Income Tax Calculator
Old vs New Regime FY 2026-27 (AY 2027-28)
Zero tax up to ₹12L income
Old Regime
₹0
Std ₹50K + All deductions
New Regime
₹0
Std ₹75K. Zero tax upto ₹12L
| Slab | Amount | Tax |
|---|
India's income tax system gives you a choice: the New Regime with lower tax rates but fewer deductions, or the Old Regime with higher rates but extensive deductions. Understanding which regime saves you more money is crucial for smart tax planning. Our calculator helps you compare both options instantly.
₹12L
Tax-free in new regime
₹1.5L
80C deduction limit
30%
Maximum tax slab
| Income Range | New Regime Rate | Old Regime Rate |
|---|---|---|
| Up to ₹3,00,000 | 0% (Nil) | 0% (Nil) |
| ₹3,00,001 - ₹4,00,000 | 5% | 5% |
| ₹4,00,001 - ₹5,00,000 | 5% | 20% |
| ₹5,00,001 - ₹7,00,000 | 10% | 20% |
| ₹7,00,001 - ₹8,00,000 | 15% | 20% |
| ₹8,00,001 - ₹10,00,000 | 20% | 30% |
| Above ₹10,00,000 | 30% | 30% |
Note: 4% Health & Education Cess applies on tax amount. Surcharge applies for income above ₹50L.
✅ Choose New Regime If:
- • You have minimal deductions (< ₹2.5L)
- • Income under ₹12L (zero tax with rebate)
- • You don't claim HRA or home loan benefits
- • You prefer simpler tax filing
- • Your 80C is already exhausted by PF/insurance
✅ Choose Old Regime If:
- • You have high deductions (> ₹3L)
- • You pay home loan interest
- • You claim HRA exemption
- • You have health insurance for parents
- • You're a business owner (can't switch easily)
🎯 The Break-Even Point
Generally, if your total deductions exceed ₹2.5-3 lakhs, the old regime works better. This includes 80C (₹1.5L) + 80D (₹25K) + HRA + home loan interest. Use our calculator above to find your exact break-even point!
Section 80C
Max: ₹1,50,000
- • PPF, ELSS, FD (5yr)
- • LIC premium, ULIP
- • Home loan principal
- • Tuition fees (2 kids)
- • EPF contribution
- • NPS (within limit)
Section 80D
Health Insurance
- • Self: ₹25,000
- • Parents: ₹25,000
- • Senior parents: ₹50,000
- • Preventive checkup: ₹5,000
- Max total: ₹75,000
Section 24(b)
Home Loan Interest
- • Self-occupied: ₹2,00,000
- • Let-out: No limit
- • Conditions apply
Section 80E
Education Loan
- • No upper limit
- • 8 years max
- • Higher studies only
- • For self/children/spouse
Section 80CCD(1B)
NPS Exclusive
- • ₹50,000 extra
- • Over & above 80C
- • Mandatory for NPS
- • Best tax saver!
Other Deductions
- • 80G: Donations (50/100%)
- • 80TTA: Savings interest ₹10K
- • 80TTB: Senior FD interest ₹50K
- • 80U: Disability ₹75K-1.25L
- • HRA: As per formula
📅 Timing Your Investments
Don't wait for March! Start SIPs in ELSS in April itself. For 80C, invest in PPF before April 5 for full year interest. Buy health insurance early to avoid last-minute rush.
👨👩👧 Family Tax Planning
Invest in spouse's PPF if your 80C is full. Pay health insurance for parents (extra ₹50K deduction). Gift money to major children for their own investments.
🏠 Home Loan Optimization
Principal (80C): ₹1.5L | Interest (24b): ₹2L = ₹3.5L total! Joint loan with spouse = double benefits. First-time buyers: Additional ₹50K under 80EE.
💼 Salaried Employees
Submit investment proofs by January. Opt for NPS corporate deduction if available. Claim LTA properly - requires actual travel.
What is Section 87A rebate and how does it work?
Section 87A provides a tax rebate to reduce your tax liability to zero. In the New Regime FY 2026-27, if your taxable income is up to ₹12 lakhs, you get a rebate of up to ₹60,000 (making your tax zero). In the Old Regime, the rebate is ₹12,500 for income up to ₹5 lakhs. This is different from deductions - it's applied directly on the tax calculated, not on income. No additional forms needed; it's automatically applied when filing ITR.
Can I switch between old and new tax regime every year?
Salaried employees: Yes! You can choose a different regime every financial year when filing your income tax return. No justification or permission needed. Business owners/professionals: You can switch only ONCE after choosing the new regime. Once you switch back to old regime, you cannot opt for new regime again. This restriction prevents business owners from gaming the system year after year.
Why is my employer deducting TDS every month?
Employers are required to deduct Tax Deducted at Source (TDS) from your salary based on your projected annual income. They calculate tax on your estimated yearly salary minus declared investments, then divide by 12 months. Submit your investment proofs (80C, 80D, home loan, HRA receipts) by January to reduce TDS. If excess TDS is deducted, claim refund when filing ITR. TDS ensures government gets tax revenue throughout the year.
What deductions are NOT available in the new tax regime?
The New Regime disallows almost all deductions except: Standard deduction (₹50,000 or ₹75,000 FY 2026-27), Employer NPS contribution (80CCD2), Home loan interest on let-out property (limited), and Transport allowance for divyang employees. Not allowed: 80C, 80D, HRA, LTA, home loan interest (self-occupied), 80E, 80G, 80TTA, 24(b), and all other Chapter VI-A deductions.
How do I calculate HRA exemption correctly?
HRA exemption is the LEAST of these three: (1) Actual HRA received, (2) 50% of (Basic + DA) for metro cities / 40% for non-metro, (3) Rent paid - 10% of (Basic + DA). Example: Basic ₹50,000, HRA ₹20,000, Rent ₹15,000. Option 1: ₹20,000 | Option 2: ₹25,000 (50% of basic) | Option 3: ₹15,000 - ₹5,000 = ₹10,000. Exemption: ₹10,000 (lowest). Keep rent receipts and landlord PAN for proof.
Maximize your tax savings with these investment calculators. Compare returns and tax benefits: