Income Tax Calculator (Old vs New Regime)

How this Income Tax Calculator works

This income tax calculator for India applies the notified FY 2026-27 (AY 2027-28) slab rates for both the old and new tax regimes. It starts with your declared annual gross income and then adjusts it based on standard deduction for eligible salaried taxpayers, HRA exemption and key Chapter VI-A deductions such as Section 80C and 80D where applicable under the old regime.

For the new regime, the calculator uses the latest slab structure and rebate rules introduced in recent Budgets. Most exemptions and deductions are not available here, so the tool primarily applies the new slab rates, checks if you are eligible for section 87A rebate and then adds surcharge and health & education cess wherever applicable.

Behind the scenes, the calculator computes two parallel tax journeys: one for the old regime and one for the new regime. For each journey it derives taxable income, applies slab-wise tax, subtracts rebate (if any), and then adds surcharge and 4% cess to arrive at total tax. The final screen shows total tax under each regime, the effective tax rate and a simple recommendation on which regime is more tax-efficient for your profile based on the inputs you provide.

• Enter your annual gross income and choose salaried or non-salaried.
• Add deduction amounts like Section 80C, 80D and HRA (for old regime comparison).
• Click on compare to compute taxable income and tax under both regimes.
• Review the detailed breakup: slab-wise base tax, rebate, surcharge, cess and total tax.
• Use the recommendation text and effective tax rate to decide which regime suits you better.

Non-salaried users can still use the calculator by selecting the appropriate income type and entering eligible deductions. While some salaried-specific benefits like standard deduction or HRA may not apply, the core logic of comparing old and new regime tax liability remains the same for all resident taxpayers.

Formula Used

For the old tax regime, taxable income typically factors in standard deduction for salaried taxpayers, HRA exemption as per the prescribed rules and eligible Chapter VI-A deductions (like Section 80C and 80D) based on current law.

For the new tax regime, the calculator applies the latest reduced slab rates along with the applicable section 87A rebate and surcharge thresholds, with limited deductions allowed as per the new regime provisions.

Taxable Income = Gross Income - Standard Deduction (if eligible) - Eligible Deductions

Total Tax = (Slab Tax - Rebate) + Surcharge + 4% Health & Education Cess

Example Calculation

Suppose your gross annual income is Rs 12,00,000, Section 80C investments are Rs 1,50,000, Section 80D deduction is Rs 25,000 and HRA exemption (for a salaried user) is Rs 1,00,000. Under the old regime, these deductions and exemptions reduce your taxable income before slab rates are applied. Under the new regime, the calculator applies the revised slab rates and rebate rules on income computed as per new regime provisions. The tool then compares both outcomes and clearly highlights the regime with lower total tax for easier decision-making.

When the old tax regime may be better

The old tax regime can be more beneficial if you actively invest and plan your taxes. Taxpayers who claim higher deductions under Section 80C, maintain adequate health insurance for Section 80D benefits, receive HRA as part of their salary structure and are eligible for other Chapter VI-A deductions often see a lower taxable income under the old slabs.

This is especially true for salaried employees living in rented accommodation in metro cities, individuals with home loan interest benefits, and families with multiple qualifying deductions across investments and insurance. In such cases, the wider basket of exemptions and deductions in the old regime can more than offset the relatively higher slab rates.

When the new tax regime may be better

The new tax regime is generally better for taxpayers who do not claim many deductions or exemptions and prefer a simpler structure. If your salary package has limited components like HRA, you do not invest up to the full Section 80C limit, or you are in the early stages of your career with fewer financial commitments, the lower slab rates in the new regime can reduce your overall tax outgo.

It may also suit freelancers, gig workers and self-employed professionals with fluctuating incomes who want straightforward slabs without having to lock large amounts into tax-saving instruments. Use this calculator each year to re-check which regime aligns with your current income pattern and savings habits before making a final choice.

Important disclaimer

This income tax calculator is a general planning tool created for individual taxpayers in India. While it aims to reflect the prevailing slab rates and standard provisions for FY 2026-27, it cannot capture every special case, exemption, rebate or interpretation that may apply to your specific situation.

The results generated here should not be treated as legal, tax or investment advice and should not be used as a substitute for official Income Tax Department utilities or professional guidance. Before filing your income tax return or making major financial decisions, always review your Form 16, AIS and other official records and consult a qualified tax professional or financial advisor.