Income Tax Calculator India — FY 2026-27
New Regime vs Old Regime comparison — find which saves you more tax
Why ₹12.75 Lakh Salary = Zero Tax in 2026 (And the Fine Print)
The headline sounds too good to be true: a salaried person earning ₹12.75 lakh pays zero income tax under the new regime for FY 2026-27. But it's real — and here's exactly how it works, step by step, on an actual salary slip:
- Gross salary: ₹12,75,000
- Minus standard deduction: ₹75,000 (available to all salaried/pensioners in new regime)
- Taxable income: ₹12,00,000
- Tax as per slabs: 5% on ₹4L–8L = ₹20,000 + 10% on ₹8L–12L = ₹40,000 = ₹60,000
- Section 87A rebate: ₹60,000 (available when taxable income ≤ ₹12 lakh)
- Tax after rebate: ₹0. Plus 4% cess on ₹0 = ₹0. Final tax: Zero.
The moment your salary exceeds ₹12.75 lakh gross (₹12 lakh taxable after ₹75K standard deduction), the 87A rebate disappears entirely and you pay full tax on the slab income above ₹12 lakh. Going from ₹12.75L to ₹13L costs you approximately ₹63,000 in sudden tax — a steep "cliff edge."
New Regime Tax Slabs — FY 2026-27 (AY 2027-28)
| Taxable Income | Tax Rate | Tax on This Slab |
|---|---|---|
| Up to ₹4,00,000 | 0% | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% | Up to ₹20,000 |
| ₹8,00,001 – ₹12,00,000 | 10% | Up to ₹40,000 |
| ₹12,00,001 – ₹16,00,000 | 15% | Up to ₹60,000 |
| ₹16,00,001 – ₹20,00,000 | 20% | Up to ₹80,000 |
| ₹20,00,001 – ₹24,00,000 | 25% | Up to ₹1,00,000 |
| Above ₹24,00,000 | 30% | 30% on excess |
Section 87A rebate: up to ₹60,000 for taxable income ≤ ₹12 lakh (new regime). Standard deduction ₹75,000 for salaried/pensioners. 4% health & education cess on final tax. No changes in Budget 2026.
Old Regime Tax Slabs — FY 2026-27
| Taxable Income | Below 60 | Senior (60–80) | Super Senior (80+) |
|---|---|---|---|
| Up to ₹2.5L / ₹3L / ₹5L | 0% | 0% | 0% |
| ₹2.5L–₹5L | 5% | 5% (above ₹3L) | 0% |
| ₹5L–₹10L | 20% | 20% | 20% |
| Above ₹10L | 30% | 30% | 30% |
Which Regime is Better? The Break-Even Math
The new regime wins at lower income (especially below ₹12L). The old regime can win at higher income only if your total deductions are large. The break-even deduction threshold for most salaried people is approximately ₹3.75–4.25 lakh. If your 80C + 80D + HRA + home loan interest + other deductions exceed this, the old regime may save more money.
| Gross Salary | New Regime Tax | Old Regime (full deductions) | Better Regime |
|---|---|---|---|
| ₹8,00,000 | ₹0 (87A rebate) | ₹28,600 approx | New Regime ✅ |
| ₹12,75,000 | ₹0 | ₹78,000 approx | New Regime ✅ |
| ₹15,00,000 | ₹1,17,000 approx | ₹1,54,700 approx (with max deductions) | New Regime ✅ |
| ₹20,00,000 | ₹2,34,000 approx | ₹2,70,400 approx (with max deductions) | New Regime ✅ |
| ₹30,00,000 | ₹5,46,000 approx | ₹4,82,000 approx (with max deductions) | Old Regime ✅ |
Approximate calculations. Include your actual deductions in the calculator above for precise comparison.