Income Tax Calculator - Old vs New Tax Regime
Compare Indian income tax under the new and old tax regimes for AY 2026-27. Works for salaried users and business/self-employed taxpayers.
India Income Tax PlanningCompare Income Tax Regimes
Tax Payable Comparison
How This Income Tax Calculator Works
This calculator compares income tax under the new and old tax regimes for AY 2026-27. It supports salaried/pension users and business or self-employed users by changing salary-specific deductions automatically.
Important Assumptions
- For salaried/pension users, new regime standard deduction is taken as Rs. 75,000.
- For salaried/pension users, old regime standard deduction is taken as Rs. 50,000.
- For business/self-employed users, salary standard deduction and HRA exemption are not applied.
- Section 87A rebate is applied where eligible.
- Health and education cess is calculated at 4%.
- This tool is an estimate and does not replace professional tax advice.
Old vs New Regime Slabs Used
| Regime | Slabs Used |
|---|---|
| New Regime | 0% up to Rs. 4L, then 5%, 10%, 15%, 20%, 25%, and 30% above Rs. 24L. |
| Old Regime | Age-based basic exemption, then 5%, 20%, and 30% above Rs. 10L. |
Why the Rebate Makes Such a Big Difference
Section 87A rebate is the reason many middle-income salaried taxpayers end up paying zero tax under the new regime even though the slab table shows a 5-30% structure. The rebate cancels out tax up to Rs. 60,000 for anyone whose taxable income (after the standard deduction) is Rs. 12,00,000 or below. Take a salaried applicant with Rs. 12,00,000 gross income and no other deductions entered: after the Rs. 75,000 new-regime standard deduction, taxable income is Rs. 11,25,000, and the resulting tax before rebate is fully cancelled by the 87A rebate — final tax payable is zero. Run the same Rs. 12,00,000 gross income through the old regime with a typical Rs. 50,000 standard deduction, Rs. 1,50,000 under 80C, and Rs. 25,000 under 80D, and taxable income comes to Rs. 9,75,000, with tax payable of about Rs. 1,11,800 a year (roughly Rs. 9,317 a month) — because the old regime rebate threshold and slabs work differently, and this taxpayer's deductions aren't enough to bring taxable income low enough to benefit the same way.
The Rebate Cliff Edge — A Common Mistake
The 87A rebate under the new regime is not gradual — it's an all-or-nothing cutoff at exactly Rs. 12,00,000 taxable income. This creates a real cliff: a taxpayer with taxable income of Rs. 11,99,999 owes Rs. 0 in tax, while a taxpayer with taxable income of just Rs. 12,00,001 — two rupees more — owes roughly Rs. 62,400, because the entire rebate is lost the moment taxable income crosses the threshold, not just the tax on the amount above it. This is why the calculator's monthly-tax and payable/refund figures can look dramatically different for two taxpayers whose gross income differs by only a small bonus, increment, or extra freelance payment. If your taxable income is close to Rs. 12,00,000, it's worth checking whether a small adjustment — timing a bonus, claiming an eligible new-regime deduction like employer NPS — could keep you under the threshold.
Common Mistakes When Comparing Regimes
The most frequent one is comparing the two regimes using gross salary instead of taxable income — the old regime's advantage depends entirely on how many deductions (80C, 80D, HRA, home loan interest under 24(b)) you can actually claim with documentation, not just what the limits allow. Entering the maximum 80C limit without actually having that much invested in eligible instruments overstates old-regime savings. Another common error is ignoring surcharge at higher incomes — surcharge applies as a percentage of tax (not income) once taxable income crosses Rs. 50 lakh, and it's calculated differently for the old and new regimes above Rs. 2 crore, which can change which regime looks better at high income levels. Finally, business and professional taxpayers sometimes enter gross receipts instead of net profit after expenses — this calculator expects net business/professional profit for the "business" taxpayer type, not turnover.
Income Tax Calculator – Frequently Asked Questions
Which regime should I choose?
It depends on how many deductions you can actually claim. If your eligible deductions (80C, 80D, HRA, home loan interest, etc.) are modest, the new regime's lower slabs and higher rebate threshold usually work out better. If you have significant deductions — a home loan, high 80C investments, HRA — the old regime can still come out ahead. This calculator's verdict box shows the actual rupee difference for your specific numbers rather than a general rule.
Can I switch between regimes every year?
Salaried individuals can generally choose either regime each financial year when filing returns. Business and professional taxpayers who opt out of the new regime typically have more restricted switching rules, so it's worth confirming your specific eligibility with a tax professional if you have business income.
Why does my calculated tax not match what my employer deducted (TDS)?
Employers estimate TDS based on declared investments and the regime you've informed them of, often early in the financial year. If your actual deductions, income, or regime choice at filing time differ from what was declared, the final tax computed here (and by the tax department) can differ from TDS already deducted — enter the TDS/advance tax already paid in the calculator to see the estimated balance payable or refund.
Does this calculator account for capital gains or other special-rate income?
No. This calculator estimates tax on salary, pension, and regular business/professional income taxed at slab rates. Capital gains, lottery winnings, and other income taxed at special fixed rates are computed differently under Indian tax law and are not included in this estimate.