Updated 27 October 2026
Quick answer: For income earned between 1 April 2026 and 31 March 2027, the new tax regime charges nothing up to ₹12 lakh of taxable income (₹12.75 lakh of salary, after the ₹75,000 standard deduction), then 15% to 30% on higher slabs. The old regime has higher rates but lets you deduct 80C investments, health insurance, HRA and home loan interest. For most people the new regime is cheaper; the old one usually wins only if your deductions add up to well over ₹4–5 lakh a year. Enter your own numbers below to see both side by side.
Budget 2026 left the slabs, the rebate and the standard deduction unchanged from last year. The bigger change is the law itself: the Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026, so many familiar section numbers have new numbers (the rebate, long known as Section 87A, is now Section 156). The tax you pay at a given income is the same.
Income tax calculator: new vs old regime (FY 2026-27)
Enter your yearly income and deductions to see your tax under both regimes, which one saves more, and your monthly take-home. Rates for income earned from 1 April 2026 to 31 March 2027, for resident individuals.
Deductions (old regime, except employer NPS)
How each regime was worked out
| New regime | Old regime |
|---|
Includes the ₹60,000 rebate (zero tax up to ₹12 lakh of taxable income in the new regime, with marginal relief just above it), surcharge with marginal relief, and 4% health and education cess. Not included: capital gains and other income taxed at special rates, agricultural income, and rules for non-residents. Check your final figure on the Income Tax Department's e-filing calculator.
New Regime Tax Slabs for FY 2026-27
| Taxable income | 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% |
A rebate of up to ₹60,000 wipes out the tax completely when taxable income is ₹12 lakh or less. Just above ₹12 lakh, marginal relief caps your tax at the amount by which your income exceeds ₹12 lakh, so earning ₹10,000 more never costs you ₹60,000 in tax. The relief stops mattering at about ₹12.7 lakh. Salaried people and pensioners also get a ₹75,000 standard deduction, and employer contributions to NPS of up to 14% of basic pay are deductible. Almost nothing else is.
Old Regime Tax Slabs
| 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% |
In the old regime the rebate is ₹12,500, so tax is zero only up to ₹5 lakh of taxable income, and the standard deduction is ₹50,000. In both regimes a 4% health and education cess is added to the tax, and a surcharge applies above ₹50 lakh (10%), ₹1 crore (15%) and ₹2 crore (25%; 37% above ₹5 crore in the old regime only).
Which Deductions Only the Old Regime Allows
- 80C, up to ₹1.5 lakh: your PF contribution, PPF, ELSS mutual funds, life insurance premiums, Sukanya Samriddhi, five-year tax-saving FDs, home loan principal and children's tuition fees.
- 80D: health insurance premiums, up to ₹25,000 for yourself and family (₹50,000 if you are a senior citizen), plus the same again for parents.
- HRA exemption if you pay rent and get house rent allowance.
- Home loan interest on a self-occupied house, up to ₹2 lakh.
- 80CCD(1B): an extra ₹50,000 of your own NPS contributions.
- Smaller ones: education loan interest (80E), donations (80G), savings account interest up to ₹10,000 (80TTA), professional tax.
When the Old Regime Still Wins
The calculator shows the break-even point for your income: how much more you would need in deductions before the old regime becomes cheaper. As a rough guide for a salaried person under 60:
- At ₹10–12.75 lakh of salary, the new regime is almost always better, because its tax is zero.
- At ₹15 lakh, deductions of roughly ₹5.5 lakh are needed before the old regime wins. With only the full 80C and some health insurance, the new regime saves about ₹1 lakh a year.
- At ₹25 lakh and above, the old regime can win for people with large HRA, a home loan and full 80C and NPS. Run your numbers rather than guessing.
Two practical points: the new regime is the default, so you must choose the old one explicitly when you file. Salaried people can switch every year; people with business or professional income can move back from the old regime only once.
Worked Example
Priya earns a ₹15 lakh salary and ₹20,000 of bank interest. She puts ₹1.5 lakh into PF and PPF and pays ₹25,000 for health insurance.
- New regime: ₹15.2 lakh minus ₹75,000 = ₹14.45 lakh taxable. Tax ₹96,750, plus 4% cess = ₹1,00,620.
- Old regime: ₹15.2 lakh minus ₹50,000, ₹1.5 lakh and ₹25,000 (and ₹2,500 professional tax) = ₹12.925 lakh taxable. Tax ₹2,00,250, plus cess = ₹2,08,260.
The new regime saves her ₹1,07,640 a year. She would need about ₹3.7 lakh more in deductions for the old regime to win.
Frequently Asked Questions
Is income up to ₹12 lakh tax-free in FY 2026-27?
Yes, in the new regime, for resident individuals, because the ₹60,000 rebate cancels the tax on taxable income up to ₹12 lakh. Salaried people can earn ₹12.75 lakh because of the ₹75,000 standard deduction. The rebate does not cover income taxed at special rates, such as some capital gains.
Did Budget 2026 change the tax slabs?
No. The new regime slabs, the ₹12 lakh rebate limit and the ₹75,000 standard deduction stayed the same as for FY 2025-26. The Income-tax Act, 2025 took effect from 1 April 2026 and renumbered many sections, but did not change these rates.
Can I switch between the old and new regime?
If you have no business income, yes, every year when you file your return, whatever you told your employer. With business or professional income, you can opt out of the new regime and return to it only once.
What is marginal relief?
It stops a small rise in income from causing a big jump in tax. In the new regime, if your taxable income is just over ₹12 lakh, your tax is capped at the amount above ₹12 lakh: on ₹12.1 lakh you pay ₹10,000 plus cess, not ₹61,500. A similar relief applies at each surcharge level.
Is employer NPS deductible in the new regime?
Yes. Your employer's contribution to your NPS account is deductible up to 14% of basic pay plus DA in the new regime (10% in the old regime). Your own NPS contributions are deductible only in the old regime.
Does this calculator include capital gains?
No. Gains on shares, mutual funds and property are taxed at special rates and need to be added separately. The calculator covers salary, pension, interest, rent and other income taxed at slab rates.
Sources
- Income Tax Department: income tax calculator (e-filing portal)
- Union Budget 2026-27: budget documents
- CAclubindia: new tax regime FY 2026-27 slab, rebate and marginal relief reference
- Business Today: what Budget 2026 changed for individual taxpayers
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Rates for FY 2026-27 (tax year 2026-27) for resident individuals, as of October 2026. This is a guide, not tax advice; for your return, use the Income Tax Department's e-filing calculator or a chartered accountant.
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