Income Tax Calculator (New vs Old Regime)

Compare your tax liability under the revised New Tax Regime (Section 115BAC) and the Old Tax Regime for FY 2025-26. Identify which regime saves you more money based on your deductions and exemptions.

On an annual gross income of ₹12,00,000, tax under the New Regime is ₹0 (0% effective rate) compared to ₹1,63,800 under the Old Regime, saving ₹1,63,800 annually.

Income & Deductions

Calculate your income tax for FY 2025-26 (AY 2026-27) and compare the New Regime (Section 115BAC) against the Old Regime.

Gross Annual Income

₹

Total annual gross salary, professional fees, or taxable income before deductions.

Taxpayer Age Category

Old Regime Itemized Deductions

Optional

These deductions apply only under the Old Tax Regime. The New Regime gives a flat ₹75,000 standard deduction instead.

Section 80C (PPF, EPF, ELSS, Life Insurance)

₹

Statutory maximum limit is ₹1,50,000.

Section 80D (Health Insurance Premium)

₹

Up to ₹25,000 for self/family and up to ₹50,000 for senior parents.

Section 24(b) Home Loan Interest

₹

Maximum ₹2,00,000 for self-occupied residential property.

HRA Exemption under Section 10(13A)

₹

Calculate using CalcMate HRA Calculator or enter exempt allowance.

Section 80CCD(1B) Additional NPS

₹

Additional voluntary NPS contribution up to ₹50,000.

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New Tax Regime is Cheaper

You save ₹1,11,800 per year by opting for the New Tax Regime (Section 115BAC).

New Regime Tax

₹0

Effective tax rate: 0% (₹₹0/mo)

Old Regime Tax

₹1,11,800

Effective tax rate: 9.32% (₹₹9,317/mo)

Annual Tax Difference

₹1,11,800

Net savings with NEW regime

New Regime Standard Deduction

₹75,000

Statutory deduction revised in Finance Act 2024

New Regime Taxable Income

₹11,25,000

Section 87A rebate applies: ₹0 net tax!

Old Regime Total Deductions

₹2,25,000

₹₹50,000 std + ₹₹1,75,000 itemized

Side-by-Side Tax Comparison (FY 2025–26)

Head	New Regime	Old Regime
Gross Income	₹12,00,000	₹12,00,000
Standard Deduction	-₹75,000	-₹50,000
Itemized Deductions	N/A	-₹1,75,000
Net Taxable Income	₹11,25,000	₹9,75,000
Tax Before Rebate	₹52,500	₹1,07,500
Section 87A Rebate	-₹52,500	₹0
Health & Education Cess (4%)	₹0	₹4,300
Total Tax Payable	₹0	₹1,11,800

Best Choice: New Tax Regime

₹0

Saves ₹1,11,800 compared to Old Regime

Marginal relief is automatically factored into calculations when taxable income marginally exceeds the Section 87A threshold.

What it is:: An Indian income tax calculator comparing liability under the New and Old regimes.
What it calculates:: Total tax payable, net taxable income, slab-by-slab tax, Section 87A rebate, cess, and regime savings.

Key Assumptions

Assessment Year 2026–27 / FY 2025–26 tax slabs and provisions.
Salaried standard deduction of ₹75,000 (New) and ₹50,000 (Old).
Section 87A rebate applied up to statutory limits with marginal relief.
4% Health and Education Cess on final tax liability.

How it works

The New Tax Regime under Section 115BAC offers lower tax slabs and a salaried standard deduction of ₹75,000, but foregoes itemized deductions like Section 80C, 80D, and HRA.

The Old Tax Regime retains higher tax slab rates, but permits deductions under Section 80C (up to ₹1.5L), 80D (health insurance), Section 24(b) (home loan interest up to ₹2L), and Section 10(13A) (HRA).

Under the New Regime, resident individuals with taxable income up to ₹12,00,000 receive a full tax rebate up to ₹60,000 under Section 87A, resulting in zero net tax for salaried income up to ₹12,75,000.

A 4% Health and Education Cess applies to the aggregate of income tax and applicable surcharge under both regimes.

Formula

Tax Liability = Slab Tax - Section 87A Rebate + Surcharge + 4% Health & Education Cess

Slab Tax: = Progressive tax computed on net taxable income brackets
Section 87A: = Tax rebate up to ₹60,000 (New) or ₹12,500 (Old) for qualifying income
Cess: = 4% statutory health and education surcharge on tax payable

Budget 2025 New Regime slabs: 0–4L (Nil), 4–8L (5%), 8–12L (10%), 12–16L (15%), 16–20L (20%), 20–24L (25%), >24L (30%).

Example calculation

Gross Salary of ₹12,00,000: New vs Old Regime (FY 2025–26)

Gross Annual Income: ₹12,00,000
New Regime Standard Deduction: ₹75,000
New Regime Total Tax (4% Cess incl.): ₹0
Old Regime Deductions (Std + 80C + 80D): ₹2,25,000
Old Regime Total Tax: ₹1,11,800
Recommended Choice: New Tax Regime
Annual Tax Savings: ₹1,11,800

Frequently asked questions

What is the zero-tax income threshold under the New Tax Regime?

For salaried employees, gross income up to ₹12,75,000 attracts zero income tax under the New Regime. This is because the ₹75,000 standard deduction reduces taxable income to ₹12,00,000, where the Section 87A rebate fully absorbs the ₹60,000 tax liability.

Can I switch between the New and Old Tax Regimes every year?

Salaried individuals with no business or professional income can switch between the New and Old regimes every financial year while filing their ITR under Section 139(1). Individuals with business or professional income can switch to the Old Regime only once in their lifetime.

How much deductions do I need for the Old Regime to be better?

With the New Regime zero-tax threshold at ₹12,75,000 for salaried taxpayers, the Old Regime becomes beneficial only if your total itemized deductions (Section 80C, 80D, HRA, home loan interest) are substantial enough to pull your tax liability lower than the New Regime rate.

Is standard deduction available under the New Tax Regime?

Yes. The standard deduction under Section 16(ia) is ₹75,000 under the New Tax Regime for salaried employees and pensioners.

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Tools that complement this calculation.

Authoritative Sources

Income Tax Department of India (e-Filing Portal)· verified 1 October 2026
Central Board of Direct Taxes (CBDT) - Section 115BAC & Tax Rules· verified 1 October 2026

Reviewed by Pradipta Ray, Editor · Updated 1 October 2026