Income Tax Calculator FY 2025-26 & FY 2026-27

What Is Income Tax in India?

Income tax in India is a direct tax levied by the central government on income earned by individuals, Hindu Undivided Families, firms, companies, and other persons during a financial year. It is administered by the Income Tax Department under the Ministry of Finance.

For individuals, income tax applies across five heads: salaries, income from house property, profits and gains from business or profession, capital gains, and income from other sources (interest, dividends, and other receipts). Tax is computed on the aggregate taxable income across all heads after eligible deductions and exemptions under the chosen regime.

From 1 April 2026, the Income Tax Act 2025 replaced the Income Tax Act 1961 with identical rates and slabs but reorganised section numbering. For FY 2025-26 (ITR filing year), IT Act 1961 applies. For FY 2026-27 (current planning year), IT Act 2025 applies. Both use exactly the same slab logic because Parliament made no rate changes during this transition.

Income Tax Slabs FY 2025-26 and FY 2026-27

India offers two parallel tax regimes. The new regime is the default from FY 2023-24 onwards. The old regime is opt-in. Both regimes and their slabs are identical for FY 2025-26 and FY 2026-27.

New Regime Slabs (Default)

Salaried employees and pensioners get a flat ₹75,000 standard deduction. The 87A rebate (up to ₹60,000) makes effective tax zero for taxable income up to ₹12 lakh, subject to conditions.

Surcharge: 10% on tax above ₹50L taxable, 15% above ₹1Cr, 25% above ₹2Cr (capped at 25% in new regime). Plus 4% Health and Education Cess on total tax including surcharge.

Old Regime Slabs

Standard deduction of ₹50,000 for salaried employees. The 87A rebate (up to ₹12,500) makes tax zero for taxable income up to ₹5 lakh. Deductions under 80C, HRA, home loan, 80D, and NPS can reduce taxable income significantly.

How to Use This Income Tax Calculator

This calculator compares new and old regime taxes for your exact income profile. Results update instantly as you type, with no page refresh required.

1. 1
   Select your financial year

   Use the FY toggle above the calculator. Choose FY 2025-26 for ITR filing season; choose FY 2026-27 for current year tax planning. Both use identical slabs.

2. 2
   Enter your annual income and profile

   Type your gross annual salary or drag the slider. Select your age group (Under 60, 60 to 79, or 80+) and employment type. Age affects old regime slab thresholds. Employment type determines whether the ₹75,000 standard deduction applies.

3. 3
   Open the deductions section for old regime comparison

   Expand Deductions to enter 80C investments, NPS, health insurance, and home loan interest. These only affect old regime tax. The new regime applies the standard deduction automatically and ignores all other deductions.

4. 4
   Add capital gains and TDS if applicable

   Expand Capital Gains to enter equity STCG, LTCG, and other gains. For TDS reconciliation, enter the total TDS from your Form 26AS or AIS. The results panel shows whether you get a refund or owe a balance.

5. 5
   Read the verdict and slab breakdown

   The right panel shows which regime wins, by how much, effective tax rate, and TDS outcome. The full slab-by-slab breakdown table appears below the calculator with a regime tab toggle.

The Rs.12 Lakh Zero-Tax Rule Explained

Is ₹12 lakh income really tax-free in FY 2025-26? Yes, for most salaried individuals in the new regime, under specific conditions.

How the 87A Rebate Works: Step by Step

For a salaried person with ₹12 lakh gross salary under the new regime:

1. Gross salary: ₹12,00,000
2. Less standard deduction: ₹75,000
3. Taxable income: ₹11,25,000
4. Slab tax: ₹0 (0-4L) + ₹20,000 (4-8L at 5%) + ₹32,500 (8-11.25L at 10%) = ₹52,500
5. 87A Rebate (taxable income ≤ ₹12L, rebate up to ₹60,000): ₹52,500 credited back
6. Net tax payable: ₹0

When the Rs.12L Zero-Tax Rule Does NOT Apply

• Equity capital gains present: Any equity STCG or LTCG removes the 87A rebate entirely. Even ₹1 of equity gains means slab tax is levied on your full salary income.
• Taxable income above ₹12L: Even ₹1 above ₹12L of taxable income disqualifies the rebate. However, marginal relief applies for incomes between ₹12L and ₹12.75L.
• Old regime: The old regime 87A rebate is only ₹12,500 and applies only at taxable income up to ₹5 lakh.

Marginal Relief at the Rs.12 Lakh Boundary

If your taxable income is ₹12,50,000, normal slab computation gives ₹85,500 in tax. Marginal relief caps this at ₹50,000 (the exact excess over ₹12L). You are never taxed more than the additional income above the rebate threshold. This calculator applies marginal relief automatically for all inputs.

Salary-Wise Tax Comparison: New vs Old Regime

The table below shows final tax payable (including 4% cess) for salaried individuals under 60 with no additional income or deductions. These are the numbers with only the standard deduction applied, before any 80C, HRA, or home loan deductions.

Assumptions: Salaried, under 60, no HRA, no 80C or 80D investments, no capital gains. Old regime includes ₹50,000 standard deduction; new regime includes ₹75,000. No surcharge (income below ₹50L taxable).

