What is an Income Tax Calculator?
India currently runs two parallel income tax regimes. The new regime has lower slab rates and a standard deduction of ₹75,000, but doesn’t allow most other deductions (80C, 80D, HRA exemption, home loan interest, and so on) — and it’s the default regime unless you actively opt for the old one. The old regime has higher slab rates but lets you claim those deductions, which can make it cheaper if you have a large enough deduction base.
This calculator covers ordinary salary, interest, rental and other slab-rate income for individual taxpayers, comparing both regimes side by side — including surcharge and marginal relief for higher incomes, and separate slabs for senior and super-senior citizens under the old regime. It doesn’t cover capital gains, lottery or game-show winnings, or other income taxed at special rates — see the limitations note in the results.
How the comparison is calculated
Under the new regime, taxable income up to ₹12 lakh can attract zero tax after the applicable rebate, and marginal relief prevents a cliff-edge jump just above that threshold. The old regime’s rebate applies only up to ₹5 lakh, with no such smoothing. Above ₹50 lakh, both regimes add a surcharge on the tax itself (not on income) — 10–37% depending on income and regime — and marginal relief separately smooths each surcharge threshold, so crossing a boundary by a small amount never costs more in extra tax than the extra income itself.
Enter your income and, for the old regime, your actual deductions — the comparison updates as you type. For the official slabs, forms and filing rules, the Income Tax Department’s own site is the source of record.
"Tax Year" vs "Assessment Year" — which applies to you
The Income-tax Act, 2025 (effective 1 April 2026) replaces the old "Previous Year" and "Assessment Year" system with a single unified "Tax Year" — income earned in Tax Year 2026-27 (1 April 2026 to 31 March 2027) is now referred to by that one label, instead of "FY 2026-27" for earning it and "AY 2027-28" for filing it a year later. Importantly, this is a terminology and structural change only — the Act does not itself alter slab rates, which remain exactly as set by Budget 2025.
If you’re filing a return right now for income earned before 1 April 2026, you’re still working under the old 1961 Act and should use "Assessment Year 2026-27" (for FY 2025-26 income) — the slabs are identical to what this calculator shows, only the label differs. Use the toggle above to match whichever term applies to your situation.
Worked example: how large a deduction it actually takes to beat the new regime
At ₹15,00,000 gross income, the new regime’s tax is roughly ₹97,500. To beat that under the old regime, ₹2,00,000 of deductions still leaves you owing roughly ₹1,95,000 (worse than new). Even ₹3,50,000 of deductions — a maxed-out ₹1.5 lakh savings deduction (section 123 under the 2025 Act; commonly known as 80C) plus ₹2 lakh of home loan interest, a genuinely large deduction base — only brings old-regime tax down to roughly ₹1,48,200, still more than the new regime’s ₹97,500. It takes roughly ₹7,00,000 in total deductions before the old regime actually wins at this income level.
At higher incomes the gap is wider still: at ₹20,00,000 gross, even ₹7,00,000 of deductions only brings old-regime tax to roughly ₹1,95,000, still short of beating the new regime’s ₹1,92,400. In practice, for most salaried taxpayers, the new regime wins unless you have an unusually large deduction base — typically driven by a substantial home loan interest claim on top of a fully-used 80C.
Surcharge and marginal relief on high incomes
Once taxable income crosses ₹50 lakh, both regimes add a surcharge calculated on the tax itself: 10% above ₹50L, 15% above ₹1Cr, 25% above ₹2Cr, and — only under the old regime — 37% above ₹5Cr (the new regime caps surcharge at 25% regardless of how high income goes beyond ₹5Cr, which is why very high earners often save considerably more under the new regime). Each threshold has its own marginal relief: earn ₹1 rupee over ₹50 lakh, and relief ensures your tax rises by roughly ₹1, not by a full 10% surcharge on your entire tax bill.
Senior and super-senior citizens under the old regime
The old regime gives a higher tax-free threshold by age: ₹2.5 lakh below 60, ₹3 lakh for seniors (60–80), and ₹5 lakh for super-seniors (80+) — slab rates above those thresholds are otherwise identical. The new regime does not vary by age at all; every taxpayer uses the same slabs and the same ₹12 lakh effective rebate threshold, regardless of age. This is one of the few situations where age alone can meaningfully tilt the comparison toward the old regime, particularly for retirees with limited other deductions.
Frequently asked questions
Which regime is the default now?
The new tax regime is the default — you have to actively opt for the old regime (via Form 10-IEA, for those with business income, or simply by choosing it while filing, for salaried individuals) if you want to use it instead.
How much deduction do I need for the old regime to win?
More than most people expect — often ₹6–7 lakh or more in total deductions, depending on income level. See the worked example above for exact figures.
Is this the same as TDS on my salary?
This shows your annual tax liability. For the monthly amount your employer would deduct from each pay cheque, see the TDS Calculator.
Does this include surcharge and cess?
Yes — both are included, with full marginal relief on each surcharge threshold, not just a flat percentage add-on.
Does this cover capital gains or lottery winnings?
No — those and other special-rate income are taxed under separate rules (a flat rate rather than your slab rate) and are outside this calculator’s scope. Adding such income here would produce a misleading result, so it’s deliberately excluded rather than silently taxed at your slab rate.
Does the new regime allow any deductions at all?
Very few compared to the old regime — mainly the ₹75,000 standard deduction (for salaried/pensioners) and employer’s NPS contribution under 80CCD(2). Popular deductions like 80C, 80D, and HRA exemption are not available under the new regime.
Is "Tax Year 2026-27" the same as "AY 2026-27"?
No — they cover different income. AY 2026-27 refers to income earned in FY 2025-26 (before 1 April 2026), assessed under the old 1961 Act. Tax Year 2026-27 refers to income earned from 1 April 2026 onward, under the new Income-tax Act, 2025. The slabs happen to be identical, but the periods and the applicable Act are different — use the toggle above to select the one that matches your situation.
How does the calculator handle the two health-insurance deduction buckets?
The calculator has separate fields for self/spouse/dependent children and for parents, so the two limits are not incorrectly merged. Each bucket is capped independently at ₹25,000, rising to ₹50,000 where the relevant covered person is a senior citizen. For Tax Year 2026-27 under the Income-tax Act, 2025, the corresponding provision is section 126; the familiar legacy reference is section 80D. These deductions are relevant to the old-regime computation, not the new concessional regime.