India income tax calculator

India runs two tax systems at once, and you pick one

Since the new regime under section 115BAC became the default, every salaried taxpayer in India is choosing between two complete systems rather than filling in one. That choice is worth more than any deduction inside either of them.

The new regime has seven slabs from 0% to 30%, an exempt band up to ₹4,00,000, and a standard deduction of ₹75,000 — and almost no other deductions. The old regime has four slabs, an exempt band of only ₹2,50,000, and the entire catalogue India is known for: 80C, 80D, house rent allowance, home loan interest.

Neither is universally better, which is why this page computes both. At ₹15,00,000 the new regime costs ₹97,500 and the old one ₹2,57,400 before any deductions are claimed. The old regime only catches up once you can claim ₹5,43,750 of deductions — below that, it is simply more expensive.

That break-even figure is the number to plan around. Someone paying rent in a metro, servicing a home loan and maxing 80C may clear it easily; someone with a plain salary and a provident fund contribution will not come close.

And the choice is not permanent for everyone. A salaried taxpayer can generally switch between regimes year to year, while someone with business income faces tighter restrictions on going back — which is worth knowing before treating the decision as reversible.

Why ₹12.75 lakh is a magic number, and ₹12.76 lakh is not

The section 87A rebate wipes out the tax entirely for anyone whose taxable income is at or below ₹12,00,000 under the new regime — up to ₹60,000 of tax cancelled outright.

Add the ₹75,000 standard deduction and that means a salary of ₹12,75,000 produces exactly ₹0 of tax. Not a low bill: none.

Then it stops. At ₹12,85,000 the rebate is gone entirely and the bill jumps to ₹63,960 — a cliff, not a taper. Earning ₹10,000 more leaves you materially worse off on the face of the arithmetic.

In practice a provision called marginal relief smooths that step, so nobody actually loses money by crossing it. This calculator does not model marginal relief, which is why the figures just above the threshold here are the unsmoothed ones — and why the page says so rather than quietly interpolating.

The planning consequence is real either way: for anyone within touching distance of ₹12,75,000, a deduction or an exemption that pulls taxable income back under ₹12,00,000 is worth far more than its face value, because it recovers the whole rebate.

The tax is not the last line

Two things sit on top of the slab calculation, and a calculator that stops at the slabs understates every bill.

The health and education cess is 4% of the tax plus any surcharge, in both regimes, at every income. It is not optional, not phased, and not large — but it is the reason a figure computed from the slab table alone is always about 4% short.

The surcharge starts above ₹50,00,000 of income: 10% between ₹50,00,000 and ₹1,00,00,000, 15% to ₹2,00,00,000, and 25% above that. The old regime goes further, to 37% above ₹5,00,00,000, while the new regime caps it at 25% — which is a substantial argument for the new regime at very high incomes that has nothing to do with the slabs.

Note what the surcharge applies to: it is a percentage of the tax, not of the income. A 15% surcharge on a ₹20,00,000 tax bill is ₹3,00,000, not 15% of the salary.

Marginal relief exists on the surcharge too, preventing the thresholds from costing more than the income that crossed them. As with the rebate, it is not modelled here.

What the old regime is actually for

The old regime survives because of what it lets you subtract, and the list is long enough that for some households it still wins comfortably.

Section 80C covers up to ₹1,50,000 across provident fund, life insurance premiums, ELSS funds, principal repayment on a home loan, children's tuition and a few others. It is the single largest item and the one most people fill first.

House rent allowance is the one that decides it for renters in expensive cities, because the exemption scales with rent actually paid and with the metro classification. Home loan interest under section 24(b) adds up to ₹2,00,000 for a self-occupied property. Section 80D covers health insurance premiums, and 80CCD(1B) adds a further tier for the national pension scheme.

Stack those and the deductible total can pass ₹4,00,000 for a household with a mortgage in a metro. That is well past the break-even against the new regime at most incomes, and it is exactly the household the old regime is now for.

