Act, 2026, First Schedule, Part I-B): nil up to ₹2.5 lakh (₹3 lakh at 60–79, ₹5 lakh at 80+), then 5%, 20% above ₹5 lakh and 30% above ₹10 lakh. Standard deduction ₹50,000; rebate up to ₹12,500 when total income is up to ₹5 lakh.
Both: surcharge of 10% above ₹50 lakh, 15% above ₹1 crore and 25% above ₹2 crore (37% above ₹5 crore in the old regime), with marginal relief; then a 4% Health and Education Cess on tax plus surcharge (Finance Act, 2026, section 3). Total income and tax are rounded to the nearest ₹10 (section 516).
Sources: Income-tax Act, 2025 as amended by the Finance Act, 2026; Finance Act, 2026 (section 3 and First Schedule); Income-tax Rules, 2026 (rule 279, HRA). Checked 8 October 2026.
Frequently asked questions
Is a salary of ₹12.75 lakh really tax-free?
Yes, in the new regime. A salary of ₹12,75,000 less the ₹75,000 standard deduction leaves ₹12,00,000 of total income; the tax on that is cancelled by the rebate of up to ₹60,000 (section 156), so you pay ₹0. Just above, marginal relief keeps the tax from jumping: on ₹13,25,000 you pay ₹52,000, not the full slab tax.
Old or new regime — which should I choose?
Work it out for your own numbers: the new regime has lower rates, the old one more deductions. For the example on this page: The new regime costs ₹87,050 against ₹1,10,660 — ₹23,610 less for tax year 2026-27. The old regime would only match it with about ₹1,13,500 more in deductions. If you have no business income, you can choose afresh every year when you file your return (section 202(4)(b)).
How is the HRA exemption worked out?
It is the least of: the HRA you receive; the rent you pay less 10% of your basic pay and DA; and 50% of basic pay and DA in Mumbai, Kolkata, Delhi, Chennai, Hyderabad, Pune, Ahmedabad, Bengaluru, or 40% elsewhere (Schedule III, Sl. No. 11 and rule 279 of the Income-tax Rules, 2026). In the example, that comes to ₹2,28,000. It is available only in the old regime.
Where have sections 80C, 80D and 87A gone?
The Income-tax Act, 2025 renumbered them from tax year 2026-27: 80C is now section 123 (with the list in Schedule XV), 80CCD is section 124, 80D is section 126, 80TTA and 80TTB are section 153, the 87A rebate is section 156, the new regime (115BAC) is section 202, and home-loan interest (24(b)) is section 22. The limits used here are the ones in the new Act.
How are capital gains on shares and mutual funds taxed?
Shares and equity funds held 12 months or less: 20% (section 196). Held longer: 12.5% on gains above ₹1,25,000 a year (section 198). Other assets held more than 24 months — gold, property, unlisted shares — 12.5% without indexation (section 197). Debt funds bought from 1 April 2023 are taxed at your slab rate whatever the holding period (section 76). With ₹9,00,000 of other income, ₹2,25,000 of long-term equity gains cost ₹13,000 in the new regime.
Does the ₹12 lakh rebate cover capital gains?
No. In the new regime the rebate can only cancel tax at slab rates (section 156(3)), so tax on gains at special rates is still payable. With ₹9,00,000 of other income and ₹2,00,000 of short-term equity gains, total income is ₹11,00,000 — under ₹12 lakh — yet the tax is ₹41,600: the slab-rate tax is rebated, the 20% on the gains is not. Any unused basic exemption is set against the gains first.
What does this calculator not cover?
Capital losses and losses carried forward, the indexation choice for land or buildings bought before 23 July 2024 (section 197(3)), any special surcharge rate on capital gains for incomes above ₹50 lakh (the normal surcharge is applied), business or professional income, the value of perks such as a company car, relief for old salary paid late, agricultural income and income of non-residents. It covers one house. Home-loan interest on a home you live in is capped at ₹2,00,000 in the old regime. Check your final figures with Form 16, Form 26AS/AIS and, if in doubt, a tax adviser.