Income Tax Calculator

Old Regime vs New Regime: The Complete Comparison

India's income tax system gives salaried individuals a choice between two regimes for FY 2026-27. The Old Tax Regime allows a wide range of deductions (80C, 80D, HRA, home loan interest, LTA) and has three slabs (5%, 20%, 30%). The New Tax Regime (the default regime since FY 2023-24, and significantly overhauled by Budget 2025) now has seven slabs (5%, 10%, 15%, 20%, 25%, 30%) starting from a ₹4 lakh exemption, plus a ₹75,000 standard deduction — but no other exemptions or deductions.

The critical question is: do your deductions under the old regime outweigh the benefit of lower slabs and the wider zero-tax band under the new regime? This calculator does the math instantly for both regimes and highlights which one results in lower tax for your specific situation. Use our HRA Calculator to first compute your HRA exemption, then bring that figure here for a complete old-regime calculation.

Income Tax Slabs for FY 2026-27

New Regime Slabs: ₹0–4L = 0%; ₹4–8L = 5%; ₹8–12L = 10%; ₹12–16L = 15%; ₹16–20L = 20%; ₹20–24L = 25%; Above ₹24L = 30%. With the enhanced 87A rebate, taxable income up to ₹12 lakh is fully tax-free. This means gross salary income up to approximately ₹12.75 lakh (after the ₹75,000 standard deduction) results in zero tax under the new regime — a dramatic jump from the ₹7.75 lakh threshold that applied before Budget 2025.

Old Regime Slabs: ₹0–2.5L = 0% (₹3L for seniors, ₹5L for super seniors); ₹2.5–5L = 5%; ₹5–10L = 20%; Above ₹10L = 30%. With the 87A rebate, income up to ₹5 lakh taxable is tax-free. These old regime numbers have stayed frozen for several budget cycles now, while the new regime has been revised twice — which is itself a signal of where government policy is steering taxpayers. A 4% Health & Education Cess applies on the computed tax in both regimes.

Who Benefits from the Old Tax Regime?

• Employees with maximum 80C investments — ₹1.5 lakh in PF, PPF, ELSS, or LIC
• Employees in metro cities paying high rent — significant HRA exemption under Section 10(13A)
• Homeowners with active home loans — interest deduction up to ₹2 lakh under Section 24(b)
• People with high medical insurance premiums — 80D deduction up to ₹75,000 for senior parents
• Employees with NPS contribution — additional ₹50,000 under 80CCD(1B) over and above 80C

As a rough rule of thumb post-Budget 2025: below ₹12.75 lakh gross salary, the new regime almost always wins outright since tax is zero either way once deductions are factored in for most old-regime filers, and the new regime needs no paperwork to get there. Above that level, if total deductions + exemptions exceed roughly ₹4-4.5 lakh, the old regime starts to compete or win for most income levels.

Who Benefits from the New Tax Regime?

The new regime benefits employees who have minimal deductions — those who do not invest heavily in tax-saving instruments, do not have a home loan, and live in company-provided or owned accommodation (no HRA claim). It is also dramatically better for income below ₹12.75 lakh gross (after ₹75,000 standard deduction, taxable income = ₹12L, which is fully rebated under 87A — resulting in zero tax) — a threshold that used to be ₹7.75 lakh before Budget 2025 widened it.

For high earners above ₹24 lakh, the new regime's 30% slab starts at ₹24 lakh vs the old regime's 30% starting at ₹10 lakh — making the new regime more favorable even without deductions at very high income levels, since a much larger share of income sits in the lower brackets first. Explore our CTC Calculator to understand how your total compensation breaks down.

The 87A Rebate Explained

Section 87A provides a complete rebate on income tax if your net taxable income is within specified limits. Under the New Regime: if taxable income (after ₹75,000 standard deduction) is ≤ ₹12 lakh, entire tax is zero, via a rebate of up to ₹60,000 — enhanced from ₹25,000/₹7 lakh in Budget 2025. Under the Old Regime: if taxable income (after all deductions) is ≤ ₹5 lakh, entire tax is zero. The rebate means your income can be above these thresholds at the gross level and still result in zero tax after deductions bring it below the ceiling.

One nuance worth knowing: the 87A rebate is a cliff, not a gradual phase-out below ₹12 lakh, but just above it there is marginal relief so tax doesn't jump sharply — someone earning ₹12,10,000 taxable doesn't suddenly owe tax on the full amount at slab rates; the increase is capped at the amount their income exceeds ₹12 lakh by. For a full breakdown of both regimes' slabs with worked examples, see our income tax slabs guide.

Worked Example: A ₹15 Lakh Salary Under Both Regimes

Consider a salaried employee earning ₹15,00,000 gross, with ₹1,50,000 in 80C investments, ₹25,000 in 80D health insurance, and ₹1,80,000 in HRA exemption. Under the new regime: taxable income = 15,00,000 − 75,000 (standard deduction) = ₹14,25,000. Tax = (8,00,000 × 5%) + (4,00,000 × 10%) + (2,25,000 × 15%) = 40,000 + 40,000 + 33,750 = ₹1,13,750, plus 4% cess = ₹1,18,300.

Under the old regime: total deductions = 50,000 (standard) + 1,50,000 (80C) + 25,000 (80D) + 1,80,000 (HRA) = ₹4,05,000. Taxable income = 15,00,000 − 4,05,000 = ₹10,95,000. Tax = (2,50,000 × 5%) + (5,00,000 × 20%) + (95,000 × 30%) = 12,500 + 1,00,000 + 28,500 = ₹1,41,000, plus 4% cess = ₹1,46,640. In this case the new regime still wins by roughly ₹28,000, even with substantial old-regime deductions — a direct result of how much the FY 2026-27 new-regime slabs widened the low-tax bands.

Why Privacy Matters for Tax Calculations

Income and deduction details are highly sensitive. This income tax calculator runs entirely in your browser — no data is sent to any server, no salary figures are stored, and no cookies track your inputs. You can safely enter your actual income, HRA, and deduction figures without concern. The comparison updates in real time as you adjust sliders — no form submission required.

Common Tax Planning Mistakes to Avoid

• Choosing old regime without adding up deductions: Many people default to old regime but don't actually have enough deductions to benefit
• Forgetting the ₹50,000 NPS bonus: Section 80CCD(1B) gives ₹50,000 extra over 80C — the only way to exceed the ₹1.5L 80C ceiling
• Not declaring HRA to employer: If you pay rent, calculate your HRA exemption and declare it — your employer will otherwise deduct full TDS on HRA
• Ignoring surcharge at ₹50L+: This calculator handles incomes up to ₹1 crore — surcharge adds 10%+ for incomes above ₹50 lakh
• Missing the January 31 employer deadline: Investment declarations must reach your employer by January to avoid excess TDS in February-March

Limitations of This Income Tax Calculator

This calculator handles standard salaried income scenarios. It does not cover: capital gains tax (STCG/LTCG from stocks, mutual funds, or property); business or professional income; rental income from property; agricultural income; surcharge calculation for income above ₹50 lakh; or advance tax payment timelines. For complex tax situations with multiple income sources, consult a Chartered Accountant or use the official Income Tax e-filing portal for the exact computation.