📋 Income Tax Calculator — FY 2026-27 (New vs Old Regime)
📌 FY 2026-27 Update: New regime is default. Zero tax up to ₹12L income (rebate u/s 87A). Standard deduction ₹75,000. No changes from Budget 2026 for salaried individuals.
Gross Income₹ —
Standard Deduction₹ —
Other Deductions (Old Regime)₹ —
Taxable Income₹ —
Income Tax (before cess)₹ —
Rebate u/s 87A₹ —
Health & Education Cess (4%)₹ —
Total Tax Payable₹ —
Effective Tax Rate—
Monthly In-Hand (approx)₹ —
Income Tax in India FY 2026-27 — Complete Guide
For FY 2026-27 (Assessment Year 2027-28), the Union Budget 2026 brought no changes to income tax slabs or deductions — the same structure that was established by Budget 2025 continues. The New Tax Regime is the default regime; salaried employees must explicitly opt out to use the Old Regime. The most significant feature: income up to ₹12 lakh is effectively tax-free under the New Regime thanks to the ₹60,000 rebate under Section 87A.
New Tax Regime Slabs FY 2026-27
| Income Slab | Tax Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
✅ Zero Tax up to ₹12 Lakh: Standard deduction ₹75,000 reduces taxable income to ₹11.25L for a ₹12L salary. Rebate u/s 87A (max ₹60,000) wipes out the remaining tax. Effectively, salaried individuals earning up to ₹12.75 lakh pay ZERO income tax under the New Regime.
Old Tax Regime Slabs FY 2026-27
| Age Group | Basic Exemption | Slabs |
|---|---|---|
| Below 60 | ₹2.5 lakh | 2.5L–5L: 5% | 5L–10L: 20% | Above 10L: 30% |
| Senior (60–80) | ₹3 lakh | 3L–5L: 5% | 5L–10L: 20% | Above 10L: 30% |
| Super Senior (80+) | ₹5 lakh | 5L–10L: 20% | Above 10L: 30% |
New Regime vs Old Regime — Who Benefits from Which?
| Annual Income | New Regime Tax | Old Regime (max deductions) | Better Option |
|---|---|---|---|
| Up to ₹7.5 lakh | ₹0 | ₹0 (with 80C) | New (simpler) |
| ₹10 lakh | ₹45,500 | ~₹20,000 (with 80C+HRA) | Old (with deductions) |
| ₹12 lakh | ₹0 (rebate) | ~₹83,200 | New (zero tax!) |
| ₹15 lakh | ₹1,04,000 | ~₹1,17,000 (typical deductions) | New (usually) |
| ₹20 lakh | ₹2,34,000 | ~₹2,57,000 (typical deductions) | New |
| ₹30 lakh+ | High | High (but lower with max deductions) | Old (with HRA+80C+24b) |
The general rule: for most salaried individuals in the ₹7.5L–₹15L range, the New Regime is now more beneficial. The Old Regime benefits mainly those with very high deductions — typically homeowners paying heavy EMI interest (Section 24b), those in high-rent metros claiming large HRA exemptions, and those maximising all 80C instruments.
Key Deductions — Old Regime Only
| Section | Purpose | Maximum Limit |
|---|---|---|
| 80C | PPF, ELSS, LIC, NSC, 5-yr FD, home loan principal | ₹1,50,000 |
| 80D | Health insurance premium | ₹25,000 (₹50,000 for senior citizens) |
| 24(b) | Home loan interest (self-occupied) | ₹2,00,000 |
| 80CCD(1B) | NPS Tier I additional contribution | ₹50,000 |
| 80E | Education loan interest | No limit (8 years) |
| 10(13A) | HRA exemption (salaried, in rented home) | Actual calculation (metro/non-metro) |
| Standard Deduction | Flat deduction for salaried (both regimes) | ₹75,000 |
Income Tax FAQs
Q. Can I switch between Old and New Regime every year?
Salaried individuals (no business income) can switch between Old and New Regime every year when filing ITR. You inform your employer at the start of the year which regime you want for TDS deduction. If you have business income, you can switch out of New Regime only once in your lifetime — after which you're stuck in the Old Regime for business purposes.
Q. What is marginal relief for income just above ₹12 lakh?
Marginal relief prevents a situation where earning ₹1 more makes you worse off after tax. For example, at ₹12.01 lakh income, the tax computed is significant (beyond the rebate limit) — but marginal relief ensures your tax never exceeds the amount by which income exceeds ₹12 lakh. So at ₹12.5 lakh, tax is roughly ₹50,000 (not the full slab computation), making your net income still reasonable. The calculator handles this automatically.
Q. How does the new Income Tax Act 2025 affect FY 2026-27?
The Income Tax Act 2025 (replacing the 1961 Act) came into effect from April 1, 2026. However, for AY 2026-27 (income earned in FY 2025-26, ITR due July 2026), the old 1961 Act applies. For FY 2026-27 (income earned April 2026 onwards), the new 2025 Act applies. The tax slabs, rates, and major deductions remain unchanged in the new Act — it's primarily a consolidation and simplification exercise, not a rate change.