About the India Old vs New Tax Regime
This calculator compares your income tax under India’s old and new tax regimes for FY 2026-27 (tax year 2026-27 under the Income-tax Act, 2025) and tells you which one leaves you with more money. The Finance Bill 2026 left both sets of slabs unchanged, so the results also hold for FY 2025-26 (AY 2026-27). Enter your gross salary or income and the deductions you can actually claim — Section 80C investments, 80D health insurance, HRA exemption, home loan interest, 80CCD(1B) NPS and others — and it computes tax, surcharge (with marginal relief) and 4% cess under both regimes. Section numbers such as 80C follow the 1961 Act, which the 2025 Act renumbers without changing these limits.
The new regime (the default) has wider slabs from 5% to 30%, a ₹75,000 standard deduction and a Section 87A rebate that makes taxable income up to ₹12 lakh tax-free, with marginal relief just above that level. It allows almost no other deductions except employer NPS contributions under 80CCD(2). The old regime has higher slab rates but lets you subtract the full list of deductions, with a ₹50,000 standard deduction and a rebate up to ₹5 lakh of taxable income.
The calculator also shows the break-even amount of deductions: if you can claim more than that under the old regime, it wins. Salaried employees can choose a regime every year when filing their return; people with business income can switch back to the old regime only once.
With the default inputs, the tax saved with the better regime is ₹105,300.00. Change any value above to recalculate instantly.
How to use the india old vs new tax regime
- 1Enter your gross annual salary or income.
- 2Choose your age group and whether you get the salaried standard deduction.
- 3Enter the deductions you can claim under the old regime (80C, 80D, HRA, home loan, NPS).
- 4Add any employer NPS contribution, which counts in both regimes.
- 5Compare the two tax figures and check the break-even deduction amount.
Formula and method
New regime slabs for FY 2026-27 (unchanged from FY 2025-26): nil up to ₹4 lakh, 5% to ₹8 lakh, 10% to ₹12 lakh, 15% to ₹16 lakh, 20% to ₹20 lakh, 25% to ₹24 lakh and 30% above. The Section 87A rebate removes all tax when taxable income is ₹12 lakh or less, and marginal relief caps the tax at the income above ₹12 lakh just past that point. Surcharge is 10% above ₹50 lakh, 15% above ₹1 crore and capped at 25% above ₹2 crore.
Old regime slabs: nil up to ₹2.5 lakh (₹3 lakh for seniors, ₹5 lakh for 80+), 5% to ₹5 lakh, 20% to ₹10 lakh and 30% above, with a rebate that zeroes tax at ₹5 lakh or less. Surcharge is 10% above ₹50 lakh, 15% above ₹1 crore, 25% above ₹2 crore and 37% above ₹5 crore. In both regimes marginal relief is applied, so tax plus surcharge never rises by more than the income earned above a surcharge threshold. Both regimes add 4% health and education cess. Special-rate income such as capital gains is not modelled.
- 87A
- Rebate: up to ₹60,000 (new) or ₹12,500 (old)
- cess
- 4% health and education cess on tax + surcharge
Worked examples
₹15 lakh salary with ₹1.75 lakh of deductions
Under the new regime taxable income is ₹14.25 lakh and tax plus cess is ₹97,500. The old regime allows ₹1.75 lakh of deductions, but its higher slabs still produce ₹2,02,800. The new regime saves ₹1,05,300.
₹12.9 lakh salary – marginal relief
Taxable income of ₹12.15 lakh would attract ₹62,250 of slab tax, but marginal relief limits it to the ₹15,000 earned above ₹12 lakh. With 4% cess the new-regime tax is ₹15,600.
₹25 lakh salary with heavy deductions
Even with ₹7.5 lakh of deductions the old-regime tax (₹3,35,400) is higher than the new-regime tax of ₹3,19,800 on ₹24.25 lakh, so the new regime still wins by ₹15,600.
Frequently asked questions
Which tax regime is better in India?+
The new regime is better for most people after Budget 2025 because income up to ₹12 lakh (₹12.75 lakh for salaried) is tax-free and slabs are wider; Budget 2026 kept these rules for FY 2026-27. The old regime wins only if your deductions are large — usually above ₹5–8 lakh depending on income.
What deductions are allowed in the new regime?+
Only the ₹75,000 standard deduction for salaried people and pensioners, employer NPS contributions under 80CCD(2), family pension deduction and a few others. 80C, 80D, HRA, LTA and self-occupied home loan interest are not allowed.
Is income up to ₹12 lakh tax-free in the new regime?+
Yes. For FY 2025-26 and FY 2026-27 the Section 87A rebate of up to ₹60,000 makes the tax nil when taxable income is ₹12 lakh or less. For salaried employees that means gross salary up to ₹12.75 lakh after the ₹75,000 standard deduction.
Can I switch between the old and new regimes every year?+
Salaried individuals and pensioners without business income can choose either regime every year when filing their return. People with business or professional income can opt out of the new regime and return to it only once.
Is the new tax regime the default?+
Yes. Since FY 2023-24 the new regime is the default. If you want the old regime you must opt for it — with your employer for TDS and in your income tax return (Form 10-IEA if you have business income).
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.