Income Tax Calculator: Old vs New Regime
For FY 2026-27 (tax year 2026-27). Enter yearly amounts to see which regime saves you more tax.
Your details
Deductions (old regime only)
These reduce your tax only under the old regime. Leave blank anything that doesn’t apply to you.
HRA – if you pay rent (old regime only)
We work out your tax-free HRA using the official “least of three” rule.
See the full calculation
| New regime | Old regime |
|---|
Assumes a resident individual with salary and other income taxed at normal slab rates. Capital gains, lottery winnings and other specially taxed income are not included. Tax is rounded to the nearest ₹10.
Old or New Tax Regime? The Question Every Salaried Indian Faces
Every April, your employer asks you to pick a tax regime. Most people tick a box without really knowing which one is better – and some end up paying thousands of rupees more tax than they need to.
India has two income tax systems. The new regime has lower tax rates but almost no deductions. The old regime has higher rates but lets you reduce your taxable income with deductions like 80C, HRA and home loan interest. Which one is cheaper depends entirely on your salary and how much you can claim in deductions. The calculator above works it out for you in seconds.
How to Use the Income Tax Calculator
Step 1 – Enter your details. Pick your age group, then enter your annual gross salary (including HRA and bonus) and any other income, such as FD interest.
Step 2 – Add your deductions. Fill in what you invest or spend under 80C, 80D, NPS and home loan interest. These only count under the old regime.
Step 3 – Add HRA if you pay rent. Open the HRA section and enter your basic salary, the HRA you receive and the rent you pay. The calculator works out your tax-free HRA automatically.
You’ll instantly see your tax under both regimes, which one is cheaper and by how much. If the new regime wins, the calculator also tells you how much more you’d need in deductions for the old regime to be worth it. Open “See the full calculation” for a line-by-line breakdown.
Income Tax Slabs for FY 2026-27
Budget 2026 did not change the tax slabs, so the rates below apply for FY 2026-27 (tax year 2026-27).
New Tax Regime (Default)
| Taxable Income | Tax Rate |
|---|---|
| Up to ₹4 lakh | Nil |
| ₹4 lakh – ₹8 lakh | 5% |
| ₹8 lakh – ₹12 lakh | 10% |
| ₹12 lakh – ₹16 lakh | 15% |
| ₹16 lakh – ₹20 lakh | 20% |
| ₹20 lakh – ₹24 lakh | 25% |
| Above ₹24 lakh | 30% |
The same slabs apply at every age. Thanks to a rebate under Section 87A, you pay no tax if your taxable income is up to ₹12 lakh. Add the ₹75,000 standard deduction, and a salaried person earning up to ₹12.75 lakh pays zero tax. Earn slightly more, and “marginal relief” ensures your tax never exceeds the amount by which your income crosses ₹12 lakh.
Old Tax Regime
| Taxable Income | Below 60 | 60 to 79 | 80 and above |
|---|---|---|---|
| Up to ₹2.5 lakh | Nil | Nil | Nil |
| ₹2.5 lakh – ₹3 lakh | 5% | Nil | Nil |
| ₹3 lakh – ₹5 lakh | 5% | 5% | Nil |
| ₹5 lakh – ₹10 lakh | 20% | 20% | 20% |
| Above ₹10 lakh | 30% | 30% | 30% |
Under the old regime, the Section 87A rebate makes taxable income up to ₹5 lakh tax-free, and the standard deduction is ₹50,000. Unlike the new regime, there’s no marginal relief – go even ₹10,000 over ₹5 lakh and you pay tax on the full slab.
In both regimes, a 4% health and education cess is added to your tax. A surcharge applies on income above ₹50 lakh – capped at 25% in the new regime and up to 37% in the old regime.
Deductions You Can Claim Under the Old Regime
| Deduction | What it covers | Yearly limit |
|---|---|---|
| Section 80C | PPF, ELSS, EPF, life insurance, children’s tuition fees, home loan principal | ₹1.5 lakh |
| Section 80D | Health insurance for you, your family and your parents | Up to ₹1 lakh |
| Section 80CCD(1B) | Your own NPS contributions | ₹50,000 |
| Section 24(b) | Home loan interest on a self-occupied house | ₹2 lakh |
| HRA exemption | Rent you pay, if your salary includes HRA | Least-of-three rule |
| Section 80E | Interest on an education loan | No limit |
Your employer’s NPS contribution (Section 80CCD(2)) is the one notable deduction allowed in both regimes – up to 14% of basic salary in the new regime and 10% in the old. From 1 April 2026 the new Income-tax Act, 2025 has renumbered these sections, but the deductions work the same way and most people still use the familiar names.
How HRA Exemption Is Calculated
Your tax-free HRA is the lowest of these three amounts:
- The HRA you actually receive
- Rent paid minus 10% of your basic salary (plus DA)
- 50% of basic salary if you live in a metro, or 40% elsewhere
New for FY 2026-27: Bengaluru, Hyderabad, Pune and Ahmedabad now count as metros for HRA, alongside Mumbai, Delhi, Kolkata and Chennai. If you rent in one of these four cities, your HRA exemption limit rises from 40% to 50% of basic salary.
