Income Tax Calculator — India, FY 2026-27

How the FY 2026-27 income tax calculator works

India runs two parallel personal-income-tax regimes for individuals: the older slab structure with a wide deduction menu (commonly called the “old regime”), and a simplified concessional slab structure with a narrower deduction menu (the “new regime,” also called the default regime since FY 2023-24). This calculator computes your liability in either regime using the slab rates, rebate limits, surcharge tiers and Health & Education Cess as they stand for the assessment year 2027-28 (financial year 2026-27).

Slabs — old regime (individuals below 60)

• Up to ₹2,50,000 — 0%
• ₹2,50,001 to ₹5,00,000 — 5%
• ₹5,00,001 to ₹10,00,000 — 20%
• Above ₹10,00,000 — 30%

Senior citizens (60 to 79 years) get a higher exemption of ₹3,00,000 and super-senior citizens (80+) of ₹5,00,000, with the same upper-slab rates. There is also a Section 87A rebate of up to ₹12,500 that takes the tax to zero for any taxpayer whose total taxable income is at or below ₹5,00,000.

Slabs — new regime (FY 2026-27, all ages)

• Up to ₹3,00,000 — 0%
• ₹3,00,001 to ₹7,00,000 — 5%
• ₹7,00,001 to ₹10,00,000 — 10%
• ₹10,00,001 to ₹12,00,000 — 15%
• ₹12,00,001 to ₹15,00,000 — 20%
• Above ₹15,00,000 — 30%

Section 87A in the new regime grants a higher rebate of up to ₹25,000, with the threshold raised to ₹7,00,000 of taxable income. Marginal relief applies to income just above ₹7,00,000 — the additional tax cannot exceed the additional income above the threshold, which is why our calculator may show ₹100 of tax on an income of ₹7,00,100 instead of the slab rate.

Standard deduction and Section 80CCD(2)

Salaried taxpayers and pensioners receive a standard deduction without any documentation: ₹50,000 in the old regime and ₹75,000 in the new regime (the latter raised in Budget 2024 from ₹50,000 to ₹75,000 specifically to make the new regime more attractive). Employer contributions to NPS under Section 80CCD(2) are also allowed in the new regime — up to 10 percent of basic for private-sector employees and 14 percent for central or state government employees. We treat 80CCD(2) outside this calculator because it is computed at the salary-component level rather than the gross-income level; our salary take-home calculator handles it.

Old-regime deductions worth knowing

The new regime trades simplicity for higher taxes (or sometimes lower, depending on your deduction profile). The old regime stays competitive when the following deductions stack up:

• Section 80C — combined ₹1.5 lakh cap covering EPF, PPF, tax-saving FDs, ELSS mutual funds, life insurance premiums, NPS Tier-1 via 80CCD(1), tuition fees for up to two children, principal repayment on a home loan, and Sukanya Samriddhi deposits.
• Section 80CCD(1B) — an additional ₹50,000 of NPS Tier-1 contribution above the 80C cap. This is the only Chapter VI-A deduction that stacks cleanly on top of 80C.
• Section 80D — health insurance premiums for self, spouse, children (₹25,000 cap) and parents (additional ₹25,000, raised to ₹50,000 if parents are senior citizens). A preventive health check-up is deductible up to ₹5,000 within these caps.
• Section 80E — interest paid on an education loan, with no rupee cap, available for eight years from the year you start repayment.
• Section 80TTA / 80TTB — savings-account interest is exempt up to ₹10,000 for non-seniors via 80TTA; 80TTB grants a wider ₹50,000 exemption for senior citizens covering both savings and FD interest.
• Section 24(b) — interest on a home loan, capped at ₹2 lakh for a self-occupied property. Let-out property has no cap, but the overall loss from house property is restricted to ₹2 lakh against other income with the balance carried forward eight years.
• HRA exemption — least of (actual HRA, 50%/40% of basic salary for metro/non-metro, rent paid minus 10% of basic). The new regime does not allow HRA exemption at all, which is the single biggest hit it takes for rented-accommodation employees in metros.

Surcharge and marginal relief

On top of slab tax, India levies a percentage surcharge that scales with total taxable income:

• Above ₹50 lakh — 10%
• Above ₹1 crore — 15%
• Above ₹2 crore — 25%
• Above ₹5 crore — 37% (old regime only — the new regime caps at 25%)

The Budget 2023 cap on the new regime at 25% surcharge means that very-high- income earners (above ₹5 crore taxable) pay measurably less tax under the new regime than the old, even before considering the new regime’s narrower deduction menu. At each surcharge threshold, marginal relief ensures that the additional surcharge cannot exceed the additional income above the threshold. This is why a taxpayer at ₹50,00,001 of income owes only about ₹1 of surcharge (not the full 10%): the entire incremental rupee is absorbed by relief.

Health & Education Cess

A flat 4% Health & Education Cess is applied on the sum of slab tax and surcharge in both regimes. For most middle-income earners, this cess is the difference between, say, ₹62,500 and ₹65,000 of total liability — small in rupee terms but it stacks on every rupee of tax you owe.

