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Income Tax — Old vs New Regime
FY 2025-26 (AY 2026-27) · calc.finlane
| Particulars | Old % | Old ₹ | New % | New ₹ |
|---|---|---|---|---|
| Gross Income | ₹12,00,000 | ₹12,00,000 | ||
| Standard Deduction | −₹50,000 | −₹75,000 | ||
| Total Deductions | −₹50,000 | −₹75,000 | ||
| Taxable Income | ₹11,50,000 | ₹11,25,000 | ||
| Tax Slabs | ||||
| Up to ₹2.5L | Nil | 0 | ||
| ₹2.5L – ₹5.0L | 5% | ₹12,500 | ||
| ₹5.0L – ₹10.0L | 20% | ₹1,00,000 | ||
| Above ₹10.0L | 30% | ₹45,000 | ||
| Up to ₹4.0L | Nil | 0 | ||
| ₹4.0L – ₹8.0L | 5% | ₹20,000 | ||
| ₹8.0L – ₹12.0L | 10% | ₹32,500 | ||
| ₹12.0L – ₹16.0L | 15% | 0 | ||
| ₹16.0L – ₹20.0L | 20% | 0 | ||
| ₹20.0L – ₹24.0L | 25% | 0 | ||
| Above ₹24.0L | 30% | 0 | ||
| Less: Rebate u/s 87A | 0 | −₹52,500 | ||
| Surcharge | 0 | 0 | ||
| Health & Education Cess (4%) | ₹6,300 | 0 | ||
| Total Tax Payable | ₹1,63,800 | 0 |
India offers two income tax regimes — the Old Regime and the New Regime — and the choice between them can save you lakhs every year. Income up to FY 2025-26 is governed by the Income-tax Act, 1961; the Income-tax Act, 2025 applies to income from FY 2026-27 (1 April 2026) onward. The slabs and deductions differ by year — this calculator uses the rules for the tax year you select above.
The New Tax Regime has lower slab rates across 7 brackets (0% to 30%) but strips away most deductions. The Old Tax Regime uses 4 broader slabs with higher rates but unlocks 17+ deductions — including 80C, HRA, 80D, NPS, and home loan interest.
Since FY 2023-24, the New Regime is the default. To use the Old Regime, you must actively inform your employer.
Same for all ages. 7 slabs with progressive rates. For FY 2024-25 (AY 2025-26) the New Regime used a different 6-slab structure (Nil up to ₹3L, then bands at ₹7L / ₹10L / ₹12L / ₹15L) with a ₹25,000 rebate up to ₹7L — select that year above to compute it.
Higher exempt threshold for senior (₹3L) and super senior (₹5L) citizens.
It depends entirely on your deductions. If your combined deductions (80C + HRA + 80D + NPS + home loan) cross a threshold, Old Regime saves more. For most employees earning under ₹12 lakh, the New Regime results in zero tax thanks to the Section 87A rebate.
A tax rebate for resident individuals below a threshold. Under New Regime, taxable income up to ₹12,00,000 qualifies for a rebate of up to ₹60,000 — resulting in zero slab tax. Under Old Regime, the threshold is ₹5,00,000 with a max rebate of ₹12,500.
Important: This rebate does not apply to capital gains (LTCG under 112A, STCG under 111A) or lottery/gaming income. NRIs are not eligible.
Very few deductions survive in the New Regime. The notable ones: standard deduction of ₹75,000 (vs ₹50,000 in Old), Employer NPS 80CCD(2) up to 14% of basic salary — this is the only major deduction in both regimes — and let-out property home loan interest (though loss set-off against salary is not allowed).
An additional tax on high-income earners above ₹50 lakhs. Rates range from 10% to 37% in Old Regime, capped at 25% in New Regime. Capital gains surcharge is always capped at 15%. Marginal relief prevents your total tax from exceeding your extra income above the threshold.
A mandatory 4% charge on your total tax (including surcharge) to fund public healthcare and education. Applies to every taxpayer in both regimes, regardless of income level.
Yes — this is 100% legal and one of the most effective HRA strategies. You claim HRA exemption under Old Regime while your parents declare the rental income in their ITR, often at a lower tax bracket. Requirements: genuine rent agreement, bank transfers (not cash), and landlord PAN if annual rent exceeds ₹1 lakh.
The Old Regime lets you claim deductions and exemptions; the New Regime offers lower slab rates but removes most of them. Under the Old Regime you reduce taxable income using 80C, 80D, HRA, home-loan interest and more. The New Regime skips almost all of these in exchange for wider, lower-taxed slabs and a higher standard deduction. This calculator computes both and shows which leaves you paying less.
The Old Regime is the long-standing system; the New Regime was introduced in Budget 2020 (effective FY 2020-21). The New Regime was optional at first. In Budget 2023 (effective FY 2023-24) it was made the default, its slabs were widened, and a standard deduction was added. Budget 2025 further revised the New Regime slabs and raised the Section 87A rebate. The Old Regime rates have stayed broadly unchanged throughout.
If you do not choose, the New Regime applies automatically — it is the default. Since FY 2023-24, every taxpayer is placed under the New Regime unless they actively opt for the Old Regime. Salaried employees can opt for the Old Regime each year when filing; those with business income must file Form 10-IEA to opt out and can switch back only once. If you never act, you are taxed under the New Regime by default.
Select the financial year in which you earned the income you are filing for. The financial year (FY) is the earning year; the assessment year (AY) is the following year when you file and it is assessed — AY is always FY plus one. For example, income earned in FY 2024-25 is filed in AY 2025-26. This calculator labels both so you can match whichever your ITR form or documents use.
Yes, salaried employees can switch every year. Inform your employer before the start of the financial year. Self-employed individuals can only switch once in their lifetime.
Not always. If your total deductions (HRA + 80C + 80D + home loan) exceed approximately ₹5 lakh, Old Regime may save more. The breakeven depends on your income level. Use this calculator to compare with your actual numbers.
Possibly yes — ₹12 lakh is the zero-tax rebate limit, not the filing trigger. The Section 87A rebate can make tax nil up to ₹12 lakh (New Regime), but the obligation to file is set by the basic exemption limit (₹4 lakh New / ₹2.5 lakh Old). You must also file if your employer deducted TDS and you want a refund, or if you have capital gains, foreign income, or income from multiple sources.
For AY 2026-27 (income earned in FY 2025-26), July 31, 2026 for most individuals. This covers ITR-1 and ITR-2. Business income (ITR-3, ITR-4, non-audit) has a deadline of August 31, 2026. If a tax audit is required, the deadline is October 31, 2026.
You will pay a late filing penalty of ₹5,000 under Section 234F. If your income is below ₹5 lakh, the penalty is reduced to ₹1,000. You also lose the ability to carry forward capital losses to future years.
No, Section 87A rebate is only for resident individuals. Non-residents cannot claim this benefit under either the Old or New tax regime.
If your total deductions are modest, the New Regime with its lower slab rates is usually the better choice.
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