When Does the Old Regime Win? Break-Even Analysis

The old regime wins only when eligible deductions reduce your taxable income enough that old-regime tax falls below new-regime tax. The new regime starts with lower slab rates and a ₹12L zero-tax threshold. The only way the old regime can win is if your deductions are large enough to overcome that difference.

Break-Even Deduction Thresholds by Income

The question to ask: how much in total deductions do I need for old regime to pay less than new regime?

The HRA and Home Loan Conflict

Two of the largest old-regime deductions are HRA (for rented accommodation) and home loan interest under Section 24(b) (for self-occupied property). In practice, these are largely mutually exclusive: if you own the home you live in, you do not pay rent, so you cannot claim HRA. Someone can claim HRA or home loan interest, but rarely both at the same time. This limits how much the old regime can actually save in practice for most people.

Who Should Still Evaluate the Old Regime?

• Employees in Delhi, Mumbai, Kolkata, or Chennai paying high rent with a significant HRA component in salary. Metro HRA exemptions can reach ₹3 to ₹5 lakh for senior roles in high-cost cities.
• Home loan holders with large outstanding loans. Self-occupied property allows up to ₹2 lakh deduction per year under Section 24(b).
• Senior citizens with large FD interest income. Section 80TTB allows up to ₹1 lakh deduction on FD and savings interest, available only in old regime.
• Employees with maxed 80C (₹1.5L) plus NPS (₹50K) plus 80D (₹50K). This stack adds ₹2.5 lakh in deductions but still needs additional large deductions to beat the new regime above ₹15L.

The Simplest Way to Decide

Enter your income and all actual deduction amounts in this calculator. The verdict panel shows which regime wins and by exactly how much. Declare your regime choice to your employer before April 1 so payroll deducts TDS on the correct basis from the start of the financial year.

Key Deductions and Exemptions in the Old Regime

The old regime allows a wide set of deductions that can reduce taxable income significantly if you qualify for multiple heads simultaneously. For a full breakdown of qualifying instruments, investment deadlines, and planning tips, see our Section 80C deductions guide.

None of these deductions apply in the new regime except employer NPS contribution under Section 80CCD(2) (up to 14% of basic salary, available in both regimes). The new regime's simplicity is a deliberate trade-off: lower rates in exchange for fewer deductions.

For Salaried Employees

Most salaried employees benefit from the new regime for FY 2025-26 and FY 2026-27. The revised slabs and ₹12L zero-tax threshold give salaried individuals a materially lower tax burden compared to the old regime, especially for incomes between ₹7.5 lakh and ₹15 lakh.

Declaring Regime Choice to Your Employer

Inform your employer about regime choice at the start of the financial year, typically in April. Employers default to new regime and deduct TDS on that basis unless you specifically request old regime in writing before April. Changing mid-year is allowed but requires filing ITR to get any excess TDS refunded. For salary restructuring strategies that reduce tax without switching regimes, see our tax planning guide for salaried employees.

Standard Deduction and Form 16

The ₹75,000 standard deduction (new regime) or ₹50,000 (old regime) is applied automatically by your employer while computing monthly TDS. Your Form 16 Part B will reflect this. When entering salary in this calculator, always use gross salary before any deductions. The calculator applies the standard deduction automatically based on your employment type selection.

Employer NPS Contribution Under Section 80CCD(2)

If your employer contributes to your NPS Tier I account, that contribution is deductible under Section 80CCD(2) up to 14% of basic salary. This deduction is available in the new regime and is not subject to the ₹50,000 cap that applies to your own voluntary contributions. It is one of the few deductions that persist in the new regime and can meaningfully reduce taxable income for employees with a high basic salary component.

For Senior Citizens (60 and Above)

Senior citizens face a different tax landscape because of age-specific benefits available only in the old regime. The new regime treats all age groups identically, which works against some retirees and in favour of others depending on their income composition.

Old Regime Benefits Specific to Senior Citizens

• Higher nil slab: Senior citizens (60 to 79) have a nil slab up to ₹3 lakh versus ₹2.5L for under-60. Super seniors (80+) have a nil slab up to ₹5 lakh and skip the 5% bracket entirely.
• Section 80TTB: Allows deduction of up to ₹1 lakh in interest income from FDs, savings, recurring deposits, and post office schemes. Available only in old regime. For retirees living on FD income, this single deduction is often the deciding factor.
• Form 15H: If estimated annual tax liability is nil, senior citizens can submit Form 15H to banks to prevent TDS deduction on FD interest.

When Should Senior Citizens Consider Old Regime?

If primary income is pension plus FD interest and total income is between ₹5 lakh and ₹12 lakh, the old regime may give a lower tax bill because of the higher nil slab and 80TTB deduction. Above ₹15 lakh, the new regime's lower slab rates typically win even for senior citizens. Run both in this calculator with your actual interest income to compare. For a complete picture of age-specific benefits, Form 15H eligibility, and FD interest planning, see our income tax guide for senior citizens.

