Income Tax Calculator (India)
Compare New vs Old Tax Regime for FY 2026-27 with Section 87A rebate
Income & Deductions
Statutory Tax Disclaimer: This calculation is for informational and planning purposes based on Indian Income Tax rates for Financial Year 2026-27. It does not substitute professional chartered accountant advice. Always verify with the Income Tax Department portal (incometax.gov.in) before filing your ITR.
How Does It Work?
Calculate Indian Income Tax for FY 2026-27. Side-by-side comparison of New Tax Regime (Section 115BAC with ₹75,000 standard deduction) vs Old Tax Regime (80C, 80D, HRA).
Includes Section 87A rebate offering zero tax up to ₹7 Lakhs taxable income in the New Regime.
Real-World Worked Example
A salaried employee with an annual gross salary of ₹12,50,000 compares New vs Old regimes for FY 2026-27. Deductions: ₹1.5L in 80C, ₹25k in 80D, and ₹1L in HRA.
- •New Regime: Standard deduction is ₹75,000. Taxable income = ₹11,75,000. Total tax payable = ₹79,300 (including 4% cess).
- •Old Regime: Deductions = ₹50,000 (std) + ₹1,50,000 (80C) + ₹25,000 (80D) + ₹1,00,000 (HRA) = ₹3,25,000. Taxable income = ₹9,25,000. Total tax payable = ₹1,01,400.
- •Regime Winner: New Tax Regime saves the employee ₹22,100 in cash.
Takeaway: Unless total deductions in the Old Regime exceed approximately ₹3.75 Lakhs to ₹4.0 Lakhs, the New Regime provides lower tax liability with zero proof-submission burden.
Related Guides & Calculation Deep Dives
All guidesHRA Exemption Explained: How to Calculate It and Save Tax
Under Section 10(13A) and Rule 2A, your exempt HRA is the lowest of three statutory amounts: actual HRA received, 50% of basic salary in metro cities (40% in non-metros), or actual rent paid minus 10% of basic. For an employee with ₹50,000 monthly basic receiving ₹25,000 HRA and paying ₹20,000 rent in a metro, exempt HRA is ₹15,000 monthly (₹1,80,000/year). Assuming the top 30% tax slab (+ 4% cess), this saves ₹56,160 in tax, or ₹37,440 in the 20% slab.
TDS Explained: Rates, Sections and How to Claim It Back
Tax Deducted at Source (TDS) is an advance tax withholding mechanism where payers deduct tax before disbursing payments like salary, FD interest, or rent. Common statutory thresholds include ₹40000 for bank FD interest (Section 194A) and ₹240000 for annual rent (Section 194I). If excess TDS is deducted, you can claim a refund by filing your annual ITR.
Old vs New Tax Regime: How HRA, 80C and Standard Deduction Change the Answer
Under rules for FY 2026-27, the New Tax Regime offers a ₹75000 standard deduction and Section 87A tax rebate on eligible taxable income up to ₹700000. Check the current slabs on the Income Tax Department website to determine whether Old or New Regime is better for your salary and deductions.
Income Tax FAQs
Common questions, calculation formulas, and usage rules.
Under the Union Budget 2024, the standard deduction for salaried individuals in the New Tax Regime was increased to ₹75,000 (from ₹50,000).
With the ₹75,000 standard deduction and Section 87A rebate, salaried individuals with gross income up to ₹7,75,000 pay zero tax.