Learn before you calculate
Income Tax Calculator: a practical India guide
Estimate income tax for FY 2025-26 (AY 2026-27) and compare the old and new regimes in one place. The same slab rates continue for Tax Year 2026-27. Enter annual salary and genuine deductions to see taxable income, slab tax, rebate, 4% cess and the estimated difference between regimes.
Educational estimates, not financial, tax or legal advice
Quick answer
For a salaried resident with normal income, the new regime can reduce tax to zero when gross salary is up to ₹12.75 lakh: the ₹75,000 standard deduction brings taxable income to ₹12 lakh, and the eligible Section 87A rebate offsets slab tax. That headline does not automatically apply to capital gains, non-residents or every income mix. Above that level, compare both regimes using deductions you can actually claim.
How to use this calculator well
- 1Use annual gross salary or normal-rate income—not monthly take-home pay. If you start with CTC, first remove employer-side components that are not part of gross salary.
- 2For an old-regime HRA estimate, enter annual basic salary, HRA received, rent paid and the correct metro classification. Leave the fields at zero when HRA does not apply.
- 3Add only deductions you are eligible to claim, such as qualifying 80C payments, health-insurance deduction and eligible self-occupied home-loan interest.
- 4Read both results. Compare taxable income and total tax after rebate and 4% cess, rather than comparing only the headline slab rates.
- 5Use the lower estimate for planning, then reconcile it with Form 16, AIS, Form 26AS and the official return utility before filing.
Formula and method
How the estimate is built
Gross income − allowed exemptions − allowed deductions = taxable income → slab tax − eligible rebate + 4% cess = estimated tax
Tax is progressive: only the income falling inside a slab is taxed at that slab rate. TDS, TCS and advance tax are then adjusted as payments against final liability; they do not change the slab calculation itself.
Start with the right number: CTC, gross salary and taxable income are different
A common calculation mistake happens before tax rates are even applied. CTC is the employer’s total annual cost and can include employer PF, employer NPS, gratuity, insurance or variable benefits. Gross salary is what you earn before employee-side deductions. Taxable income is what remains after exemptions and deductions allowed by the chosen regime.
Use the gross salary shown in your salary statement or Form 16 as the starting point whenever possible. Monthly in-hand salary is not a reliable input because PF, professional tax, TDS and other payroll deductions have already been taken out of it.
- CTC: employer cost, not automatically taxable salary
- Gross salary: salary before eligible tax reductions
- Taxable income: amount on which slab rates are applied
- Net or in-hand salary: cash after payroll deductions
Income-tax slabs for FY 2025-26 and Tax Year 2026-27
Under the new regime, taxable income is divided into ₹4 lakh bands before the top 30% rate begins above ₹24 lakh. These are marginal slabs, so reaching a higher slab does not cause all income to be taxed at the higher rate.
The rates below apply to FY 2025-26, filed in AY 2026-27. Budget 2026 did not replace these slab rates for Tax Year 2026-27. Health and Education Cess is generally added at 4% after income tax and applicable surcharge.
| Taxable income band | Rate on income in that band |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 to ₹8,00,000 | 5% |
| ₹8,00,001 to ₹12,00,000 | 10% |
| ₹12,00,001 to ₹16,00,000 | 15% |
| ₹16,00,001 to ₹20,00,000 | 20% |
| ₹20,00,001 to ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
The table shows rates before rebate, surcharge and 4% cess. The old-regime calculation in this tool uses the slabs for an individual below 60: nil up to ₹2.5 lakh, 5% from ₹2.5–5 lakh, 20% from ₹5–10 lakh and 30% above ₹10 lakh.
Why ₹12 lakh taxable income—or ₹12.75 lakh salary—can result in zero tax
The new-regime slab calculation on ₹12 lakh of taxable income produces ₹60,000 of tax before cess. For an eligible resident individual with qualifying normal-rate income, the Section 87A rebate can offset up to ₹60,000, reducing that tax to zero.
A salaried person may also receive a ₹75,000 standard deduction. That is how gross salary of ₹12.75 lakh can fall to taxable income of ₹12 lakh. This is not the same as saying the first ₹12 lakh is an exempt slab, and the rebate does not automatically wipe out tax on special-rate income such as certain capital gains. Marginal relief can soften the sudden increase when taxable income is only slightly above ₹12 lakh.
Old regime versus new regime: what actually changes
The choice is not simply “lower rates versus more paperwork.” The old regime can reward a taxpayer with substantial, valid exemptions and deductions. The new regime offers wider, lower slabs and a larger rebate but removes many familiar claims.
