Income Tax Calculator FY 2026-27 (Old vs New Regime)
Compare your income tax under the old and new regimes for FY 2026-27, including the standard deduction, Section 87A rebate, surcharge and cess. The calculator tells you which regime costs you less.
FY 2026-27 (AY 2027-28) slabs · ₹75,000 standard deduction · 87A rebate up to ₹60,000
80C, 80D, home loan interest, HRA exemption and similar. The new regime does not allow these.
Old vs new regime
The new regime is better for you
You save ₹1,28,700 a year.
New regime
₹1,13,100
7.07% effective
Old regime
₹2,41,800
15.11% effective
New regime detail
Old regime detail
Two regimes, one decision
Since the new regime became the default under Section 115BAC, most salaried people are taxed under it unless they actively opt out. It offers wider slabs and a larger standard deduction, but removes almost every exemption and deduction — no 80C, no 80D, no HRA exemption, no home loan interest on a self-occupied property.
The old regime keeps all of those but taxes income far more steeply, starting at just ₹2.5 lakh. Whether it wins comes down to a single question: are your deductions large enough to outweigh the difference in slabs? For someone with a home loan and a full ₹1.5 lakh of 80C investments in a metro city, they often are. For someone renting modestly with no investments, they are not.
The rebate cliff
The Section 87A rebate is the single most important feature of the new regime for middle incomes. It removes the tax entirely for taxable income up to ₹12 lakh. But it is not a graduated relief — cross the threshold and you lose all of it, and tax becomes payable on the whole taxable income rather than just the excess.
In practice this creates a band just above the threshold where a salary increase leaves you worse off. If you are negotiating a raise near that point, it is worth checking where you land.
Surcharge and cess
Above ₹50 lakh, a surcharge is levied on the tax itself rather than on income. Health and education cess of 4% is then applied on top of tax plus surcharge. Both are included in the figures above, which is why the effective rate is always a little higher than the headline slab rate.
One point of difference worth noting: the new regime caps surcharge at 25%, whereas the old regime goes to 37%. For very high incomes this alone can make the new regime cheaper regardless of deductions.
Frequently asked questions
- What are the income tax slabs for FY 2026-27?
- Under the new regime: nil up to ₹4 lakh, 5% from ₹4–8 lakh, 10% from ₹8–12 lakh, 15% from ₹12–16 lakh, 20% from ₹16–20 lakh, 25% from ₹20–24 lakh and 30% above ₹24 lakh. The old regime keeps its four slabs of nil, 5%, 20% and 30% with a ₹2.5 lakh basic exemption.
- How much income is tax-free?
- Under the new regime a salaried person pays nothing up to ₹12.75 lakh — the ₹12 lakh Section 87A rebate ceiling plus the ₹75,000 standard deduction. Under the old regime the equivalent point is far lower, around ₹5.5 lakh, before any 80C-style deductions.
- Which regime should I choose?
- The new regime wins for most people because the slabs are wider and the standard deduction is larger. The old regime only overtakes it when you claim substantial deductions — typically a full ₹1.5 lakh under 80C plus HRA plus home loan interest. Enter your actual deductions above and the calculator tells you which is cheaper.
- What is the Section 87A rebate?
- A rebate that cancels your tax liability entirely if taxable income is within the limit — ₹12 lakh under the new regime, giving a rebate of up to ₹60,000. It is a cliff, not a taper: cross the threshold by a rupee and the whole rebate disappears, so a raise near that point can cost more in tax than it adds in salary.
- Is the cess included?
- Yes. Health and education cess of 4% is applied to the tax after rebate and surcharge, and is included in the totals shown here.
- When does surcharge apply?
- Surcharge is charged on the tax itself once income crosses ₹50 lakh — 10% above ₹50 lakh, 15% above ₹1 crore, and 25% above ₹2 crore. The new regime caps the top surcharge rate at 25%, whereas the old regime can reach 37%.
- Can I switch regimes each year?
- Salaried individuals without business income can choose afresh each financial year when filing. Those with business income are more restricted and can generally opt out of the new regime only once.
Related free tools
- CTC to In-Hand Salary Calculator
Enter your CTC and see the exact monthly take-home after PF, professional tax and income tax. Free, no sign-up.
- HRA Exemption Calculator
Find the tax-free portion of your House Rent Allowance from your salary, rent paid and city.
- TDS on Salary Calculator
Estimate the monthly TDS to deduct from an employee's salary for the financial year.
Working this out for every employee?
Choosing a regime is a personal decision, but deducting the right TDS every month is the employer's problem. Smart Dhandha computes tax per employee from their actual salary structure and declarations, and keeps the deduction history ready for quarterly filing.
- Per-employee tax computed inside payroll
- TDS tracked and ready for quarterly returns
- Salary structures and declarations in one place
This tool is provided free for general guidance and uses the rates noted above. Statutory rates change, and individual circumstances differ — please confirm with your accountant or a qualified professional before relying on these figures for filing or payroll.