How to use the income tax calculator
- Gross annual income — everything taxed at slab rates: salary with allowances, pension, interest, rent. Leave out capital gains and lottery winnings, which have their own rates.
- Financial year — FY 2026-27 (from 1 April 2026) or FY 2025-26; the slabs are identical.
- Regime and type of income — the new regime is the default for everyone; the old regime opens fields for your age group and deductions. Salaried employees and pensioners get the standard deduction, other income does not.
The headline is the total tax including surcharge and cess; the other cards show your effective rate, the same inputs under the other regime and the monthly amount left in hand. The rows trace each step and the table splits the tax slab by slab.
New regime slabs (FY 2025-26 and FY 2026-27)
Budget 2025 rewrote the new-regime slabs from 1 April 2025 and Budget 2026 left them untouched, so one table serves both years:
| Taxable income | Rate |
|---|---|
| up to ₹4,00,000 | Nil |
| ₹4,00,000 – ₹8,00,000 | 5% |
| ₹8,00,000 – ₹12,00,000 | 10% |
| ₹12,00,000 – ₹16,00,000 | 15% |
| ₹16,00,000 – ₹20,00,000 | 20% |
| ₹20,00,000 – ₹24,00,000 | 25% |
| above ₹24,00,000 | 30% |
Salaried employees and pensioners deduct a standard deduction of ₹75,000 first. Age makes no difference, and apart from a few items such as employer NPS contributions there are no other deductions — that is the trade-off for the lower rates.
Section 87A rebate and marginal relief
If taxable income is ₹12,00,000 or less, the Section 87A rebate cancels the whole slab tax (up to ₹60,000, exactly the tax on ₹12 lakh), so with the standard deduction a salary of ₹12,75,000 is tax-free. The rebate is for resident individuals and does not cover income taxed at special rates such as capital gains.
Just above the limit, marginal relief stops a cliff: the tax can never exceed the amount by which taxable income exceeds ₹12 lakh. On ₹12,10,000 the slab tax is ₹61,500, but the income is only ₹10,000 over the limit, so tax is capped at ₹10,000 — ₹10,400 with cess. The relief fades out at about ₹12,70,588, where slab tax and excess income are equal.
Surcharge and cess
Surcharge is a percentage of the tax once total income crosses ₹50 lakh:
| Total income | New regime | Old regime |
|---|---|---|
| above ₹50,00,000 | 10% | 10% |
| above ₹1,00,00,000 | 15% | 15% |
| above ₹2,00,00,000 | 25% | 25% |
| above ₹5,00,00,000 | 25% (capped) | 37% |
It has its own marginal relief: tax plus surcharge may rise by no more than the income that crossed the threshold. On ₹51 lakh in the new regime the slab tax rises by ₹30,000 and a full 10% surcharge would add ₹1,11,000 more, so the surcharge is trimmed to ₹70,000 and the total increase is capped at ₹1,00,000. The health and education cess of 4% is then added to tax plus surcharge in both regimes.
Old regime slabs and deductions
| Rate | Below 60 | 60 to 79 | 80 or above |
|---|---|---|---|
| Nil | up to ₹2,50,000 | up to ₹3,00,000 | up to ₹5,00,000 |
| 5% | ₹2,50,000 – ₹5,00,000 | ₹3,00,000 – ₹5,00,000 | ₹5,00,000 – ₹5,00,000 |
| 20% | ₹5,00,000 – ₹10,00,000 | ₹5,00,000 – ₹10,00,000 | ₹5,00,000 – ₹10,00,000 |
| 30% | above ₹10,00,000 | above ₹10,00,000 | above ₹10,00,000 |
The old regime keeps a ₹50,000 standard deduction and a rebate of only ₹12,500 when taxable income is ₹5,00,000 or less, with no marginal relief. Its advantage is deductions: Section 80C up to ₹1,50,000 (provident fund, PPF, ELSS, life insurance, home-loan principal, tuition fees), Section 80D health insurance, the exempt part of HRA, home-loan interest under Section 24 and more. The calculator caps 80C at its limit and takes the other figures as entered — check each against its own ceiling.
Worked example: ₹15 lakh salary, new regime
- Taxable income: ₹15,00,000 − ₹75,000 = ₹14,25,000.
- Slab tax: nil on the first ₹4 lakh; 5% of ₹4 lakh = ₹20,000; 10% of ₹4 lakh = ₹40,000; 15% of the remaining ₹2,25,000 = ₹33,750 — ₹93,750.
- No rebate (above ₹12 lakh), no surcharge (below ₹50 lakh); 4% cess = ₹3,750.
- Tax payable ₹97,500, an effective rate of 6.5%: about ₹8,125 a month, leaving ₹1,16,875 in hand.
In the old regime the same salary owes ₹2,57,400 with no deductions and still ₹2,10,600 with the full ₹1,50,000 under 80C.
New or old regime?
The new regime suits most people, and below ₹12.75 lakh of salary it means no tax at all. The old regime pays off only with large deductions — typically a home loan (Section 24 interest plus 80C principal), a big HRA exemption from rented housing, and the full 80D and NPS limits together. Enter your real figures under the old regime and read the “tax under the other regime” card. Salaried taxpayers can switch every year when filing; those with business or professional income can opt out of the new regime only once.
FY, AY and the Income-tax Act, 2025
The financial year (FY) is when the income is earned — FY 2026-27 runs from 1 April 2026 to 31 March 2027. The assessment year (AY) is the following year, when the return is filed and assessed, so FY 2026-27 is AY 2027-28. The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026 and renumbered its sections without changing the rates: the Section 87A rebate is now Section 156.
An estimate, not a return
The calculator ignores capital gains and other special-rate income, TDS and advance tax already paid, rounding to the nearest ₹10, the ceilings on individual deductions, and the rules for non-residents and Hindu undivided families. Use it for planning; the Income Tax Department’s own calculator and a chartered accountant give the final word. For a loan that could change the old-regime maths see the EMI calculator; for ELSS and other investments the SIP calculator.
Frequently asked questions
Is income up to ₹12 lakh really tax-free?
Under the new regime, yes, for resident individuals: the Section 87A rebate cancels the tax when taxable income is ₹12,00,000 or less, and the ₹75,000 standard deduction stretches that to a ₹12,75,000 salary. Capital gains taxed at special rates are not covered.
Did Budget 2026 change the income tax slabs?
No. The new-regime slabs, the ₹75,000 standard deduction and the ₹60,000 rebate from Budget 2025 continue for FY 2026-27. What changed is the Income-tax Act, 2025 taking effect on 1 April 2026, which renumbers sections (87A becomes 156) without altering the rates.
How much tax do I pay on a ₹15 lakh salary?
About ₹97,500 for the year in the new regime: taxable income ₹14,25,000 after the standard deduction, slab tax ₹93,750 plus 4% cess. The old regime costs ₹2,10,600 even with the full ₹1,50,000 under 80C.
What is marginal relief?
A cap that stops a small rise in income causing a big jump in tax. Just above ₹12 lakh the tax cannot exceed the income over ₹12 lakh; above ₹50 lakh, ₹1 crore and ₹2 crore the same idea limits the surcharge. The calculator applies both.
Can I switch between the new and old regime every year?
Salaried taxpayers and pensioners can choose either regime each year when filing (and tell their employer for TDS). Anyone with business or professional income who opts out of the new regime can return to it only once.
Last updated: October 9, 2026