Compare your income tax under the old and new tax rules, side by side. Enter your yearly income and deductions to see which one saves you more money.
Deductions and the standard deduction are taken away from your income to find your taxable income.
Tax is worked out slab by slab. Each slab only taxes the part of your income that falls in it, not your whole income.
If your taxable income is at or below the rebate limit (₹12 lakh new rules, ₹5 lakh old rules), you pay zero tax under Section 87A.
If your income is just a little above that limit, a rule called marginal relief caps your tax, so crossing the limit by ₹1 does not suddenly cost you a lot.
A 4% health and education cess is added on top of the tax.
The old rules allow more deductions. The new rules have lower rates but fewer deductions.
Taxable income: Gross income − deductions − standard deduction
Tax: Sum of tax across each applicable slab
87A marginal relief: If taxable income is just above the rebate limit, tax is capped at the excess over that limit
Total payable: Tax + surcharge + 4% health & education cess
India lets individuals choose between two ways of calculating income tax. The new regime has lower slab rates, a larger standard deduction and a larger rebate, but allows very few deductions. The old regime has higher rates but lets you subtract investments and expenses such as 80C savings, your own extra NPS contribution, health insurance and HRA. This calculator works out the tax both ways, including rebate, cess and surcharge, and tells you which is cheaper for your income.
Every salaried person faces this choice when declaring investments to the employer and again when filing the return. The calculator is useful for employees, pensioners and professionals alike. It answers the question that decides thousands of rupees each year: given my income and the deductions I really claim, which regime leaves me with more money?
1. Start with your gross taxable income for the year from all heads.
2. Old regime: subtract the standard deduction and your eligible deductions, with 80C capped at ₹1,50,000 and your own extra NPS contribution capped at ₹50,000 as the calculator applies them.
3. New regime: subtract only the standard deduction.
4. Apply each regime's slabs to its taxable income, band by band, and add up the tax.
5. If taxable income is within the rebate limit, the rebate cancels the tax. In the new regime, just above the limit, marginal relief caps the tax at the income above the limit. The old regime has no such relief.
6. Add surcharge if income is high enough, then add 4% health and education cess on tax plus surcharge.
7. Compare the two totals; the lower one is the regime to choose.
A slab rate applies only to the part of income that falls inside that band. In the new regime as the calculator applies it, the first ₹4 lakh of taxable income is taxed at nil, the next ₹4 lakh at 5%, the next ₹4 lakh at 10%, and so on up to 30% above ₹24 lakh. Crossing into a higher slab raises the tax on the extra rupees only. That is why earning more never leaves you with less after tax under the slabs themselves.
The rebate removes the entire tax for taxable income up to a limit, ₹12 lakh in the new regime and ₹5 lakh in the old regime as configured here. Without a softening rule, a person earning ₹1 more than the limit would suddenly owe the full slab tax. In the new regime, marginal relief fixes this by capping the tax at the amount by which income exceeds the limit, and the relief fades a little above the limit once normal slab tax falls below that excess. The old regime rebate has no marginal relief, so crossing ₹5 lakh of taxable income brings in the full slab tax.
The old regime has higher rates, so it wins only when deductions are large enough to cut taxable income a lot. The break-even depends on income. A person with a home loan, full 80C, the extra NPS deduction, health insurance and a large HRA exemption may pay less under the old regime. A person with only EPF and a small insurance premium usually does better under the new one. The only reliable way to know is to compute both, which is what this page does.
Nikhil earns ₹18,00,000 a year. He invests the full ₹1,50,000 under 80C, puts ₹50,000 extra into NPS and pays ₹25,000 for family health insurance. He wants to know which regime costs him less.
Gross income: ₹18,00,000
80C investments: ₹1,50,000
Extra NPS (80CCD(1B)): ₹50,000
Other deductions: ₹25,000
Year: Tax Year 2026-27 slabs
Old regime taxable income = 18,00,000 − 50,000 standard deduction − 2,25,000 deductions = ₹15,25,000.
Old regime slab tax = 5% of 2,50,000 + 20% of 5,00,000 + 30% of 5,25,000 = 12,500 + 1,00,000 + 1,57,500 = ₹2,70,000. Cess 4% = ₹10,800. Total ₹2,80,800.
New regime taxable income = 18,00,000 − 75,000 standard deduction = ₹17,25,000.
New regime slab tax = 5% of 4,00,000 + 10% of 4,00,000 + 15% of 4,00,000 + 20% of 1,25,000 = 20,000 + 40,000 + 60,000 + 25,000 = ₹1,45,000. Cess 4% = ₹5,800. Total ₹1,50,800.
Difference = 2,80,800 − 1,50,800 = ₹1,30,000 in favour of the new regime.
Answer: Old regime ₹2,80,800; new regime ₹1,50,800. The new regime saves ₹1,30,000.
Applying the top slab rate to the whole income instead of slab by slab.
Claiming deductions such as 80C or HRA under the new regime, which does not allow them.
Counting 80C investments above the ₹1,50,000 cap.
Forgetting the 4% cess, which makes the estimate slightly low.
Choosing a regime when your employer asks for the yearly declaration.
Estimating advance tax for freelancers and professionals.
Seeing whether a new investment or insurance premium changes which regime is cheaper.
Checking the tax figure before filing the return.
Why doesn't my tax jump straight to full slab tax the moment I earn ₹1 over ₹12 lakh?
Section 87A has a special rule for exactly this. Once your income crosses the limit, your tax (before cess) is capped at the extra amount over that limit — not the full slab tax. For example, at ₹12,10,000 income, tax before cess is only ₹10,000, not ₹51,500. This rule fades out and stops applying by around ₹12.75 lakh.
Which regime should I choose?
It depends on how many deductions you can claim. If you have big deductions — like home loan interest, 80C savings, or HRA — the old rules often work out better. If you claim few deductions, the new rules usually save more. Compare both before deciding.
How do tax slabs actually work?
Slab by slab. If income above ₹10 lakh is taxed at 30%, only that part above ₹10 lakh is taxed at 30% — not your whole income. Moving into a higher slab never reduces your take-home pay.
Is this an official government calculator?
No. This is an independent estimate based on published tax rates. For filing your return, always use the official Income Tax Department website or ask a tax expert.
Where does NPS fit into this — why is it separate from my other 80C investments?
Your own NPS contribution has two parts. Up to ₹1,50,000 counts toward the same Section 80C cap as PPF, ELSS, and EPF — no extra benefit there beyond that shared limit. But Section 80CCD(1B) gives you a genuinely separate additional deduction of up to ₹50,000 for extra NPS contribution, on top of the 80C cap. So the total you can claim from NPS-related deductions (combined with other 80C instruments) is up to ₹2,00,000, not ₹1,50,000 — this calculator's 80C and NPS fields are kept separate specifically so you don't lose track of that extra ₹50,000. Both only apply under the Old Regime; the New Regime doesn't allow this personal NPS deduction at all (though your employer's own NPS contribution on your behalf, under Section 80CCD(2), is allowed in both regimes).