ReckonBoxHow the income tax calculator works
Income tax in India can be worked out under two regimes, the old one with its many deductions and the new one with lower rates but almost none, and this calculator runs both for you and shows which comes out cheaper. You enter your gross income, your age group, and your old-regime deductions, and it returns the tax under each regime for AY 2026-27, the saving, and a line-by-line breakdown that includes the marginal relief step most tools hide.
The default shows how close it can be. On a Rs 15,00,000 salary with Rs 4,75,000 of deductions, the old regime taxes you Rs 1,24,800 while the new regime asks Rs 97,500, so the new regime saves Rs 27,300 even with the deductions stacked in the old regime's favour. That result surprises people, and it's exactly why running the numbers beats guessing.
The new regime slabs for AY 2026-27
The new regime is the default regime, with a flat Rs 4,00,000 basic exemption for every age and rates that climb in Rs 4,00,000 steps. There are no age brackets here, and the slabs are unchanged for AY 2027-28, so the same table serves both years.
| Taxable income | Rate |
|---|---|
| Up to Rs 4,00,000 | Nil |
| Rs 4,00,001 to Rs 8,00,000 | 5% |
| Rs 8,00,001 to Rs 12,00,000 | 10% |
| Rs 12,00,001 to Rs 16,00,000 | 15% |
| Rs 16,00,001 to Rs 20,00,000 | 20% |
| Rs 20,00,001 to Rs 24,00,000 | 25% |
| Above Rs 24,00,000 | 30% |
A salaried person also gets a Rs 75,000 standard deduction here, larger than the old regime's Rs 50,000, which is one reason the new regime wins so often.
The old regime slabs, and why your age matters
The old regime keeps the exemptions and deductions, but its basic exemption depends on your age, which the new regime ignores entirely. A senior citizen starts paying tax later, and a super senior later still.
| Age group | Basic exemption | Then |
|---|---|---|
| Below 60 | Rs 2,50,000 | 5% to 5L, 20% to 10L, 30% above |
| Senior, 60 to 80 | Rs 3,00,000 | 5% to 5L, 20% to 10L, 30% above |
| Super senior, above 80 | Rs 5,00,000 | 20% to 10L, 30% above |
These three brackets exist only in the old regime. Pick your age group in the calculator and it applies the right exemption to the old-regime figure while leaving the new-regime number on its flat Rs 4,00,000.
The 87A rebate and the 12 lakh cliff
The Section 87A rebate wipes out your tax entirely below a threshold: up to Rs 12,00,000 of taxable income in the new regime, and up to Rs 5,00,000 in the old. So a new-regime salary that lands at Rs 12,00,000 or under pays no tax at all, and the rebate does not extend to income taxed at special rates such as capital gains.
Just above that Rs 12,00,000 line, marginal relief takes over. Without it, a taxable income of Rs 12,25,000 would carry a slab tax of Rs 63,750, a huge jump for Rs 25,000 of extra income. Marginal relief caps the tax at that Rs 25,000 of excess before the 4% cess, so the total is Rs 26,000, and the calculator shows the relief as its own row so you can see the mechanism rather than a black-box figure.
Which deductions survive in the new regime
The trade at the heart of the choice is simple: the new regime gives lower rates and drops most deductions, while the old regime keeps the deductions and charges more. This calculator prices that trade with your actual numbers.
| Kept in the new regime | Dropped in the new regime |
|---|---|
| Standard deduction Rs 75,000 | 80C (PPF, ELSS, EPF, LIC) |
| Employer NPS, 80CCD(2) | 80D health insurance |
| Home loan interest on a let-out property | HRA and self-occupied 24(b) interest |
| The 87A rebate | 80E, 80G, 80TTA, LTA |
The old regime allows all of it. That's why a taxpayer with a home loan, a full 80C, and health insurance can still find the old regime cheaper, and why the only reliable answer is to compute both.
