Income tax calculator FY 2026-27
Calculate your income tax under India's new and old tax regimes for FY 2026–27. See a slab-wise breakdown for both regimes side-by-side.
How is Income Tax calculated in India?
India's income tax system for FY 2026-27 (AY 2027-28) offers two regimes. The new regime — the default since 2023 — has lower slab rates but allows only the standard deduction (₹75,000 for salaried) and a few specific exemptions. The old regime has higher rates but lets you claim 80C, 80D, HRA, home-loan interest, LTA, and many other deductions. Budget 2026 left all slabs, rebate thresholds, and surcharge tiers unchanged — the rate structure carries forward from FY 2025-26.
A 4% health and education cess applies on top of the calculated tax in both regimes. A surcharge kicks in on taxable income above ₹50 lakh, stepping up at ₹1 crore and ₹2 crore. Under the new regime, the maximum surcharge is capped at 25%; the old regime can go up to 37% above ₹5 crore.
"We are not compelling anybody. Those who want to remain in the old regime can still remain there. But the new one is attractive because it gives a greater rebate."
How the calculation works
The calculator applies slab rates on taxable income (gross minus deductions), then: adds surcharge if taxable income exceeds ₹50 lakh, subtracts 87A rebate if eligible, and finally adds 4% health & education cess on (tax + surcharge). Rebate marginal relief ensures that crossing the ₹12 lakh threshold in the new regime doesn't suddenly jump your tax by more than the excess.
Important caps and defaults
Standard deduction is ₹75,000 in the new regime and ₹50,000 in the old regime (salaried only). Under 87A, the full rebate applies to taxable income up to ₹12 lakh in the new regime and ₹5 lakh in the old regime. Section caps: 80C — ₹1.5 lakh; 80D — ₹1 lakh (self + senior parents combined); self-occupied home-loan interest under 24(b) — ₹2 lakh. HRA exemption has no statutory rupee cap, but it can't exceed 50% of gross income (the worst case: metro city with basic salary = gross).
Old Tax Regime vs New Tax Regime: FY 2026-27 Comparison
Tax slabs and key deductions under both regimes for FY 2026-27. Surcharge and 4% cess apply on top of slab tax.
| Income Slab | Old Regime | New Regime Default |
|---|---|---|
| Up to ₹2,50,000 | Nil | Nil |
| ₹2,50,001 – ₹4,00,000 | 5% | Nil |
| ₹4,00,001 – ₹5,00,000 | 5% | 5% |
| ₹5,00,001 – ₹8,00,000 | 20% | 5% |
| ₹8,00,001 – ₹10,00,000 | 20% | 10% |
| ₹10,00,001 – ₹12,00,000 | 30% | 10% |
| ₹12,00,001 – ₹16,00,000 | 30% | 15% |
| ₹16,00,001 – ₹20,00,000 | 30% | 20% |
| ₹20,00,001 – ₹24,00,000 | 30% | 25% |
| Above ₹24,00,000 | 30% | 30% |
| Feature | Old Regime | New Regime Default |
|---|---|---|
| Standard deduction | ₹50,000 | ₹75,000 |
| Section 80C deductions | Allowed (up to ₹1.5L) | Not available |
| HRA exemption | Available | Not available |
| Section 87A rebate | Up to ₹12,500 (income ≤ ₹5L) | Up to ₹60,000 (income ≤ ₹12L) |
| Best for | Those with ₹2L+ in deductions | Salaried with fewer deductions |
New regime is now the default. Switch to old regime only if your eligible deductions exceed ₹3.75L.
Common Uses
- Old vs. New Regime comparison: Calculate tax liability under both regimes to determine which results in lower tax based on your deductions and exemptions.
- Advance tax planning: Estimate annual tax liability early to plan quarterly advance tax payments and avoid interest under Section 234B/234C.
- Salary structure optimisation: HR and employees restructure CTC components (HRA, LTA, NPS) to minimise taxable income under the Old Regime.
- Form 16 cross-verification: Recalculate tax from Form 16 figures to confirm the employer deducted the correct TDS before filing your ITR.
- Investment planning (80C): Determine how much more you can invest in ELSS, PPF, or life insurance to exhaust the ₹1.5 lakh 80C limit.
- Business income tax estimation: Freelancers and sole proprietors estimate annual tax on professional income to set aside provisions throughout the year.
- Capital gains planning: Factor in expected equity or property capital gains to project total taxable income and plan asset sales accordingly.
- Retirement income taxation: Pensioners and senior citizens calculate tax on pension, interest income, and withdrawals to optimise post-retirement cash flow.
FAQ
Which regime should I pick — new or old?
For most salaried taxpayers with limited investments, the new regime is cheaper — its ₹75,000 standard deduction and full rebate up to ₹12L taxable income means zero tax on salary up to ₹12.75L. The old regime only wins if your 80C, 80D, HRA, and home-loan interest deductions add up to a large amount (typically ₹3L+).
What is the tax-free salary limit in FY 2026-27?
Under the new regime in FY 2026-27, salaried individuals pay zero tax on income up to ₹12.75 lakh thanks to the ₹75,000 standard deduction plus full 87A rebate on taxable income up to ₹12 lakh. Non-salaried individuals get zero tax up to ₹12 lakh. These thresholds are unchanged from FY 2025-26.
What's the difference between cess and surcharge?
Cess is charged at 4% on (tax + surcharge) and funds health and education programs. Surcharge is an extra percentage on the tax amount itself, applied when taxable income crosses ₹50 lakh (10%), ₹1 crore (15%), ₹2 crore (25%), or ₹5 crore (37% — old regime only). Cess applies to everyone; surcharge only at higher incomes.
Can I switch regimes when filing?
Yes. Even if your employer deducted TDS based on a specific regime, you can pick the other regime when filing your return. Non-salaried taxpayers can switch between regimes year to year; salaried individuals with business income have more restrictions after opting out of the new regime once.
Does the income tax calculator store my financial data?
No. All calculations run entirely in your browser. Your income details are never sent to a server or stored after you close the page.
Which tax regime should I choose — new or old?
The new regime has lower slab rates but no deductions. The old regime has higher slabs but allows 80C, HRA, and other deductions. This calculator compares both so you can pick whichever saves more tax for your profile.
By the Numbers
- India recorded over 93 million ITR filings in FY 2022-23, a historic high (CBDT)
- Approximately 72% of taxpayers opted for the New Tax Regime in FY 2023-24 (Ministry of Finance)
- Total direct tax collection reached ₹19.58 lakh crore in FY 2023-24, exceeding the Revised Estimate
- The New Tax Regime provides a tax rebate under Section 87A for incomes up to ₹7 lakh