What is a 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.
Enter your annual gross income and, for a fair comparison, your total eligible deductions under the old regime (80C, 80D, HRA exemption, etc. combined) to see tax payable under each.
How the comparison is calculated
Under the new regime, taxable income up to ₹12 lakh attracts zero tax after the Section 87A rebate, and marginal relief prevents a cliff-edge jump just above that threshold. The old regime’s rebate applies only up to ₹5 lakh taxable income, with no such smoothing.
This excludes surcharge, which applies once taxable income crosses ₹50 lakh, and assumes the "other deductions" figure you enter for the old regime is your complete, correctly-computed deduction total — including things like HRA exemption or home loan interest, which have their own rules (see the HRA Calculator). For the official slabs, forms and filing rules, the Income Tax Department’s own site is the source of record.
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 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 under the current FY 2026-27 slabs, 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.
Who’s most likely to still benefit from the old regime
The clearest case is someone with a large home loan interest deduction (up to ₹2 lakh under Section 24(b)) stacked on top of a maxed-out 80C (₹1.5 lakh), 80D health insurance, and a meaningful HRA exemption — several genuinely large deductions compounding together, not just one. A salaried employee with only 80C maxed out and nothing else rarely clears the bar the worked example above shows. If you’re unsure, the calculator above is the fastest way to check your specific numbers rather than relying on a rule of thumb.
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 under the current slabs — often ₹6–7 lakh or more in total deductions, depending on income level. See the worked example above for exact figures; try your own numbers in the calculator rather than relying on an older rule of thumb, since the gap between regimes has widened with recent rate cuts to the new regime.
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 cess and surcharge?
It includes the standard 4% health and education cess, but not surcharge — which only applies above ₹50 lakh taxable income and follows its own marginal relief rules.
Can I switch between regimes every year?
Salaried individuals with no business income can choose either regime freely each year when filing their return. Those with business or professional income face restrictions on switching back to the old regime after opting for the new one.
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), employer’s NPS contribution under 80CCD(2), and a small number of others. Popular deductions like 80C, 80D, and HRA exemption are not available under the new regime.
What income level makes this comparison worth doing carefully?
Anyone with substantial deductions — particularly a home loan on a self-occupied property, or significant 80C plus 80D usage — benefits most from actually running both numbers rather than assuming the new regime’s simplicity makes it automatically better; it usually is better, but "usually" isn’t "always."