Which is why the honest answer to "which regime is better" is a question rather than a number: what do you actually claim? This page computes both sides so the comparison is against your real figure rather than a generic one.

Five ways an Indian tax estimate goes wrong

Stopping at the slabs. The 4% cess is always on top, in both regimes. A figure taken from a slab table alone is short by that much at every income.

Confusing the rebate with an exemption. Section 87A cancels tax, it does not exempt income. It is why ₹12,75,000 produces zero tax while the slab table clearly shows tax due on that income.

Using gross CTC instead of salary. Cost to company includes the employer's provident fund contribution and often gratuity, which are not your taxable salary. Entering CTC overstates the bill.

Assuming the old regime is better because it has deductions. It only wins if you claim enough of them. At ₹15,00,000 the break-even is ₹5,43,750 — below that the new regime is simply cheaper.

Reading a figure for the wrong year. The financial year runs 1 April to 31 March, and the assessment year is the year you file in. Slabs changed materially in recent years, so a page that does not name its year is unusable.

Where these figures come from

Every slab, the rebate, the surcharge scale and the cess were read off the Income Tax Department's own pages on 2026-09-02: Income Tax Department — Salaried Individuals for AY 2026-27 (slabs, rebate, surcharge, cess). The standard deduction comes from the CBDT's ITR-1 validation rules for the same assessment year.

The year matters more here than in most systems. India has changed slabs, the standard deduction and the rebate limit repeatedly in recent budgets, and each change was substantial rather than an inflation adjustment — so a page written for a previous year is not slightly stale, it is describing a different system.

The figures are for FY 2025-26 (AY 2026-27). The Indian financial year runs 1 April to 31 March. The assessment year is the year you file in.

What is not modelled is stated under the calculator rather than buried: Marginal relief on the section 87A rebate is not modelled. Just above ₹12,00,000 of taxable income the figures here show the full jump; in practice relief smooths it, so the real bill in that narrow band is lower than shown. Under the old regime it applies only the standard deduction. Chapter VI-A deductions — 80C, 80D, 80CCD — house rent allowance and home loan interest are not included, and they are the entire reason anyone stays on that regime. Marginal relief on the surcharge above ₹50 lakh is not modelled either.

The arithmetic is deterministic. The AI on this site explains figures it is given and never produces one — in India as in every other country here.

CTC is not your salary, and the gap is large

An Indian offer is usually quoted as cost to company, and CTC includes several things that never reach you and are not your taxable salary. Entering it into a calculator overstates the bill every time.

The employer's provident fund contribution is part of CTC and is not your income. Gratuity provisioning is part of CTC and you may never receive it. Some employers include the cost of insurance premiums and even the cess they pay on your behalf.

What you want is gross salary — basic, allowances and any bonus actually payable — before your own deductions. Your own provident fund contribution does come out of that, and under the old regime it counts toward the ₹1,50,000 of section 80C.

The structure of the package matters under the old regime and barely matters under the new one. House rent allowance, leave travel allowance and several exempt components only reduce tax if you are on the old regime; on the new regime they are simply salary.

That is a real consequence of the regime choice that people miss: an offer structured to be tax-efficient under the old rules delivers no advantage at all under the new ones, so a package negotiated for its composition rather than its total may now be worth less than it looks.

TDS, and why your first payslips look wrong

Tax is deducted at source through the year by the employer, who estimates your annual liability and spreads it across twelve months. Nothing is withheld against income the employer does not know about.

At the start of the financial year your employer asks which regime you want and what deductions you intend to claim. That declaration drives the deduction for the whole year — and if you declare investments you never make, the shortfall lands in the final months as a much larger deduction.

That is why March payslips are so often smaller. The employer reconciles what was declared against what was actually proved, and recovers any shortfall before the year closes on 31 March.

Income the employer cannot see — interest, rent received, capital gains, freelance work — carries no deduction at all, and the responsibility for paying tax on it through advance tax instalments is yours. Missing them carries interest under sections 234B and 234C.