Two Real Examples
Example 1: ₹15 Lakh Salary – New Regime Wins
Neha earns ₹15 lakh a year. She invests ₹1.5 lakh under 80C, pays ₹25,000 for health insurance and puts ₹50,000 into NPS – ₹2.25 lakh of deductions in total. She lives in her parents’ house, so there’s no HRA claim.
- Old regime: taxable income ₹12.25 lakh → tax of ₹1,87,200
- New regime: taxable income ₹14.25 lakh → tax of ₹97,500
The new regime saves her ₹89,700 a year – even after giving up ₹2.25 lakh of deductions. She would need about ₹3.2 lakh more in deductions for the old regime to win.
Example 2: ₹20 Lakh Salary in Bengaluru – Old Regime Wins
Arjun earns ₹20 lakh with a basic salary of ₹8 lakh and HRA of ₹4 lakh. He pays ₹35,000 a month in rent in Bengaluru and is also repaying a home loan on a flat in his hometown. His deductions: 80C ₹1.5 lakh, 80D ₹50,000, NPS ₹50,000 and home loan interest ₹2 lakh.
- HRA exemption: ₹3.4 lakh (rent of ₹4.2 lakh minus 10% of basic)
- Old regime: taxable income ₹11.6 lakh → tax of ₹1,66,920
- New regime: taxable income ₹19.25 lakh → tax of ₹1,92,400
Here the old regime saves ₹25,480. But take away the home loan and the new regime wins again – by ₹36,920. It usually takes big-ticket deductions like HRA and a home loan together to tip the balance.
How Much in Deductions Do You Need for the Old Regime to Win?
This is the single most useful number to know. Here’s the total you’d need to claim in deductions and HRA exemption (on top of the standard deduction) before the old regime beats the new one:
| Annual Salary | New Regime Tax | Deductions Needed for Old Regime to Win |
|---|---|---|
| Up to ₹12.75 lakh | ₹0 | Not possible – new regime is already tax-free |
| ₹15 lakh | ₹97,500 | About ₹5.4 lakh |
| ₹20 lakh | ₹1,92,400 | About ₹7.1 lakh |
| ₹25 lakh and above | ₹3,19,800+ | About ₹8 lakh |
For context, maxing out 80C, NPS and a typical health insurance policy adds up to around ₹2.5 lakh. That’s why the new regime is the better choice for most salaried people today. The old regime generally only makes sense if you have a large HRA claim, a home loan, or both.
Mistakes to Avoid
Sticking With the Old Regime Out of Habit
Many people stay in the old regime because they’ve always invested in 80C products. Since the new regime’s rates were cut in 2025, that habit can cost you tens of thousands of rupees a year. Run the numbers again every year.
Buying Insurance or ELSS Just to Save Tax
If the new regime is cheaper for you, a tax-saving investment saves you nothing. Choose PPF, ELSS or insurance because they fit your goals – not just for the deduction.
Forgetting That You Can Switch
If you have only salary income, you can choose a different regime every year when you file your income tax return – even if you told your employer something else in April. People with business income can switch back only once, so they need to choose more carefully.
Missing the 12.75 Lakh Sweet Spot
If your salary is close to ₹12.75 lakh, your employer’s NPS contribution can push your taxable income back under ₹12 lakh in the new regime – potentially taking your tax to zero. Ask your HR team whether NPS is part of your salary structure.
Questions People Actually Ask Us
Which tax regime is the default? The new regime. If you don’t tell your employer or choose while filing your return, you’ll be taxed under the new regime.
Can I claim HRA in the new regime? No. HRA exemption, 80C, 80D, home loan interest on a self-occupied house and most other deductions are only available in the old regime.
Is income up to ₹12 lakh really tax-free? Under the new regime, yes – if your taxable income after the standard deduction is ₹12 lakh or less, the rebate cancels your tax. The rebate doesn’t apply to specially taxed income like capital gains on shares.
Can I pick one regime with my employer and another when filing my ITR? Yes, if you have only salary income. Your employer deducts TDS based on your declaration, but your final tax is based on the regime you choose in your return.
Does this calculator include capital gains? No. Capital gains from shares, mutual funds and property are taxed at special rates and are not included. The calculator covers salary and other income taxed at normal slab rates.
Why is my employer deducting a different amount? Your employer’s TDS is based on the declarations and proofs you submit, and may not include your other income or deductions you claim later. Small differences also come from rounding and the timing of your investments.
Run Your Numbers Before You Decide
There’s no single right answer – it depends on your salary, your rent and your deductions. Enter your numbers above, compare both regimes side by side, and check the “full calculation” to see exactly where the difference comes from.
Disclaimer:
This calculator is meant for educational and informational purposes only. It gives an estimate based on the FY 2026-27 rules for resident individuals and the information you enter.
- It does not include capital gains or other specially taxed income, and it simplifies some rules, such as the individual limits within Section 80D.
- Your actual tax may differ based on your full salary structure, exemptions and proofs submitted.
- Tax laws change often. Always verify with the Income Tax Department’s official resources before filing.
- This calculator has no connection to the Income Tax Department or any government body.
For advice on your own situation, please consult a chartered accountant or a qualified tax professional. See our full Disclaimer.
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