Which tax regime applies by default for Tax Year 2026-27?

The new regime under section 202 of the Income-tax Act, 2025 applies by default. An individual must exercise the option under section 202(4) to be taxed under the old regime.

Is income up to Rs 12 lakh tax-free under the new regime?

For a resident individual, the section 156 rebate of up to Rs 60,000 removes the tax where total income does not exceed Rs 12 lakh. A salaried resident can therefore earn up to Rs 12.75 lakh of salary with nil tax after the Rs 75,000 standard deduction. The rebate does not apply to special-rate income such as certain capital gains, and it is not available to non-residents.

Can a salaried employee switch regimes every year?

An individual without business or professional income can choose the regime each year when filing the return. An individual with business or professional income can opt out of the new regime by the return due date and can withdraw that option only once.

Which deductions are still available under the new regime?

The Rs 75,000 standard deduction on salary and the employer's NPS contribution (up to 14% of salary under section 124) remain available. Most other deductions, including the section 123 basket, health insurance under section 126, HRA and the self-occupied home-loan interest, are not available.

TAX YEAR 2026-27 · INCOME-TAX ACT, 2025

Old or new tax regime? Compare it on your own figures.

Enter your salary and the deductions you actually have. The calculator applies the section 202 slabs, the section 156 rebate, surcharge with marginal relief and 4% cess under both regimes, then shows the break-even point and the deduction limits you have not used.

Rates checked against incometaxindia.gov.in on 16 October 2026Calculated in your browser. Nothing you enter is sent or stored.

1 · About you

2 · Income for the year

Gross salary

₹

Total salary before any exemption, as per Form 16 or your CTC less employer PF and gratuity.

Basic + DA

₹

Used for HRA and the employer-NPS limit. If blank, we assume 50% of gross salary.

Other income taxed at normal rates

₹

Bank and FD interest, net rent, freelance profit. Leave out capital gains on shares and mutual funds, which are taxed at special rates.

3 · Exemptions (old regime only)

The new regime ignores these. Fill them in only if they apply to you.

HRA received

₹

Rent paid for the year

₹

City you rent in

Professional tax paid

₹

₹2,500 a year in Maharashtra for most salaried employees.

Home-loan interest, self-occupied house

₹

4 · Deductions

Section 123 investments (old 80C)

₹

Your EPF, PPF, ELSS, life cover, home-loan principal, children's tuition fees.

Your own NPS, s.124(3)

₹

Over and above the ₹1.5 lakh basket.

Employer's NPS contribution

₹

Allowed in both regimes: 14% of Basic + DA under the new regime, 10% under the old (14% for Government employers).

Health insurance, self & family

₹

Health insurance, parents

₹

A parent is 60 or above (limit rises to ₹50,000)

Other old-regime deductions

₹

Education-loan interest, eligible donations, savings-account interest and similar, at the amount you can actually claim.

THE WORKING

How each figure is built up.

Old regime
Particulars	₹
Tax payable	₹0

New regime (s.202)
Particulars	₹
Tax payable	₹0

Old-regime deduction limits: what you have used and what is left
Limit	Used	Unused

Slab rates for Tax Year 2026-27

Budget 2026 left the rates unchanged. From 1 April 2026 they sit in the Income-tax Act, 2025: the new regime in section 202(1) and the old regime in the Finance Act, 2026.

New regime, s.202(1)
Total income	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%

Old regime, resident below 60
Total income	Rate
Up to ₹2,50,000	Nil
₹2,50,001 – ₹5,00,000	5%
₹5,00,001 – ₹10,00,000	20%
Above ₹10,00,000	30%

Old regime: the nil band is ₹3 lakh for residents aged 60–79 and ₹5 lakh at 80 and above. Rebate u/s 156 is ₹60,000 up to ₹12 lakh (new) and ₹12,500 up to ₹5 lakh (old), for residents only. Surcharge is 10% above ₹50 lakh, 15% above ₹1 crore and 25% above ₹2 crore; 37% applies above ₹5 crore in the old regime only. Cess is 4%.

What each regime allows

Item	Old	New
Standard deduction on salary, s.19	₹50,000	₹75,000
Employer's NPS contribution, s.124(1)	10% of Basic + DA	14% of Basic + DA
Section 123 basket (old 80C)	₹1,50,000	Not allowed
Own NPS over the basket, s.124(3)	₹50,000	Not allowed
Health insurance, s.126	₹25,000 + ₹25,000 (₹50,000 each for seniors)	Not allowed
HRA exemption	Allowed	Not allowed
Home-loan interest, self-occupied	Up to ₹2,00,000	Not allowed
Professional tax	Allowed	Not allowed

When and how to choose

Salaried, no business income: tell your employer your preferred regime for TDS at the start of the year. You can still make the final choice when you file the return, and you can choose again every year.
Business or professional income: the new regime applies unless you opt out by the return due date under s.202(4). Once you opt out, you can withdraw that option only once, so treat it as a long-term decision.
Returns for FY 2025-26 filed during 2026 still follow the Income-tax Act, 1961 and its section numbers (80C, 80D, 115BAC). This calculator is for income earned from 1 April 2026.

Before you decide

Compare on the deductions you will genuinely have, not on targets. Locking money in a five-year product only to make the old regime win rarely pays.
Your EPF contribution already counts towards the ₹1.5 lakh basket, so many salaried people have less headroom than they think.
Asking your employer to route part of the salary into employer NPS lowers tax under both regimes, within the 14% limit.
Investment proofs usually go to the employer between January and March. A last-minute proof that is missed raises TDS, though you can still claim the deduction in the return.
Rent above ₹1 lakh a year needs the landlord's PAN for the HRA claim.

For a month-by-month plan to 31 March 2027 by situation (salaried, professionals, seniors, NRIs, families), read the tax-saving plan for Tax Year 2026-27.

Questions

Which regime applies if I do nothing?

The new regime. You must exercise the option under section 202(4) to be taxed under the old regime.

Is salary up to ₹12.75 lakh really tax-free?

For a resident individual with only normal-rate income, yes. Salary of ₹12.75 lakh less the ₹75,000 standard deduction gives total income of ₹12 lakh, and the s.156 rebate removes the tax. Above ₹12 lakh, marginal relief keeps the tax from exceeding the income above ₹12 lakh.

Does the calculator handle capital gains?

No. Gains on listed shares and equity funds and similar income are taxed at special rates, and the rebate does not apply to them. Enter only normal-rate income here and treat capital gains separately.

I am a non-resident. Does this work for me?

Yes, for normal-rate income. Select Non-resident: the s.156 rebate is removed, and the old regime uses the below-60 slabs whatever your age.

Is my data saved anywhere?

No. The calculation runs entirely in your browser. Nothing is sent to us or stored, unless you choose to contact the firm.

Sources and scope

General educational information for individuals with income at normal rates. It does not cover special-rate income, agricultural income, losses carried forward, clubbing, AMT or business-specific deductions. The result is an estimate based on the figures you enter and on the law as read on 16 October 2026; confirm your position on the facts before acting. Discuss your return with the firm.

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