Income Tax Calculator

Which tax year and slabs are built into this tool?

The tool is labelled FY 2026-27 and uses the figures built into it: new regime nil to ₹4,00,000, then 5%, 10%, 15%, 20%, 25% in ₹4,00,000 steps and 30% above ₹24,00,000; old regime nil to ₹2,50,000, 5% to ₹5,00,000, 20% to ₹10,00,000 and 30% above. Rules change in most Union Budgets and these tables are not updated automatically, so the Income Tax Department or a chartered accountant governs what you owe.

How is tax computed under each regime?

The tool subtracts the standard deduction if you are salaried (and your typed deductions in the old regime), runs the taxable amount through the slabs, applies the rebate rule, adds any surcharge, and finally adds 4% cess on tax plus surcharge. Self-employed is treated as having no standard deduction in either regime.

How does the rebate work in the tool?

New regime: tax is nil when taxable income is ₹12,00,000 or less. Above that, the tool caps the tax at the amount by which taxable income exceeds ₹12,00,000, so a few thousand rupees of extra income does not trigger the full slab tax at once. A salaried gross of ₹12,75,000 shows ₹0, ₹12,80,000 shows ₹5,200 and ₹13,75,000 shows ₹78,000. Old regime: tax is nil at ₹5,00,000 taxable or less, and the full slab tax applies above it with no relief; a salaried gross of ₹5,50,000 with no deductions shows ₹0 and ₹5,55,000 shows ₹14,040.

How is surcharge calculated?

Surcharge is a percentage of the tax once taxable income passes a threshold: 10% above ₹50,00,000, 15% above ₹1,00,00,000, 25% above ₹2,00,00,000, and 37% above ₹5,00,00,000 in the old regime only, because the new-regime rate stops at 25%. Marginal relief limits tax plus surcharge to what was due at the threshold plus the income above it. Cess of 4% is then charged on tax plus surcharge. A self-employed ₹50,25,000 shows ₹11,49,200 (new) and ₹13,91,000 (old); ₹1,01,00,000 shows ₹30,55,520 and ₹33,21,500.

What goes in the deductions field?

One amount that applies only to the old regime. The tool subtracts it, along with the ₹50,000 standard deduction for salaried users, from gross income. It does not cap the amount or check which sections it comes from, so total your own deductions first.

What is left out?

Special-rate income such as capital gains and dividends is not modelled, so mixed or very high incomes are only approximated. Senior-citizen slabs, employer NPS, TDS already paid, advance tax and interest are not included either. The monthly take-home figure is gross minus computed tax divided by 12, with no provident fund or payroll items removed.

What does Better option mean when the two taxes are equal?

The tool names the new regime when its tax is less than or equal to the old-regime tax, and the saving shown is the absolute difference. At zero income both are ₹0 and the output reads New regime saves ₹0.