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Income Tax Calculator

Calculate and compare your income tax under the Old and New Tax Regimes for Tax Year 2026-27, including deductions, HRA exemption, and marginal relief.

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Indian Income Tax Tax Year: 2026-27
Taxpayer Profile & Period Income Tax Act, 2025
Tax Year 2026-27 (Current) Active
Income earned 01-Apr-2026 to 31-Mar-2027
Residential Status
Rebates & senior slabs apply to residents
Age Bracket
Salaried Individual or Pensioner? Standard deduction: ₹75,000 (New) / ₹50,000 (Old)
Annual Salary / Primary Income Gross (p.a.)
₹
₹0 ₹10L ₹25L ₹50L
Presets:
Tax Summary (2026-27) New Regime Lower
New Regime
₹0
Effective 0.00%
Old Regime
₹0
Effective 0.00%
Evaluating Comparison...

Tax Liability Comparison
New Regime Tax Slabs (Default) Tax Year 2026-27
Slab Rate Taxable Tax
Old Regime Tax Slabs (Opt-Out) Legacy Structure
Slab Rate Taxable Tax
Authoritative Tax Knowledge Hub

Indian Income Tax Guide for Tax Year 2026-27

Effective 01 April 2026, the Income Tax Act, 2025 establishes a modernized, simplified direct tax framework for Tax Year 2026-27 (covering income earned between 01 April 2026 and 31 March 2027). Under this framework, the New Tax Regime is the statutory default regime for all individual taxpayers, Hindu Undivided Families (HUFs), Association of Persons (AOPs), and Bodies of Individuals (BOIs). Taxpayers retain the statutory option to opt into the Old Tax Regime during return filing if their eligible exemptions and deductions yield a lower total tax liability.

New Tax Regime Slabs

The New Regime features 7 structured tax slabs: 0% up to ₹4 Lakh, 5% from ₹4L to ₹8L, 10% from ₹8L to ₹12L, 15% from ₹12L to ₹16L, 20% from ₹16L to ₹20L, 25% from ₹20L to ₹24L, and 30% on taxable income exceeding ₹24 Lakh. Salaried taxpayers and pensioners enjoy an enhanced standard deduction of ₹75,000.

Section 87A & Marginal Relief

Resident individuals whose net taxable income does not exceed ₹12,00,000 receive a full tax rebate under Section 87A up to ₹60,000, reducing their net income tax to exactly ₹0. For taxable income marginally above ₹12 Lakh, marginal relief prevents a sudden tax cliff by capping payable tax to the income exceeding ₹12 Lakh.

Old Regime Opt-Out Option

Taxpayers who maintain substantial deductions can opt for the Old Regime. It offers a ₹50,000 standard deduction, Section 80C investments up to ₹1,50,000, Section 80D health insurance up to ₹25,000 (₹50,000 for seniors), Section 24(b) home loan interest up to ₹2,00,000, and Section 10(13A) House Rent Allowance (HRA) exemptions.

Tax Year 2026-27 Slabs & Statutory Deductions Breakdown

The Income Tax Act, 2025 delivers wider tax brackets under the New Regime compared to earlier assessment years. Below is the comprehensive slab schedule and comparison between both regimes:

Taxable Income Slab New Tax Regime Rate Old Tax Regime (Below 60) Old Tax Regime (Senior 60–79) Old Tax Regime (Super Sr 80+)
₹0 – ₹2,50,000 0% (Nil) 0% (Nil) 0% (Nil) 0% (Nil)
₹2,50,001 – ₹3,00,000 0% (Nil) 5% 0% (Nil) 0% (Nil)
₹3,00,001 – ₹4,00,000 0% (Nil) 5% 5% 0% (Nil)
₹4,00,001 – ₹5,00,000 5% 5% 5% 0% (Nil)
₹5,00,001 – ₹8,00,000 5% 20% 20% 20%
₹8,00,001 – ₹10,00,000 10% 20% 20% 20%
₹10,00,001 – ₹12,00,000 10% 30% 30% 30%
₹12,00,001 – ₹16,00,000 15% 30% 30% 30%
₹16,00,001 – ₹20,00,000 20% 30% 30% 30%
₹20,00,001 – ₹24,00,000 25% 30% 30% 30%
Above ₹24,00,000 30% 30% 30% 30%
• Standard Deduction: ₹75,000 (New Regime) vs ₹50,000 (Old Regime) for salaried employees and pensioners.
• Health & Education Cess: 4% levied on total income tax plus applicable surcharge across both regimes.
• Section 87A Rebate Limit: Up to ₹60,000 (taxable income ≤ ₹12,00,000 in New) vs up to ₹12,500 (taxable income ≤ ₹5,00,000 in Old).
• High-Income Surcharge Cap: Surcharge is capped at 25% under the New Regime, whereas the Old Regime reaches up to 37% above ₹5 Crore.