Old or new: reading the comparison
The tool states which regime is lower for the numbers you enter, and by how much, as a fact about those inputs. It's not telling you which to elect. A worked case makes the point: on a Rs 10,00,000 salary with Rs 1,00,000 of 80C and Rs 25,000 of health insurance, the old regime tax is Rs 80,600 while the new regime is nil under the rebate. Change the deductions and the answer can flip, since the old regime only pulls ahead once your deductions clear a break-even that rises with income.
Your real return may also carry income the tool does not model, so treat its figure as a strong estimate for a straightforward salary, and confirm the final call with a qualified chartered accountant.
What this does not cover
This calculator handles salary and ordinary income under both regimes, with the standard deduction, the common Section 80 deductions, the 87A rebate, surcharge above Rs 50,00,000, marginal relief and the 4% cess. It does not compute your HRA exemption from rent and salary for you, so enter that figure in the other-deductions field, and it does not handle capital gains taxed at special rates, business income, or clubbing of income. Tax rules change with each Budget and your own situation can shift the result, so this is a planning tool, not tax advice. For a return that matters, have a chartered accountant review it.
Frequently asked questions
What does this income tax calculator do? This calculator works out your income tax under both the old and the new regime for AY 2026-27, and shows which is lower and by how much. On a Rs 15,00,000 salary with Rs 4,75,000 of deductions, the new regime tax is Rs 97,500 against Rs 1,24,800 in the old, so the new regime saves Rs 27,300.
Which regime is better, old or new? Whichever produces the lower tax for your own income and deductions, which is exactly what this tool computes. The new regime has lower slab rates and a larger standard deduction but drops most exemptions, so it tends to win unless your old-regime deductions are large, and the answer flips at a break-even level of deductions that depends on your income.
What are the new regime tax slabs for AY 2026-27? Income up to Rs 4,00,000 is nil, then 5% to Rs 8,00,000, 10% to Rs 12,00,000, 15% to Rs 16,00,000, 20% to Rs 20,00,000, 25% to Rs 24,00,000, and 30% above Rs 24,00,000. The basic exemption is a flat Rs 4,00,000 for every age, and the slabs are unchanged for AY 2027-28.
What are the old regime slabs and how does age matter? In the old regime the basic exemption depends on age: Rs 2,50,000 below 60, Rs 3,00,000 for a senior citizen aged 60 to 80, and Rs 5,00,000 for a super senior above 80. Above the exemption it is 5% up to Rs 5,00,000, 20% up to Rs 10,00,000, and 30% beyond, and these age brackets exist only in the old regime.
What is the Section 87A rebate in each regime? The Section 87A rebate makes your tax nil up to a threshold: in the new regime it is up to Rs 60,000 when taxable income is Rs 12,00,000 or less, and in the old regime up to Rs 12,500 when taxable income is Rs 5,00,000 or less. The rebate does not apply to income taxed at special rates, such as capital gains.
What is marginal relief on the 12 lakh cliff? Marginal relief stops a small rise in income above Rs 12,00,000 from triggering a large tax, by capping the tax so it never exceeds the income earned above that line. On a Rs 12,25,000 taxable income the slab tax is Rs 63,750, but marginal relief caps it at Rs 25,000 before the 4% cess, which is why the breakdown shows a marginal-relief row.
What deductions can I still claim in the new regime? The new regime keeps the Rs 75,000 standard deduction, the employer NPS contribution under 80CCD(2), and home loan interest on a let-out property, but drops 80C, 80D, HRA, self-occupied home loan interest, 80E, 80G and 80TTA. The old regime allows all of these, which is the trade this calculator prices out.
Does the calculator include surcharge and cess? Yes, it adds the 4% health and education cess on every result, and the surcharge that applies above Rs 50,00,000 of income, at 10% to 37% with the new regime capped at 25%. Marginal relief on the surcharge thresholds is applied too, so the figures hold at high incomes.