For Freelancers and Self-Employed Professionals

Freelancers, consultants, and self-employed professionals face rules that differ from salaried employees in an important way: there is no standard deduction for self-employed individuals in the new regime. The ₹75,000 standard deduction applies only to salaried employees and pensioners.

Section 44ADA Presumptive Taxation

Eligible professionals (architects, doctors, engineers, accountants, lawyers, consultants, and others notified under Section 44AA) with gross receipts up to ₹75 lakh per year can opt for Section 44ADA presumptive taxation. Under 44ADA, 50% of gross receipts is deemed taxable income. No books of accounts are required and no actual expenses need to be documented separately.

For the full eligibility list, books of accounts requirements, and how 44ADA interacts with both regimes, read our Section 44ADA guide for professionals.

Advance Tax Instalments for Freelancers

If estimated annual tax liability exceeds ₹10,000, quarterly advance tax payments are mandatory. This calculator shows a warning when employment is set to Self-Employed or Freelance and liability exceeds this threshold.

• 15 June: At least 15% of estimated annual tax
• 15 September: At least 45% of estimated annual tax (cumulative)
• 15 December: At least 75% of estimated annual tax (cumulative)
• 15 March: 100% of estimated annual tax (cumulative)

Missing advance tax due dates attracts interest under Sections 234B and 234C. The penalty is 1% per month on the shortfall, so quarterly discipline matters.

Capital Gains and the 87A Rebate

Capital gains from equity shares, equity mutual funds, property, and gold are taxed separately from salary income. Two things to know before filing:

Equity Capital Gains Remove the 87A Rebate

If you earned any STCG or LTCG from equity or equity mutual funds during the year, the ₹60,000 Section 87A rebate does not apply at all. Even if your salary income alone would have been zero-tax (under ₹12L taxable), the presence of equity gains removes the rebate entirely and your salary is now taxed from the first slab. Most salaried people who sold equity shares mid-year discover this only at ITR filing time.

Capital Gains Tax Rates FY 2025-26

• Equity STCG (held under 12 months): 20% flat rate under Section 111A. No 87A rebate available.
• Equity LTCG (held over 12 months): 12.5% under Section 112A on gains above ₹1.25 lakh per year. The first ₹1.25 lakh of equity LTCG is fully exempt annually.
• Property, gold, debt MFs, and other assets: Taxed at slab rate if short-term. For long-term (24 months for property and gold), taxed at 12.5% without indexation for assets acquired on or after 23 July 2024.

Capital gains tax applies identically under both regimes. This calculator adds it as a separate line when you enter values in the Capital Gains accordion, showing the combined total under each regime. If your gains include ETF units, see our ETF taxation guide. For dividend income from stocks or mutual funds, see tax on dividend income in India.

Advance Tax: Who Pays and When

Advance tax spreads your annual tax liability across the year in four instalments. It prevents large cash outflows at filing time and avoids interest charges under Sections 234B and 234C.

Who Must Pay Advance Tax?

Any taxpayer whose estimated net tax liability (after TDS and other credits) exceeds ₹10,000 for the financial year must pay advance tax. This includes freelancers, self-employed individuals, those with significant capital gains or rental income, and salaried employees whose employer has not deducted sufficient TDS. Salaried employees whose employer handles full TDS are generally exempt from advance tax obligations.

Due Dates for FY 2026-27

• 15 June 2026: Pay at least 15% of estimated annual tax
• 15 September 2026: Pay at least 45% of estimated annual tax (cumulative)
• 15 December 2026: Pay at least 75% of estimated annual tax (cumulative)
• 15 March 2027: Pay 100% of estimated annual tax (cumulative)

Frequently Asked Questions

Answers to the most common questions about income tax slabs, regime choice, the zero-tax threshold, and related provisions for FY 2025-26 and FY 2026-27:

Other Calculators

Tools that complement income tax planning:

Tax Guides and Planning Resources

In-depth articles on income tax: from ITR filing to deductions to investment taxation:

Planning Tax Planning in India: A Complete Guide

Year-round tax planning framework covering regime choice, deductions, and capital gains harvest.

Salaried Tax Planning for Salaried Employees India 2025

Salary restructuring, NPS, ELSS timing, and regime choice strategies for FY 2025-26.

Deductions Section 80C Deductions: Complete List Explained

Every qualifying investment and expense under 80C, with limits, lock-in, and tax treatment.

ITR Filing Which ITR Form to File: India Explained

ITR-1, ITR-2, ITR-3, ITR-4: which applies to your income type and why.

ITR Filing AIS vs TIS vs Form 26AS: What to Check Before Filing

How to reconcile these three documents to avoid notices and missed TDS credits.

Senior Citizens Income Tax for Senior Citizens: Benefits and Exemptions

Higher nil slab, 80TTB deduction, Form 15H, and when old regime still wins for retirees.

Freelancers Section 44ADA: Presumptive Tax for Professionals Explained

Who qualifies, how 50% deemed income works, and whether old or new regime makes sense.

Investment Tax Tax on Dividend Income in India

How dividends from stocks and mutual funds are taxed at slab rates, and TDS implications.

Investment Tax ETF Taxation in India: STCG, LTCG, and Indexation

How equity and debt ETFs are taxed differently, and what changed after Budget 2024.