Income tax planning is essential for every salaried Indian. With the choice between the new tax regime (lower rates, fewer deductions) and the old regime (higher rates, more deductions), you need to compare both side-by-side. Use the calculator above to see your tax liability under both regimes. Also check your HRA exemption, Section 80D deduction, and in-hand salary.

Income Tax Slabs FY 2026-27 — New vs Old Regime

New Regime (Default)

₹0 - ₹3L: 0%

₹3L - ₹7L: 5%

₹7L - ₹10L: 10%

₹10L - ₹12L: 15%

₹12L - ₹15L: 20%

₹15L+: 30%

87A Rebate: Up to ₹7L income = ₹0 tax

Old Regime

₹0 - ₹2.5L: 0%

₹2.5L - ₹5L: 5%

₹5L - ₹10L: 20%

₹10L+: 30%

87A Rebate: Up to ₹5L income = ₹0 tax

Tax Comparison for Different Income Levels

Gross Income	New Regime Tax	Old Regime Tax*	Better Regime
₹5,00,000	₹0	₹0	Same (both ₹0)
₹7,00,000	₹0	₹26,000	New Regime
₹10,00,000	₹54,600	₹83,200	New Regime
₹12,00,000	₹93,600	₹1,33,900	New Regime
₹15,00,000	₹1,69,000	₹2,29,840	New Regime
₹20,00,000	₹2,60,000	₹3,37,480	New Regime

*Old regime assumes no deductions claimed. If you claim ₹1.5L under 80C + ₹50k 80D, old regime may be better at higher incomes.

How to Calculate Income Tax

In plain words

Income tax in India follows a progressive slab system where different portions of income are taxed at different rates. For FY 2026-27, you can choose between the new regime (lower rates, fewer deductions) and the old regime (higher rates, more deductions). A rebate under Section 87A applies if taxable income is up to ₹7 lakh (new regime).

How the calculation works

Tax = Σ (Income in Slab × Slab Rate)

New Regime Slabs FY 2026-27:
₹0 - ₹3,00,000: 0%
₹3,00,001 - ₹7,00,000: 5%
₹7,00,001 - ₹10,00,000: 10%
₹10,00,001 - ₹12,00,000: 15%
₹12,00,001 - ₹15,00,000: 20%
Above ₹15,00,001: 30%

Total Tax = Tax Amount + Surcharge (if applicable) + 4% Cess

A quick example

Let us calculate tax for a salaried employee under the new regime:

Gross Annual Income:₹12,00,000

Tax Regime:New Regime FY 2026-27

Standard Deduction:₹75,000

Taxable Income:₹11,25,000

Step by step

1.₹0 - ₹3,00,000 at 0%: ₹0 tax
2.₹3,00,001 - ₹7,00,000 at 5%: ₹20,000 tax
3.₹7,00,001 - ₹10,00,000 at 10%: ₹30,000 tax
4.₹10,00,001 - ₹11,25,000 at 15%: ₹18,750 tax
5.Total tax before cess = ₹68,750
6.No surcharge as income is under ₹50L
7.Health & education cess (4%) = ₹2,750
8.Monthly in-hand ≈ ₹(12,00,000 - 71,500) / 12 = ₹94,041

So the answer is: Total Tax = ₹71,500 | Effective Tax Rate = 5.96% | Monthly In-Hand ≈ ₹94,041

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Frequently Asked Questions

Which tax regime is better?

The new regime has lower tax rates but fewer deductions. If you claim significant deductions (80C, 80D, HRA), the old regime may be better. For most salaried employees with minimal deductions, the new regime is simpler and often beneficial.

What is the tax rebate under 87A?

Under Section 87A, if your taxable income is up to ₹7,00,000 (new regime) or ₹5,00,000 (old regime), you get a full rebate — meaning zero tax liability.

What is the standard deduction for 2026?

For FY 2026-27, the standard deduction is ₹75,000 under the new regime and ₹50,000 under the old regime.

How is HRA taxed?

HRA is partially exempt. The exemption is the minimum of: actual HRA received, 50%/40% of basic salary (metro/non-metro), and rent paid minus 10% of basic salary.

What is the surcharge on income tax?

Surcharge applies if income exceeds ₹50 lakh: 10% for ₹50L-₹1Cr, 15% for ₹1Cr-₹2Cr, 25% for ₹2Cr-₹5Cr, and 37% for above ₹5Cr.