For a salary of ₹15 lakh with ₹1.5 lakh in 80C, ₹25,000 in 80D and ₹1.2 lakh of HRA, the new regime costs ₹97,500 and the old regime ₹1,65,360. This compares both regimes for FY 2026-27 and says which saves more.
What this calculates
Enter your annual salary, other income and the deductions you would claim, and this works out the tax under the old and the new regime side by side: taxable income, slab tax, the section 87A rebate, surcharge and 4% cess, with a line-by-line table. It assumes a resident individual under 60. The slabs and limits come from the Income Tax Department, and they are reviewed every Budget.
The formula
Taxable income
salary − standard deduction (− HRA − 80C − 80D − home loan interest, old regime only) + other incomeTax
slab tax − 87A rebate + surcharge + 4% cess on the twoThe new regime's slabs are nil to ₹4 lakh, then 5%, 10%, 15%, 20%, 25% and 30% at ₹8 lakh, ₹12 lakh, ₹16 lakh, ₹20 lakh and ₹24 lakh. The old regime's are nil to ₹2.5 lakh, then 5% to ₹5 lakh, 20% to ₹10 lakh and 30% above. The standard deduction is ₹75,000 in the new regime and ₹50,000 in the old.
Worked example
On a salary of ₹12,75,000 the new regime costs nothing, and on ₹13,00,000 marginal relief holds the tax to ₹26,000.
When to use it, and the mistakes to avoid
Use it to choose a regime each year, to see what a deduction is worth, or to estimate tax before you file.
The mistakes that cost the most:
- Assuming the old regime always wins. Without large deductions the new regime is usually cheaper, and it is nil up to ₹12.75 lakh of salary.
- Claiming old-regime deductions in the new regime. HRA, 80C, 80D and home loan interest are not allowed there.
- Entering the HRA you receive. Enter the tax-free part, worked out with the HRA calculator.
- Ignoring other income. Interest and rent are taxed at slab rates and have no standard deduction.
- Treating this as a filing. Capital gains, senior-citizen slabs and some deductions are not modelled.
FAQ
Which is better, the old or the new tax regime?
It depends on your deductions. The new regime has lower slabs and no deductions apart from the standard deduction, so it usually wins unless you claim a lot of HRA, 80C, 80D and home loan interest. Enter your numbers and the calculator shows both and says which saves more.
Is income up to ₹12 lakh tax-free?
In the new regime, yes: a rebate under section 87A of up to ₹60,000 means no tax on taxable income up to ₹12 lakh, which is a salary of ₹12.75 lakh after the ₹75,000 standard deduction. Just above that limit, marginal relief keeps the tax from exceeding the income over ₹12 lakh. The old regime's rebate is ₹12,500 up to ₹5 lakh and has no relief above it.
Which deductions can I claim in the new regime?
Only the standard deduction of ₹75,000 on salary is modelled here. HRA exemption, 80C, 80D and home loan interest on a self-occupied home are old-regime deductions. Some other deductions, such as the employer's NPS contribution, are allowed in the new regime too but are not modelled.
How do I enter my HRA exemption?
Work out the tax-free part of your HRA for the year with the HRA calculator and enter that amount. It counts only in the old regime.
What are surcharge and cess?
Cess is 4% of your tax plus surcharge, for health and education. Surcharge is an extra percentage on the tax of high earners: 10% above ₹50 lakh, 15% above ₹1 crore, 25% above ₹2 crore, and 37% above ₹5 crore in the old regime. The new regime stops at 25%. Marginal relief means crossing a threshold never costs more than the income earned above it.