Worked Example 1: Resident Salaried Earner at ₹15,00,000 Annual Salary

Consider a resident salaried individual below age 60 earning a gross annual CTC of ₹15,00,000. Under the Old Regime, the employee invests ₹1,50,000 in Section 80C (PPF, ELSS, EPF) and pays ₹25,000 for health insurance under Section 80D. Here is the step-by-step computation:

New Tax Regime (Default) Recommended
  • Gross Salary: ₹15,00,000
  • Less Standard Deduction u/s 16(ia): - ₹75,000
  • Net Taxable Income: ₹14,25,000
  • • ₹0 – ₹4,00,000 @ 0%: ₹0
  • • ₹4,00,001 – ₹8,00,000 @ 5%: ₹20,000
  • • ₹8,00,001 – ₹12,00,000 @ 10%: ₹40,000
  • • ₹12,00,001 – ₹14,25,000 @ 15%: ₹33,750
  • Base Tax Payable: ₹93,750
  • Section 87A Rebate (Income > ₹12L): ₹0
  • Health & Education Cess (4%): ₹3,750
  • Total Tax Liability: ₹97,500
  • Effective Tax Rate: 6.50%
Old Tax Regime (Opt-Out) With 80C & 80D
  • Gross Salary: ₹15,00,000
  • Less Standard Deduction: - ₹50,000
  • Less Section 80C Deductions: - ₹1,50,000
  • Less Section 80D Medical Insurance: - ₹25,000
  • Net Taxable Income: ₹12,75,000
  • • ₹0 – ₹2,50,000 @ 0%: ₹0
  • • ₹2,50,001 – ₹5,00,000 @ 5%: ₹12,500
  • • ₹5,00,001 – ₹10,00,000 @ 20%: ₹1,00,000
  • • ₹10,00,001 – ₹12,75,000 @ 30%: ₹82,500
  • Base Tax Payable: ₹1,95,000
  • Health & Education Cess (4%): ₹7,800
  • Total Tax Liability: ₹2,02,800
  • Effective Tax Rate: 13.52%
Net Tax Savings with New Regime: ₹1,05,300 per year (₹8,775 extra take-home pay every month). Save 51.9% Tax

Worked Example 2: Section 87A Zero-Tax Threshold & Marginal Relief Mechanics

Under Tax Year 2026-27 rules, understanding the boundary at ₹12,00,000 taxable income is essential for every salaried professional:

Scenario A: Gross Salary ₹12,75,000 (Zero-Tax Ceiling)

1. Gross salary is ₹12,75,000. Applying the ₹75,000 standard deduction yields a net taxable income of exactly ₹12,00,000.
2. Slab tax computation: ₹0 on first ₹4L + ₹20,000 (5% on ₹4L–₹8L) + ₹40,000 (10% on ₹8L–₹12L) = ₹60,000 Base Tax.
3. Section 87A Rebate: Because taxable income does not exceed ₹12,00,000, the individual receives a full rebate of ₹60,000.
4. Final Tax Outgo = ₹0.

Zero Net Tax Liability

Scenario B: Gross Salary ₹12,85,000 (Marginal Relief)

1. After ₹75,000 standard deduction, taxable income is ₹12,10,000 (₹10,000 above the ₹12L threshold).
2. Normal slab tax would be ₹60,000 + 15% of ₹10,000 = ₹61,500.
3. Without marginal relief, earning ₹10,000 extra would cost ₹61,500 in tax (a ₹51,500 net loss).
4. Marginal Relief Applied: Section 87A caps base tax to the exact excess income (₹10,000). Total tax = ₹10,000 + 4% Cess = ₹10,400.

Relief Saved: ₹51,500
1

Profile & Salary

Enter age group, residential status, and gross annual CTC or professional receipts.

2

Incomes & Deductions

Declare rental income, capital gains, Section 80C, 80D, 80CCD(2), home loan interest, and HRA.

3

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Review instant side-by-side ledgers, effective tax rates, and export tax reports as PDF or Image.

Tax Disclaimer: This calculator provides an accurate computational estimate based on Tax Year 2026-27 rules codified under the Income Tax Act, 2025. Tax liability can vary depending on specific income streams, classification of capital gains, special-rate provisions, clubbing of income, and applicable surcharge caps. Figures generated are for informational and financial planning purposes only and do not constitute formal tax or legal advice. Verify your final tax liability with official Income Tax Department e-filing utilities or a qualified chartered accountant. EasyToolio is an independent utility and is not affiliated with the Government of India or the Income Tax Department.

