How it's calculated
The calculator works out your tax for the tax year 2026-27 (1 April 2026 to 31 March 2027) twice: under the new regime, which is the default, and under the old regime with the deductions you enter. It then shows which costs less and by how much.
From 1 April 2026 Indian income tax is governed by the Income-tax Act, 2025, which replaced the 1961 Act. The new regime's slabs are in section 202, and the Budget for 2026-27 left personal tax rates unchanged.Gazette of IndiaMinistry of Finance
The formula
- Gross income = salary + other income (+ the employer's NPS contribution, which counts as salary).
- Taxable income = gross income − standard deduction (₹75,000 new, ₹50,000 old) − deductions allowed in that regime.
- Slab tax, new regime: 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, 30% above. Old regime: nil up to ₹2.5 lakh (₹3 lakh at 60 to 79, ₹5 lakh at 80+), 5% to ₹5 lakh, 20% to ₹10 lakh, 30% above.Gazette of India
- Rebate (section 156): new regime, up to ₹60,000 when taxable income is ₹12 lakh or less, and above ₹12 lakh the tax is limited to the income above ₹12 lakh (marginal relief); old regime, up to ₹12,500 when taxable income is ₹5 lakh or less.
- Surcharge on high incomes: 10% above ₹50 lakh, 15% above ₹1 crore, 25% above ₹2 crore, and in the old regime 37% above ₹5 crore, each with marginal relief so crossing a threshold never costs more than the extra income.
- Cess: 4% health and education cess on tax plus surcharge.
The calculator also finds the break-even: the amount of old-regime deductions at which both regimes cost the same. Below it the new regime is cheaper.
Worked example
On a ₹15 lakh salary, the new regime tax is ₹97,500. Under the old regime with ₹1.5 lakh of 80C, ₹25,000 of health insurance and ₹2,500 of professional tax, it is ₹2,02,020. The old regime would only win with deductions over ₹5,43,749.
| Line | New regime | Old regime |
|---|---|---|
| Gross income | ₹15,00,000 | ₹15,00,000 |
| Deductions and exemptions | ₹75,000 | ₹2,27,500 |
| Taxable income | ₹14,25,000 | ₹12,72,500 |
| Tax on slabs | ₹93,750 | ₹1,94,250 |
| Rebate (s.156) | ₹0 | ₹0 |
| Surcharge | ₹0 | ₹0 |
| Health and education cess (4%) | ₹3,750 | ₹7,770 |
| Total tax | ₹97,500 | ₹2,02,020 |
| Per month | ₹8,125 | ₹16,835 |
A ₹12.75 lakh salary pays ₹0 under the new regime: ₹12 lakh after the standard deduction, fully covered by the rebate.
With large deductions (₹30 lakh salary with ₹3.6 lakh HRA exemption, ₹1.5 lakh 80C, ₹2 lakh home loan interest, ₹50,000 NPS and ₹25,000 health insurance) the old regime costs ₹4,79,700 against ₹4,75,800 under the new one.
Assumptions and limitations
- Resident individual. Non-residents cannot claim the rebate, and other rules apply.
- All income at slab rates. Capital gains, dividends, lottery winnings and other special-rate income are not included, and the 15% surcharge cap on them is not applied.
- Deductions as entered, within their limits. The calculator caps 80C at ₹1.5 lakh, home loan interest at ₹2 lakh, 80D by age and the extra NPS deduction at ₹50,000, but it cannot check whether you qualify. HRA exemption is easiest to work out with the HRA calculator.
- Tax is rounded to the rupee. In a return, income is rounded to the nearest ₹10 first.