Income tax calculator FY 2026–27: new or old regime?
Every salaried taxpayer chooses each year between the new regime, with lower rates and almost no deductions, and the old regime, with higher rates but deductions for investments, insurance, a home loan and rent. This calculator works out your tax under both for FY 2026–27, from your own salary and deductions, and shows which leaves you more.
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Open the calculator to work out your own figure.
How the number is worked out
- New regime: your salary less a standard deduction of ₹75,000 (and any employer NPS contribution), taxed at the FY 2026–27 slabs: up to ₹4 L: nil; ₹4 L to ₹8 L: 5%; ₹8 L to ₹12 L: 10%; ₹12 L to ₹16 L: 15%; ₹16 L to ₹20 L: 20%; ₹20 L to ₹24 L: 25%; above ₹24 L: 30%.
- A rebate removes the tax entirely when taxable income is ₹12 L or less, so a salary of up to ₹12,75,000 pays no tax. Just above that, marginal relief means the tax is never more than the income above ₹12 L.
- Old regime: your salary less a standard deduction of ₹50,000, then 80C (up to ₹1,50,000), 80D health premiums (up to ₹25,000 for your family, ₹50,000 if you are 60 or over, plus a separate limit for parents), your own NPS under 80CCD(1B) (up to ₹50,000), home loan interest (up to ₹2,00,000) and HRA, taxed at the old slabs for your age.
- HRA exemption is the smallest of three figures: the HRA you receive, rent paid less 10% of basic salary, and 50% of basic in Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Pune and Ahmedabad (40% elsewhere). Bengaluru, Hyderabad, Pune and Ahmedabad were added to the 50% list from FY 2026–27.
- Both regimes then add surcharge on income above ₹50,00,000, with marginal relief, and 4% health and education cess. The regime with the lower total is the one we suggest.
A worked example
Meera earns ₹18,00,000 a year. She puts ₹1,50,000 into 80C investments, pays ₹25,000 for family health insurance and adds ₹50,000 to NPS herself. Under the new regime she pays ₹1,50,800; under the old regime, ₹2,80,800. The new regime saves her ₹1,30,000.
If she also paid ₹2,00,000 of home loan interest and rented a flat in Bengaluru for ₹25,000 a month, with HRA of ₹3,60,000 on a basic salary of ₹7,20,000, the old regime would cost ₹1,47,264 and edge ahead by ₹3,536. The old regime only wins when the deductions are large.
| Salary | ₹18,00,000 |
| Tax, new regime | ₹1,50,800 |
| Tax, old regime (80C, 80D, NPS) | ₹2,80,800 |
| Tax, old regime (plus home loan interest and HRA) | ₹1,47,264 |
| Better choice with every deduction | Old regime, by ₹3,536 |
Assumptions
- Rates and limits are for FY 2026–27 under the Income-tax Act, 2025, which replaced the 1961 Act from 1 April 2026. The familiar section names (80C, 80D and so on) are used here; their numbers in the new Act are different.
- Salary and bank interest only. Capital gains, freelance or business income, rent you receive and ESOPs change the answer; the income tax tool inside the free assessment covers them.
- Savings account interest is deducted up to ₹10,000 under the old regime (₹50,000 of all bank interest if you are 60 or over).
- Home loan interest is for a home you live in. Professional tax and other deductions are not included.
Frequently asked questions
Which is better, the new or the old tax regime?
For most salaried people the new regime now costs less, because its lower rates and ₹75,000 standard deduction outweigh the deductions they give up. The old regime can still win if you claim large deductions together, typically home loan interest and HRA on top of full 80C. The only way to know is to work out both with your own figures.
Can I switch between the regimes every year?
If your income is from salary, yes: you can choose either regime each year when you file your return, provided you file on time. If you have business or professional income, the rules are much stricter about moving back and forth, so check before you switch.
Which deductions are allowed under the new regime?
Very few. The main ones are the standard deduction of ₹75,000 and your employer’s NPS contribution. 80C, 80D, your own NPS contribution under 80CCD(1B), home loan interest on a home you live in and HRA are not.
Should I still invest in 80C if I choose the new regime?
Invest for your goals, not for the deduction. PPF, EPF and ELSS can still be good homes for long-term savings, and term and health insurance are worth having whichever regime you choose.
Is this tax advice?
No. It is an educational estimate built from the figures you enter. For your return, check with a chartered accountant or the income tax department’s own calculator.