Which regime should I choose?

This calculator will not choose for you, but it will run both on your own numbers — use the regime scenario above. As a rule of thumb the answer turns on how much you can genuinely claim in deductions rather than on the headline rates, since the new regime's wider bands and larger rebate offset the deductions it forgoes.

Is this calculation accurate enough to file with?

No. It is an estimate from the figures you enter, and it omits capital gains, salary exemptions such as HRA, house property losses, per-section deduction caps, TDS and advance tax. Use it to plan and compare, and a return-filing utility or a professional to file.

Why is my tax zero at ₹12 lakh but not at ₹12.5 lakh?

The section 87A rebate removes the liability entirely up to a taxable income of ₹12,00,000 under the new regime. Above that the rebate falls away — but marginal relief caps the tax at roughly the income above the ceiling, so it rises gradually rather than jumping. This calculator applies that relief.

Why are my deductions being ignored?

Because you have the new regime selected, which does not allow them. The calculator flags this rather than quietly dropping the figure. Switch to the old regime to see what those deductions are worth.

Which financial year's rules does this use?

The one you select, and the calculator states it in the results and the working. The rules live in a versioned set, so choosing an earlier year applies that year's law rather than adjusting the current one.

How current are the rates?

The assumptions panel records the source for each figure and the date it was read. For FY 2026-27 some figures rest on a secondary source rather than a government publication, and the calculator says so. Confirm against the Income Tax Department's own material before relying on it for anything consequential.

Taxation · FINANCIAL TOOLS

Income Tax Calculator

Estimate your income tax under either regime, with the slab-by-slab working and the rules it used shown.

Understand the calculation

Calculation logic, formula, example and guardrails behind the estimate.

How it works

Your gross income is reduced by the standard deduction if you are salaried, and by the deductions you enter if you have chosen the old regime. What remains is taxable income.

That income is then run through the slabs for the financial year you selected. Each band taxes only the income falling inside it, which is why the effective rate is always below the top slab rate — a point the slab-by-slab table makes concrete.

More detail

The section 87A rebate is applied next, then surcharge if the income reaches those thresholds, then the health and education cess on the result. Marginal relief is applied where it bites, so a small rise in income can never cost a disproportionate amount of tax.

The rules for each financial year live in a versioned ruleset rather than in the calculator, so selecting a different year applies that year's law rather than adjusting this year's.

Once you know what tax takes, the savings rate calculator.

Formula

Tax = Σ (income in band × band rate) − 87A rebate + surcharge + cess

Marginal relief caps the tax where crossing the rebate ceiling or a surcharge threshold would otherwise cost more in tax than the extra income.

income in band: The part of taxable income falling within a given slab.
band rate: The marginal rate for that slab.
87A rebate: A rebate that removes the liability entirely below a ceiling — ₹60,000 up to ₹12,00,000 under the new regime.
surcharge: An additional charge on the tax itself at higher incomes.
cess: Health and education cess on tax plus surcharge.

Worked example

A salaried taxpayer with ₹20,75,000 of gross salary, no other income and no deductions, under the new regime for FY 2026-27.

01Standard deduction₹75,000
02Taxable income₹20,00,000
03First ₹4,00,000 at nil₹0
04₹4L–₹8L at 5%₹20,000
05₹8L–₹12L at 10%₹40,000
06₹12L–₹16L at 15%₹60,000
07₹16L–₹20L at 20%₹80,000
08Tax on slabs₹2,00,000
09Cess at 4%₹8,000
10Estimated total tax₹2,08,000

An effective rate of about 10% on ₹20.75 lakh, against a top slab rate of 20%. The gap is the whole point of a slab system, and it is why comparing marginal rates between regimes tells you very little on its own.

Important considerations

01
The rules used are shown, and where they came from
Tax law changes, so the calculator states which financial year's rules it applied and the assumptions panel records the source and the date it was read. Where a figure rests on a secondary rather than a government source, that is said explicitly rather than presented as official.
02
The effective rate is the number that matters
Your top slab rate applies only to your last rupees. On ₹20 lakh of taxable income under the new regime the top rate is 20% but the effective rate is around 10%. Comparing regimes or jobs on marginal rates alone is misleading.
03
Marginal relief removes the cliff at the rebate ceiling
Without relief, a taxable income of ₹12,10,000 would attract over ₹61,000 of tax where ₹12,00,000 attracts none. Relief caps the tax at the excess income. This calculator applies it, which is why the figure just above the ceiling looks small rather than punitive.
04
Regime choice usually turns on deductions, not rates
The new regime has wider bands and a larger rebate; the old one allows deductions the new one forgoes. Which costs less depends almost entirely on how much you can genuinely claim. The regime scenario runs both on your own figures.

Limitations

This is an estimate, not a tax computation. It does not handle capital gains, house property losses, HRA and other salary exemptions, or the eligibility conditions attached to each deduction.
Deductions are entered as a single figure. In reality each section has its own cap and conditions, and this calculator checks none of them.
TDS already deducted and advance tax paid are not considered, so this is a liability figure rather than an amount payable.
Rounding differs. Statutory computations round at prescribed points; this calculator rounds only for display, so a filed figure may differ slightly.

Frequently asked questions

Common questions about the income tax calculator and the assumptions behind it.

Next useful checks

Move from this result to the next decision without hunting through the full calculator list.

Old vs New Tax Regime CalculatorCompare regimes before relying on one tax estimate.HRA Exemption CalculatorCheck salary exemption before final tax planning.Capital Gains Tax CalculatorEstimate special-rate tax outside salary slabs.

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Disclaimer

This calculator is provided for general information and planning only. It is not investment, tax or legal advice, and it does not take your personal circumstances into account. Outputs are estimates based on the assumptions stated on this page, exclude taxes and charges unless said otherwise, and market-linked returns are not guaranteed — the value of investments can fall as well as rise. Lending terms, rates and eligibility are decided by the lender. For advice on your own situation, speak to a qualified professional, several of whom you can consult on Finvestalk.