Income Tax Calculator (Old vs New Regime)

The Income Tax Calculator helps salaried and self-employed individuals in India estimate their annual income tax liability under both the New Tax Regime and the Old Tax Regime, side by side. Instead of manually working through slab rates, standard deductions, and Section 87A rebates, you get an instant comparison so you can pick the regime that leaves more money in your pocket.

It is useful for anyone filing an Income Tax Return (ITR), planning salary structuring with an employer, or deciding how much to invest in 80C/80D instruments before the financial year closes.

Both regimes tax your income in slabs, where each portion of income above a threshold is taxed at a progressively higher rate, plus a 4% Health & Education Cess on the final tax amount:

Tax = Σ (Income in each slab × Slab Rate) + 4% Cess

• New Regime: Lower slab rates and a flat ₹75,000 standard deduction, but no 80C, 80D, or HRA deductions. A full rebate under Section 87A applies if taxable income is up to ₹12,00,000, making tax payable zero.
• Old Regime: Higher slab rates but allows deductions such as Section 80C (up to ₹1,50,000), 80D (health insurance), and HRA/home loan interest. Section 87A rebate applies up to ₹5,00,000 taxable income.

The calculator applies the correct slab structure for your selected financial year and, for the Old Regime, your age category (since senior and super senior citizens get a higher basic exemption).

Consider Priya, a salaried employee in Mumbai with a Gross Annual Income of ₹12,00,000 for FY 2026-27, who claims ₹1,75,000 in Section 80C and 80D deductions.

• New Regime: Taxable Income = ₹12,00,000 − ₹75,000 (standard deduction) = ₹11,25,000. Tax works out to ₹52,500, but since taxable income is under ₹12,00,000, the full Section 87A rebate applies and her final tax is ₹0.
• Old Regime: Taxable Income = ₹12,00,000 − ₹50,000 (standard deduction) − ₹1,75,000 (deductions) = ₹9,75,000. Tax works out to ₹1,07,500 + 4% cess (₹4,300) = ₹1,11,800.

In this case, the New Regime saves Priya ₹1,11,800 — even though she has healthy 80C/80D investments, because her income falls under the ₹12 lakh rebate threshold.

• Instant Comparison: See your exact tax liability under both regimes without spreadsheets or manual slab math.
• Investment Planning: Know upfront how much your 80C/80D investments are actually worth in tax savings before you commit money to them.
• Regime Switching Insight: Salaried individuals can switch regimes every year; this tool tells you which one to declare to your employer for the current financial year.

Practical Tips:

• If your total eligible deductions (80C + 80D + HRA + home loan interest) exceed roughly ₹4,25,000–4,75,000, the Old Regime often works out cheaper — check both every year, since your deduction mix can change.
• The New Regime is now the default; if you want the Old Regime, you (or your employer, for TDS purposes) must actively opt in each year.
• Don't forget employer NPS contributions under Section 80CCD(2) — they are deductible under both regimes and are easy to miss.

Sources & References

• Union Budget 2025 — Ministry of Finance, Government of India (revised slab structure, continued unchanged for FY 2026-27)
• Income Tax Department of India — Section 87A rebate and Health & Education Cess provisions