There is no reliable universal break-even deduction. It changes with income because rebates and marginal slab rates change across the calculation. Enter your own HRA, 80C, 80D and eligible home-loan amount instead of choosing a regime from a social-media rule of thumb.
| Question | New regime | Old regime |
|---|---|---|
| Is it the default? | Yes, for eligible taxpayers | Must be chosen under the applicable opting rules |
| Salary standard deduction | ₹75,000 | ₹50,000 |
| HRA and LTA | Generally not available | Available when legal conditions are met |
| Section 80C and 80D | Generally not available | Available within their conditions and limits |
| Self-occupied home-loan interest | Generally not available | Can be available subject to conditions |
| Employer NPS contribution | A permitted deduction subject to rules | A permitted deduction subject to rules |
| Best suited to | Often simpler when deductions are limited | Worth comparing when genuine claims are substantial |
This is a planning summary, not a complete list of every exemption or deduction. Eligibility can depend on taxpayer type, income source and the applicable tax law.
How HRA, 80C, 80D and home-loan interest affect the old regime
For HRA, the commonly used exemption is the lowest of actual HRA received, rent paid minus 10% of the relevant salary, and 50% of salary for Delhi, Mumbai, Kolkata or Chennai—or 40% elsewhere. The legal meaning of salary and the evidence required matter, so use annual figures from payroll records rather than an estimate based only on CTC.
Section 80C combines eligible items such as employee PF, PPF, qualifying life-insurance premium, eligible tuition fees, ELSS and certain home-loan principal repayments within one overall limit. Section 80D depends on the people insured, their age, payment method and the type of medical expense. Interest on a self-occupied home loan has separate conditions. The calculator cannot validate evidence, ownership, occupancy or eligibility; it only works with the number entered.
New-regime salary examples: ₹12 lakh, ₹12.75 lakh, ₹15 lakh and ₹20 lakh
Examples make the difference between gross salary and taxable income easier to see. The estimates below assume a resident salaried individual, only normal-rate salary income, the ₹75,000 standard deduction, no surcharge and no additional deduction. They are not filing calculations for a person with capital gains or other special-rate income.
| Gross annual salary | Taxable income after ₹75,000 deduction | Estimated total tax |
|---|---|---|
| ₹12,00,000 | ₹11,25,000 | ₹0 after eligible 87A rebate |
| ₹12,75,000 | ₹12,00,000 | ₹0 after eligible 87A rebate |
| ₹15,00,000 | ₹14,25,000 | ₹97,500 |
| ₹20,00,000 | ₹19,25,000 | ₹1,92,400 |
The examples are rounded planning figures and assume the person qualifies for the salary standard deduction and any rebate shown. TDS already deducted is not subtracted here.
Which tax regime is better for you?
Start with what is already true about your finances. Do you receive HRA and pay qualifying rent? How much employee PF already uses the 80C limit? Are health-insurance premiums actually eligible? Is the house self-occupied or let out? A regime comparison should use those facts—not investments purchased only to manufacture a deduction.
The new regime often produces a lower result when claims are limited, especially around the rebate range. The old regime can still win when a taxpayer has a meaningful combination of valid HRA, 80C, 80D, NPS and home-loan benefits. The right answer is simply the regime with the lower correctly computed total tax, provided you are eligible to choose it.
- Compare both regimes with the same income base
- Use deductions supported by documents
- Include the standard deduction only when eligible
- Review cash flow and investment suitability separately from tax
Tax payable, TDS, monthly tax and refund are different numbers
Tax liability is calculated from income after applying the relevant regime, rebate, surcharge and cess. TDS is tax already collected by an employer, bank or another payer. Advance tax and self-assessment tax are also payments against liability. Your return brings the liability and available credits together.
If verified TDS and other tax credits exceed final liability, the return may show a refund. If they are lower, tax may still be payable. Dividing an annual estimate by 12 can help with budgeting, but payroll TDS may vary during the year after bonuses, declarations, employer adjustments or a job change.
Financial year, assessment year and Tax Year: choose the correct period
Income earned from 1 April 2025 to 31 March 2026 belongs to FY 2025-26 and is generally filed in AY 2026-27 under the Income-tax Act, 1961. From 1 April 2026, the Income-tax Act, 2025 uses the simpler term “Tax Year”; Tax Year 2026-27 covers income earned from April 2026 to March 2027.
The slab rates used here continue for Tax Year 2026-27, but the return form, section references and personal facts still need to match the period being filed. Always check the year shown on Form 16 and in the official utility before using an online result.
What this income-tax calculator includes—and what it deliberately leaves out
This version is designed as a quick comparison for a salaried resident individual below 60 with normal-rate income. It estimates the displayed standard deductions, simplified HRA, entered old-regime deductions, slab tax, Section 87A rebate and marginal relief around the new-regime rebate threshold, followed by 4% cess.
It does not separately calculate capital gains, lottery or other special-rate income; surcharge above ₹50 lakh; age-based old-regime slabs; business or professional income; agricultural-income integration; relief under Sections 89 or 90; loss set-offs; multiple house properties; AMT; foreign income or assets; employer NPS deduction; or interest and late-filing consequences. Use the official estimator or a qualified tax professional when any of these apply.
