The Income Tax Calculator helps salaried individuals, freelancers, and businesses compute their tax liability under both the Old and New tax regimes for FY 2026-27 (AY 2027-28). It provides a side-by-side comparison so you can choose the regime that minimizes your tax outgo.
It calculates your total income tax by applying the correct slab rates, factoring in the standard deduction of ?75,000, section-wise deductions (80C, 80D, 80CCD(1B), HRA, home loan interest, etc.), and the 4% health & education cess. It also applies surcharge automatically for high-income earners.
Income tax in India is computed using a slab-based progressive system. The total tax is the sum of tax computed at each slab, plus surcharge (if applicable), plus 4% health & education cess.
Total Tax = (Slab-wise Tax + Surcharge) × 1.04 Where Surcharge = 10%/15%/25%/37% of tax for income above ?50L/?1Cr/?2Cr/?5Cr respectively Let's calculate tax for a salaried employee below 60 years with ?12,00,000 annual gross salary.
Gross Salary: ?12,00,000 | Basic: ?4,80,000 | HRA: ?2,40,000 | 80C: ?1,50,000 | 80D: ?25,000 | Rent: ?1,80,000/year
Standard Deduction: ?75,000 | HRA Exemption: ?90,000 | 80C: ?1,50,000 | 80D: ?25,000
Taxable Income = ?12,00,000 − ?3,40,000 = ?8,60,000
Tax: 0 + ?1,25,000 (5% of 2.5L) + ?72,000 (20% of 3.6L) = ?1,97,000 + 4% cess = ?2,04,880
Standard Deduction: ?75,000 | No other deductions
Taxable Income = ?12,00,000 − ?75,000 = ?11,25,000
Tax: 0 + ?15,000 (5% of 3L) + ?45,000 (10% of 3L) + ?33,750 (15% of 2.25L) = ?93,750 + 4% cess = ?97,500
Old Regime: ?2,04,880 | New Regime: ?97,500
New Regime saves ?1,07,380 — recommended for this profile. If you have higher deductions (home loan, HRA in metro, 80CCD(1B)), the old regime may become competitive.
Many taxpayers default to the old regime without comparing. The new regime is now the default — always calculate both and choose the lower tax option.
Under the old regime, taxpayers miss 80CCD(1B) (?50K extra for NPS), 80DD/80DDB, education loan interest u/s 80E, and donation deductions u/s 80G.
HRA exemption is the least of three values: actual HRA received, rent paid minus 10% of basic, or 50%/40% of basic. Many claim the full HRA received instead.
This gives an extra ?50,000 deduction over and above 80C's ?1.5 lakh. Investing in NPS Tier-1 can save ?15,000-?15,600 in tax for those in 30% bracket.
Employers may deduct TDS under the wrong regime or miss declarations. Always verify Form 26AS/AIS against your actual tax liability and claim refunds if excess TDS.
Salaried with one house property: ITR-1. Multiple properties or capital gains: ITR-2. Business income: ITR-3/4. Wrong form leads to defective return notices.
A comprehensive comparison of both tax regimes with real examples. Find out which regime saves you more tax based on your income and deductions.
Read More ? DeductionsExplore all investments and expenses eligible under Section 80C — PPF, ELSS, life insurance, tuition fees, and more to save up to ?46,800 in tax.
Read More ? FilingLearn how to file your Income Tax Return online on the new tax portal. Includes documents needed, ITR form selection, and e-verification process.
Read More ?Bookmark this page for quick access during tax season. Share it with colleagues and friends who need to compare tax regimes.
Financial Year 2026-27 (April 1, 2026 to March 31, 2027) offers taxpayers the choice between two tax regimes: the Old Regime with deductions and the New Regime with lower tax rates. Understanding both regimes is crucial for optimal tax planning.
The Old Tax Regime allows various deductions under sections like 80C, 80D, 24(b), and HRA exemption, but has higher tax rates. The New Tax Regime offers lower tax rates but eliminates most deductions, making it simpler but potentially more expensive for those with significant investments.
The choice depends on your total deductions. As a thumb rule, if your deductions exceed ?2-3 lakh, the Old Regime is likely more beneficial. Otherwise, the New Regime with its lower rates may save you more tax. Use this calculator to compare both regimes with your actual numbers and make an informed decision.
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