CalcInfinityIncome Tax Calculator
Compare the Old and New tax regimes side by side and see which one saves you more, for FY 2025-26 (AY 2026-27).
What is income tax?
Income tax is the tax you pay to the government on what you earn in a financial year — for most salaried and self-employed individuals in India, it's calculated on your income after certain deductions, using slab rates that rise as income rises.
Since 2023, you can choose between two different sets of rules each year: the New Regime (lower slab rates, almost no deductions) or the Old Regime (higher slab rates, but a wide range of deductions available). Which one results in less tax depends entirely on how much you can actually deduct under the Old Regime.
Why use this calculator?
Picking a regime by instinct is easy to get wrong — the New Regime's lower rates don't automatically mean lower tax if you have significant 80C, HRA, or home loan deductions available under the Old Regime. This calculator computes both regimes side by side from the same income, so you can see the actual rupee difference instead of guessing.
How Your Tax Is Calculated
Both regimes follow the same five steps — they just use different numbers at each one.
- 1.Deductions reduce gross income to taxable income. The New Regime allows only the standard deduction (₹75,000.00 for salaried income). The Old Regime also allows Section 80C (up to ₹1,50,000.00) and other deductions like HRA, 80D, and home loan interest.
- 2.Slab rates apply progressively. Each slice of your taxable income is taxed at its own slab's rate — not your whole income at your highest slab's rate.
- 3.The Section 87A rebate can bring tax to zero. Below ₹12,00,000.00 taxable income (New Regime) or ₹5,00,000.00 (Old Regime), the rebate cancels out the slab tax entirely. Marginal relief protects income just above that threshold from a sudden jump.
- 4.Surcharge applies above ₹50 lakh taxable income. An additional percentage on top of slab tax, with its own marginal relief at each threshold so crossing a surcharge band doesn't cost more than the income that crossed it.
- 5.A 4% Health & Education Cess applies last. Calculated on (slab tax + surcharge), added on top to reach your final total tax payable.
Worked Example — ₹12,00,000 salaried income
Old Regime vs New Regime at a Glance
| Feature | New Regime | Old Regime |
|---|---|---|
| Standard Deduction (salaried only) | ₹75,000.00 | ₹50,000.00 |
| Section 80C (PPF, ELSS, EPF, life insurance) | Not available | Up to ₹1,50,000.00 |
| HRA, Section 80D, home loan interest | Not available | Available |
| Section 87A rebate threshold | ₹12,00,000.00 | ₹5,00,000.00 |
| Slab rates | 0–30% across 7 slabs | 0–30% across 4 slabs |
| Best suited for | Few deductions to claim | Significant 80C/HRA/home loan deductions |
Frequently Asked Questions
Common Mistakes to Avoid
- The New Regime doesn't allow most deductions. Section 80C, HRA, and home loan interest only reduce tax under the Old Regime — entering them under the New Regime won't change the result, since the law doesn't allow it there.
- Gross income isn't taxable income. The standard deduction (and, under the Old Regime, 80C and other deductions) reduce your income first — tax is calculated on the smaller taxable-income figure, not your full salary.
- Crossing the rebate threshold isn't a cliff. Earning just above ₹12,00,000 (New Regime) or ₹5,00,000 (Old Regime) doesn't suddenly cost you the entire rebate — marginal relief caps the increase in tax to the amount your income exceeds the threshold by.
- High incomes owe surcharge on top of slab tax. Above ₹50 lakh taxable income, a surcharge applies before cess — at very high incomes, slab tax plus 4% cess alone understates what you actually owe.
References
- Income Tax Department, Government of India
- Central Board of Direct Taxes (CBDT)
Last reviewed July 2026