Common income-tax calculation mistakes to avoid
Do not enter monthly take-home pay as annual income, treat the entire CTC as taxable without checking its components, or subtract TDS as if it were a deduction from income. Do not assume ₹12 lakh is a nil-rate slab, and do not claim HRA or a deduction merely because the calculator accepts a number.
Before filing, reconcile salary and TDS with Form 16, verify reported transactions in AIS and Form 26AS, confirm bank and interest income, and check the regime selected in the return. A neat calculator result cannot correct an incomplete income base.
Questions people ask
Income Tax Calculator FAQs
Concise answers to common planning questions. Open any question for the full explanation.
Which tax year does this calculator use?
It uses the slabs effective for FY 2025-26, filed in AY 2026-27. Those slab rates continue for Tax Year 2026-27. The calculator is scoped to the displayed salary and deduction inputs, so verify the period and return rules before filing.
Which is better for a salaried employee: old or new tax regime?
Neither regime is always better. The new regime often wins when deductions are limited; the old regime can win with substantial valid HRA, 80C, 80D, NPS or home-loan benefits. Compare the final tax from your actual numbers.
Is the new tax regime the default?
Yes, it is the default for eligible taxpayers. A person who can use the old regime must choose it through the applicable declaration or return process and meet the timing rules.
Is income up to ₹12 lakh always tax-free in the new regime?
No. The zero-tax result comes from the Section 87A rebate for an eligible resident individual with qualifying normal-rate income and taxable income up to ₹12 lakh. Special-rate income and ineligible taxpayers can still have tax.
Why is ₹12.75 lakh salary sometimes described as tax-free?
For an eligible salaried person, the ₹75,000 standard deduction can reduce ₹12.75 lakh of gross salary to ₹12 lakh of taxable income. The new-regime rebate can then offset the normal slab tax. Other income can change the result.
How much income tax is payable on a ₹15 lakh salary under the new regime?
With only normal salary income and a ₹75,000 standard deduction, taxable income is ₹14.25 lakh. The illustrative tax is ₹93,750 plus ₹3,750 cess, or ₹97,500. Different income or deductions can change it.
How much income tax is payable on a ₹20 lakh salary under the new regime?
With only normal salary income and the ₹75,000 standard deduction, taxable income is ₹19.25 lakh. The illustrative tax is ₹1,85,000 plus ₹7,400 cess, or ₹1,92,400.
Does the calculator include the standard deduction?
Yes. It applies ₹75,000 in the new regime and ₹50,000 in the old regime, limited to the entered income. These deductions are intended for eligible salary or pension income, not every type of income.
How is HRA exemption estimated?
The simplified old-regime estimate uses the lowest of actual HRA received, annual rent minus 10% of basic salary, and 50% of basic salary for Delhi, Mumbai, Kolkata or Chennai—or 40% elsewhere.
What can be included under Section 80C?
Common eligible items include employee PF, PPF, qualifying life-insurance premium, ELSS, NSC, eligible tuition fees and certain home-loan principal payments. They share an overall limit and each item has conditions.
How does Section 80D work in the calculator?
Enter eligible health-insurance or permitted medical amounts using the categories shown. Actual limits depend on who is covered, age, payment method and statutory conditions, so verify the claim rather than entering a generic maximum.
Can I claim both HRA and home-loan benefits?
It can be possible when both sets of legal conditions are independently satisfied and the living and property facts are genuine. Location, property use, ownership, rent evidence and loan details matter.
Is NPS deduction available in the new tax regime?
Qualifying employer NPS contribution can be allowed under the new regime subject to the applicable rules. This calculator does not currently provide a separate employer-NPS input, so verify it in the official estimator.
Can salaried employees switch tax regimes every year?
Eligible taxpayers without business or professional income can generally choose through the return each year, subject to filing rules. Business or professional income cases face additional forms and switching restrictions.
Does the calculator use senior-citizen tax slabs?
No. The old-regime estimate currently uses slabs for an individual below 60. Senior and super-senior taxpayers should use the age-appropriate official calculation. New-regime slabs are not age-based.
Should I enter CTC or gross salary?
Use annual gross salary from payroll records when possible. CTC can include employer contributions and benefits that should not simply be treated as gross taxable salary. The optional CTC breakdown is only a rough starting estimate.
Is TDS the same as final income tax?
No. TDS is tax already collected and credited against final liability. The return compares total liability with TDS, TCS, advance tax and self-assessment tax to determine whether more tax or a refund is due.
Does this income-tax calculator handle capital gains?
No. Capital gains can use special rates, exemptions and loss set-off rules, and the Section 87A treatment may differ. Calculate them in the official utility or with qualified advice.
What is marginal relief above ₹12 lakh?
For eligible new-regime rebate cases, marginal relief limits the abrupt tax increase when taxable income is only slightly above ₹12 lakh. The tax before cess should not exceed the amount by which income crosses the rebate threshold, subject to the applicable rules.
Can I use this result to file my ITR?
Use it as a planning and regime-comparison estimate. Before filing, verify the result in the official utility with all income, deductions, tax credits, losses and special-rate items included.