How this income tax calculator works
The calculator takes your gross annual income and runs it through both tax regimes for FY 2025-26 (AY 2026-27) at the same time. Under the new regime it subtracts the standard deduction of ₹75,000, applies the Budget 2025 slabs, checks the section 87A rebate and marginal relief, then adds surcharge and the 4% health and education cess. Under the old regime it subtracts the ₹50,000 standard deduction plus every deduction you enter (80C, 80D, HRA, home loan interest, NPS and others), applies the older 5/20/30% slabs with age-based exemption limits, and adds surcharge and cess.
The two results appear side by side so you can see the total tax, effective rate and take-home under each, with a badge on the regime that leaves more money in hand. Expand either card to see the slab-wise breakup. Everything updates as you type, so you can test what happens if you invest another ₹50,000 in NPS or claim HRA.
The new regime is the default from FY 2023-24 onwards. Salaried employees can still pick the old regime each year at filing time by ticking the option in the ITR form; people with business income must file Form 10-IEA to opt out of the new regime and can switch back only once.
New regime slabs for FY 2025-26 (Budget 2025)
Budget 2025 rewrote the new regime slabs and raised the rebate limit. The slabs apply to taxable income after the ₹75,000 standard deduction, so a salaried person with gross salary of ₹12,75,000 pays no tax at all.
- Standard deduction for salary and pension: ₹75,000.
- Section 87A rebate: up to ₹60,000, which wipes out the tax on taxable income up to ₹12,00,000.
- Employer NPS contribution under section 80CCD(2) up to 14% of basic is still deductible; almost every other chapter VI-A deduction is not.
- Same slabs for every age; there is no separate senior citizen limit under the new regime.
| Taxable income | Rate | Tax in the slab |
|---|---|---|
| Up to ₹4,00,000 | Nil | ₹0 |
| ₹4,00,001 to ₹8,00,000 | 5% | ₹20,000 |
| ₹8,00,001 to ₹12,00,000 | 10% | ₹40,000 |
| ₹12,00,001 to ₹16,00,000 | 15% | ₹60,000 |
| ₹16,00,001 to ₹20,00,000 | 20% | ₹80,000 |
| ₹20,00,001 to ₹24,00,000 | 25% | ₹1,00,000 |
| Above ₹24,00,000 | 30% | 30% of the excess |
Old regime slabs and the deductions that make it work
The old regime keeps the pre-2020 slabs but lets you reduce taxable income with exemptions and deductions. It only beats the new regime when those deductions are large, typically above ₹4 to 5 lakh for a ₹15 lakh salary.
- Standard deduction ₹50,000; section 87A rebate up to ₹12,500 for taxable income up to ₹5,00,000 (no marginal relief).
- Section 80C: ₹1,50,000 across PF, PPF, ELSS, life insurance, home loan principal, tuition fees and 5-year FDs.
- Section 80D: ₹25,000 for self and family (₹50,000 if a senior citizen) plus ₹25,000/₹50,000 for parents.
- HRA exemption under section 10(13A), LTA, and home loan interest up to ₹2,00,000 under section 24(b) for a self-occupied house.
- Section 80CCD(1B): an extra ₹50,000 for your own NPS contribution, over and above 80C.
- Others: 80E education loan interest (no cap), 80G donations, 80TTA/80TTB savings interest, 80EEA/80EEB where still available.
| Taxable income | Below 60 | 60 to 79 | 80 and above |
|---|---|---|---|
| Up to ₹2,50,000 | Nil | Nil | Nil |
| ₹2,50,001 to ₹3,00,000 | 5% | Nil | Nil |
| ₹3,00,001 to ₹5,00,000 | 5% | 5% | Nil |
| ₹5,00,001 to ₹10,00,000 | 20% | 20% | 20% |
| Above ₹10,00,000 | 30% | 30% | 30% |
Section 87A rebate and marginal relief: a worked example
Under the new regime the rebate of ₹60,000 makes tax nil up to ₹12 lakh of taxable income. Just above that limit the tax would otherwise jump from zero to more than ₹60,000, so the law caps the tax at the amount by which income exceeds ₹12 lakh. This is marginal relief, and it applies roughly up to a taxable income of ₹12,75,000.
Example: taxable income ₹12,10,000. Slab tax is ₹20,000 + ₹40,000 + 15% of ₹10,000 = ₹61,500. The income exceeds ₹12 lakh by only ₹10,000, so tax is limited to ₹10,000, plus 4% cess = ₹10,400. Without marginal relief the bill would have been ₹63,960. The calculator shows this relief as a separate line so you can see exactly how much it saved.
The old regime rebate is smaller (₹12,500) and stops abruptly at ₹5,00,000 of taxable income with no marginal relief, which is why an old-regime taxable income of ₹5,00,100 attracts about ₹13,000 of tax.
Worked example: ₹15 lakh salary under both regimes
New regime: ₹15,00,000 less ₹75,000 standard deduction = ₹14,25,000 taxable. Tax = ₹20,000 (5% slab) + ₹40,000 (10% slab) + ₹33,750 (15% on ₹2,25,000) = ₹93,750. Add 4% cess of ₹3,750 and the total is ₹97,500, an effective rate of 6.5%.
Old regime with typical deductions (80C ₹1,50,000, 80D ₹25,000, standard deduction ₹50,000): taxable income ₹12,75,000. Tax = ₹12,500 + ₹1,00,000 + ₹82,500 (30% on ₹2,75,000) = ₹1,95,000, plus cess ₹7,800 = ₹2,02,800. The new regime saves ₹1,05,300.
Add an HRA exemption of ₹2,00,000 and home loan interest of ₹2,00,000 to the old regime and taxable income falls to ₹8,75,000. Tax = ₹12,500 + ₹75,000 = ₹87,500, plus cess ₹3,500 = ₹91,000, which is ₹6,500 lower than the new regime. In other words, at ₹15 lakh you need roughly ₹6 lakh of deductions before the old regime wins.
Surcharge and cess
- Surcharge applies on the tax (not the income) when taxable income exceeds ₹50 lakh: 10% up to ₹1 crore, 15% up to ₹2 crore, 25% up to ₹5 crore and 37% above ₹5 crore under the old regime.
- The new regime caps surcharge at 25%, so very high earners save under it even before deductions are considered.
- Marginal relief also applies to surcharge so that crossing ₹50 lakh or ₹1 crore by a rupee does not cost more than the extra income.
- Health and education cess of 4% is charged on tax plus surcharge under both regimes and is not refundable or deductible.
- Surcharge on dividend income and on capital gains under sections 111A and 112A is capped at 15%.
Which regime should you choose?
For most salaried people earning up to ₹12,75,000 the new regime is a clear win: zero tax and no paperwork. Between ₹13 lakh and ₹25 lakh the answer depends on your deductions. If you pay rent in a metro, have a home loan, invest the full 80C and 80CCD(1B) limits and pay family health insurance, run the numbers in the calculator; the old regime can still edge ahead.
Remember that HRA, LTA and most chapter VI-A deductions vanish under the new regime, but employer NPS under 80CCD(2), gratuity, leave encashment and the standard deduction survive. Whatever the calculator says, the choice is made in the ITR itself, so you can decide after the year ends once you know your actual deductions.