Understanding Income Tax in India (FY 2026-27)

Navigating the Indian tax system can be tricky, especially with the parallel existence of the Old Tax Regime and the New Tax Regime. Our calculator helps you visualize exactly how much tax you owe under both systems so you can make an informed choice and maximize your in-hand salary.

Old Regime vs. New Regime

The primary difference lies in deductions. The Old Regime allows you to claim around 70 exemptions (like HRA, Section 80C, 80D, etc.) to lower your taxable income. The New Regime offers much lower tax slab rates but removes almost all deductions.

What is the Standard Deduction?

For salaried individuals, a standard deduction of ₹50,000 is available under the Old Regime. Under the New Regime, this standard deduction has been increased to ₹75,000.

How is Tax Calculated?

Tax is calculated progressively across income slabs. Additionally, a 4% Health and Education Cess is applied to the final tax amount.

Frequently Asked Questions

Which tax regime should I choose?

If you have significant investments (like PPF, ELSS, Life Insurance) and pay house rent or a home loan, the Old Regime might save you more money. If you prefer a higher in-hand salary without locking up money in investments, the New Regime is usually better. Use our calculator above to find your exact mathematical winner.

What is Rebate under Section 87A?

This is a tax relief provided to individuals with lower incomes. If your taxable income is up to ₹5,00,000 (Old Regime) or ₹7,00,000 (New Regime), you get a full rebate, meaning your tax liability becomes zero.