Choosing between the regimes

Use the regime comparison view above to see your actual numbers side by side. As a rule of thumb (subject to your own deduction profile):

• Old regime usually wins when you fully use 80C (₹1.5L), claim the ₹50K NPS top-up, have ₹2L of home-loan interest and a healthy HRA exemption — the combined deduction often crosses ₹4–5 lakh, which brings taxable income low enough that the old regime’s wider 20% bracket and lower cess base are favourable.
• New regime usually wins when you do not own a home, do not rent in a high-rent metro, do not max out 80C, or simply want a fuss-free return with no documentation. The break-even income shifts each year as standard deduction and slab rates change; for FY 2026-27 it sits roughly at ₹15 lakh CTC for someone with no major deductions and around ₹25 lakh for someone fully utilising the old-regime menu.

The choice is reversible every year for salaried taxpayers (you can switch between regimes annually), but business or professional income is locked once opted out of the new regime — switching back is a one-time option only.

What this calculator does not cover

We focus on slab tax, rebate, surcharge, cess and the core Chapter VI-A deductions for salaried and pensioner individuals. The following are out of scope and handled in dedicated calculators (or omitted by design):

• Capital gains — STCG/LTCG on equity, debt, property and gold have separate rate structures (12.5% LTCG above ₹1.25L equity exemption, 20% STCG on equity post-Budget 2024, slab rate on debt MFs bought after 1-Apr- 2023, taxpayer-choice 12.5%/20%-with-indexation on pre-23-Jul-2024 property). Use our capital gains calculator for those.
• Crypto income — 30% flat with no set-off and 1% TDS — handled by the crypto tax calculator.
• Lottery / game-show winnings — 30% flat, no deductions, taxed separately from slab income.
• Agricultural income — exempt from income tax but used for the aggregation method to determine the slab for non-agri income above ₹5,000.
• Foreign income / DTAA — non-resident and resident-but-not- ordinarily-resident statuses change the picture entirely; treaty benefits require separate analysis.

Worked example — ₹15 lakh CTC, salaried, both regimes

Take a salaried employee in Mumbai earning ₹15,00,000 gross, contributing ₹1,50,000 to PPF (80C), ₹50,000 to NPS Tier-1 (80CCD(1B)), ₹25,000 to a family health-insurance plan (80D), and paying ₹2,00,000 of interest on a home loan for a self-occupied property (Section 24(b)). HRA exemption is zero (owned home).

• Old regime — std deduction ₹50,000, total deductions ₹4,75,000, taxable income ₹10,25,000. Slab tax = ₹12,500 (5% on 2.5L) + ₹1,00,000 (20% on 5L) + ₹7,500 (30% on 25K) = ₹1,20,000. Cess at 4% = ₹4,800. Total tax = ₹1,24,800.
• New regime — std deduction ₹75,000, no other deductions allowed, taxable income ₹14,25,000. Slab tax = ₹20,000 + ₹30,000 + ₹30,000 + ₹45,000 = ₹1,25,000. Cess at 4% = ₹5,000. Total tax = ₹1,30,000.

Old regime saves ₹5,200 here. Without the home loan interest, however, the comparison flips — strip out ₹2,00,000 of Section 24(b) and old-regime taxable income jumps to ₹12,25,000, slab tax to ₹1,80,000, total ₹1,87,200. Now new regime saves ₹57,200. The home loan is the swing factor.

Frequently asked questions

Can I claim Section 80C in the new regime?

No. The new regime forfeits all Chapter VI-A deductions except 80CCD(2) (employer NPS contribution) and 80CCH(2) (Agniveer Corpus Fund). It also forfeits HRA, LTA and Section 24(b) home loan interest on self-occupied property.

Why does my tax show ₹1 at ₹5,00,001 of income?

Marginal relief under Section 87A. The rebate is engineered so that crossing the ₹5L (old) or ₹7L (new) threshold by a few rupees does not trigger the entire slab tax. Your tax cannot exceed the amount by which your income exceeds the threshold.

Can I switch regimes every year?

Yes, salaried individuals may switch between regimes every assessment year via Form 10-IEA. Business or professional income holders get only one chance to opt out of the new regime; switching back is a one-time choice.

How accurate is this calculator?

Every result is computed with high-precision decimal arithmetic so totals are accurate to the rupee. Our test suite asserts every slab boundary, rebate edge, surcharge marginal-relief point, and the Health & Education Cess against published Income Tax India examples. Eleven scenario fixtures and 500+ property-based fast-check assertions run on every commit.

Sources

• Income Tax Act 1961 — current consolidated text including Finance Act 2024 amendments (incometaxindia.gov.in)
• Budget 2024 explanatory memorandum — standard deduction, 87A rebate, surcharge rationalisation
• Budget 2023 — new-regime surcharge cap at 25%, default-regime change
• CBDT Notification on Form 10-IEA regime-switch procedure

Disclaimer. MoneyKit results are for informational purposes only and should not be construed as financial or tax advice. Actual tax depends on your full income profile, deductions claimed, residency status, and any special incomes (capital gains, crypto, lottery, foreign sources). Consult a qualified Chartered Accountant before filing your return.