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Income Tax Formula

Income tax is computed progressively based on income tax slabs. Taxpayers can choose between the Old Regime (which allows major de...

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Income Tax Frequently Asked Questions (Tax Year 2026-27)

01

What is the standard deduction for salaried taxpayers and pensioners in Tax Year 2026-27?

Under the New Tax Regime, the statutory standard deduction for salaried individuals and pensioners is ₹75,000 (Section 16(ia)). Under the Old Tax Regime, the standard deduction remains ₹50,000. Family pensioners receive a standard deduction of ₹25,000 under the New Regime and ₹15,000 under the Old Regime.

02

How does the Section 87A rebate make salary up to ₹12.75 Lakh completely tax-free?

For resident individuals under the New Tax Regime, Section 87A provides a full rebate of up to ₹60,000 on taxable income up to ₹12,00,000. A salaried employee earning a gross salary of ₹12,75,000 subtracts the ₹75,000 standard deduction to arrive at exactly ₹12,00,000 taxable income. The slab tax of ₹60,000 is 100% eliminated by the ₹60,000 rebate, resulting in zero tax liability.

03

What is marginal relief under Section 87A and how does it prevent a tax penalty on small salary increments?

Marginal relief ensures that earning slightly more than the ₹12,00,000 rebate threshold does not trigger a disproportionate tax bill. If net taxable income exceeds ₹12,00,000, Section 87A statutory relief caps the base tax payable so it cannot exceed the exact amount by which taxable income exceeds ₹12,00,000. For instance, at ₹12,10,000 taxable income (excess of ₹10,000), base tax is restricted to ₹10,000 rather than the regular slab tax of ₹61,500.

04

Can I claim HRA, home loan interest, and Section 80C under the New Tax Regime?

No. Under the New Tax Regime, Chapter VI-A itemized deductions (such as Section 80C for PF/ELSS/life insurance up to ₹1.5L, Section 80D for medical insurance, and Section 80TTA for savings bank interest) and Section 10 exemptions (including House Rent Allowance u/s 10(13A) and Leave Travel Concession) are disallowed. Self-occupied home loan interest under Section 24(b) cannot be deducted against salary in the New Regime.

05

Which deductions ARE permitted under the New Tax Regime?

The New Tax Regime permits: (1) Standard deduction of ₹75,000 for salaried employees and pensioners, (2) Employer contribution to National Pension System (NPS) under Section 80CCD(2) up to 14% of Basic + DA, (3) Transport allowance for specially-abled employees, (4) Conveyance and tour allowances for official duty, and (5) Deduction for additional employee cost under Section 80JJAA.

06

What is the difference between Previous Year/Assessment Year and "Tax Year" under the Income Tax Act, 2025?

Under the modernized Income Tax Act, 2025 effective 01 April 2026, the dual terminology of "Previous Year" (year of earning) and "Assessment Year" (year of filing) has been streamlined into a single unified concept: "Tax Year". For example, Tax Year 2026-27 directly denotes the financial period 01 April 2026 to 31 March 2027 in which income is earned and assessed.

07

How much total deduction is required in the Old Regime to beat the New Regime at ₹15 Lakh income?

At ₹15 Lakh gross salary, a taxpayer under the New Regime incurs ₹97,500 total tax. To achieve an identical or lower tax outgo under the Old Regime, the taxpayer must claim at least ₹4,25,000 in total deductions (e.g., ₹50k standard deduction + ₹1.5L 80C + ₹50k 80CCD(1B) NPS + ₹25k 80D + ₹1.5L HRA or Section 24b home loan interest). If total eligible deductions are less than ₹4.25 Lakh, the New Regime is financially superior.

Good to know

Questions, answered

Quick answers about how this tool works.

For Tax Year 2026-27, the statutory standard deduction for salaried employees and pensioners is ₹75,000 under the New Tax Regime and ₹50,000 under the Old Tax Regime.

The New Tax Regime is the default statutory framework in India for Tax Year 2026-27 under the Income Tax Act, 2025. Taxpayers who wish to file under the Old Tax Regime must exercise the opt-out option when filing their return.

Under the New Tax Regime for Tax Year 2026-27, resident individuals with net taxable income not exceeding ₹12,00,000 receive a tax rebate under Section 87A up to ₹60,000, reducing their net tax liability to ₹0.

Marginal relief ensures that for taxable income marginally exceeding ₹12,00,000, the calculated tax does not exceed the exact income earned above ₹12 Lakh. For example, on a taxable income of ₹12,50,000, the tax liability is capped at ₹50,000 instead of the standard slab tax of ₹67,500.

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