Income Tax Calculator

How This Income Tax Calculator Works

This calculator compares income tax under the new and old tax regimes for FY 2025-26 / AY 2026-27 under the Income-tax Act, 1961, or Tax Year 2026-27 under the Income-tax Act, 2025. It supports salaried/pension users and business or self-employed users. The Old Regime result is an estimate using the standard deduction plus supported deductions entered by the user.

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.
• Old Regime supports entered 80C, 80D, HRA, home-loan interest, 80CCD(1B) and eligible 80E interest. Limits and basic conditions are applied, but documents and every legal eligibility condition are not verified.
• The applicable rebate provision is applied where eligible: Section 87A for FY 2025-26 / AY 2026-27, or Section 156 for Tax Year 2026-27. The rebate is available only to eligible resident individuals.
• Marginal relief is shown separately where the selected rules provide it, including the new-regime rebate threshold and surcharge thresholds.
• Health and education cess is calculated at 4%.
• This version estimates supported normal-rate income only. Capital gains, lottery or gaming winnings, special-rate dividends and other special-rate income are not calculated by this tool.
• This tool is an estimate and does not replace professional tax advice.

Old vs New Regime Slabs Used

Why the Rebate and Marginal Relief Matter

The applicable resident-individual rebate is the reason many middle-income salaried taxpayers can end up paying zero tax under the new regime even though the slab table shows a 5-30% structure. For the supported years, the new-regime rebate can cancel tax up to Rs. 60,000 when taxable income after permitted deductions is within Rs. 12,00,000. 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 — 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.

Rebate Threshold and Marginal Relief — A Common Mistake

The new-regime rebate has a threshold, and the applicable rules provide marginal relief around that threshold so that tax does not jump beyond the permitted excess over the threshold. This means a taxpayer just above Rs. 12,00,000 taxable income should inspect both the displayed rebate and rebate marginal-relief lines rather than assuming the full rebate disappears without relief. Surcharge thresholds are also subject to marginal relief in the applicable cases. If income is close to a threshold, verify the result against the official rules and your return data.

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.