Form 26AS and the annual information statement show what has actually been reported against your PAN. Checking them before filing catches the two common problems: an employer's deduction not credited, and income you had forgotten that the department already knows about.

How the Indian system compares with the others here

This site covers the United States, the United Kingdom, India and Australia, and India is structurally the odd one out in two ways.

It is the only one with two live systems. Everywhere else there is one schedule and the choice is which deductions to claim. In India the choice is which tax code to be governed by, and it is made annually.

It is the only one where a rebate produces a cliff. The UK has its 60% band from a taper, the US has phase-outs that taper. India's section 87A stops outright at ₹12,00,000, and it takes a separate provision — marginal relief — to stop that being punitive.

There is no sub-national income tax. Unlike the US with fifty-one jurisdictions or the UK with Scotland, Indian states do not levy income tax. Professional tax exists in some states but it is small and capped, not a second schedule.

And the cess is unusual: a flat 4% surcharge on the tax itself, applied at every income including the lowest that pay anything. Most systems fund health and education from general revenue rather than from a visible levy on the tax bill.

The levers that actually move an Indian tax bill

Under the new regime there are very few, which is the point of it: lower rates in exchange for a simpler return. The standard deduction is automatic, and beyond the employer's contribution to the national pension scheme under 80CCD(2) there is little to claim.

Under the old regime the levers are substantial and they stack. Section 80C to ₹1,50,000, section 80CCD(1B) for an additional national pension scheme tier, section 80D for health insurance covering yourself and your parents, house rent allowance scaled to rent actually paid, and home loan interest under section 24(b) to ₹2,00,000.

The arithmetic that decides is the break-even: how much you must claim before the old regime beats the new one. At ₹15,00,000 of salary that figure is on this page, computed rather than estimated, and it moves with income.

The one mistake worth naming: buying an investment purely to fill 80C while on the new regime. It does nothing at all — the deduction does not exist there — and it is a decision people make out of habit from the old system.

And the timing matters. Deductions are claimed for the financial year in which the payment was made, so an investment made on 1 April counts for the year that has just begun rather than the one that just ended.

Filing, and the deadlines that carry a cost

The return is filed online through the Income Tax Department's own portal, and for a salaried taxpayer with one employer and no other income it is short: most of it is pre-filled from what the employer and your bank have already reported.

The ordinary deadline is 31 July following the financial year, for taxpayers who do not require an audit. Filing late carries a fee under section 234F and interest under 234A on any unpaid tax, and it also restricts the ability to carry forward certain losses.

Form 16 from your employer is the starting document: it shows salary paid, deductions claimed and tax deducted at source. Reconciling it against Form 26AS and the annual information statement is the step that catches the two common errors — a deduction not credited, and income the department already knows about that you had forgotten.

The regime is chosen at filing for a salaried taxpayer, which means a declaration made to your employer in April is not binding on the return. If the other regime turns out better once the year's actual numbers are known, you can switch when you file.

A revised return is available for a period after the original, and an updated return exists beyond that with additional tax attached. Both are far easier than dealing with a notice, which is what an unreconciled mismatch eventually produces.

Questions

Is ₹12 lakh really tax-free in India?

Under the new regime, yes — up to ₹12,00,000 of taxable income, because the section 87A rebate cancels up to ₹60,000 of tax. With the ₹75,000 standard deduction that means a salary of ₹12,75,000 produces no tax at all. Above it the rebate stops, though marginal relief smooths the step.

Which regime should I choose, new or old?

It depends entirely on what you claim. At ₹15,00,000 the new regime costs ₹97,500 against ₹2,57,400 for the old one before deductions, and the old regime only catches up once you claim ₹5,43,750 of deductions. Rent in a metro plus a home loan plus 80C can clear that; a plain salary usually cannot.

What is the health and education cess?

A flat 4% charged on your income tax plus any surcharge, in both regimes and at every income level. It is not optional and not phased in, which is why a figure computed from the slab table alone is always about 4% short.

When does the surcharge apply?

Above ₹50,00,000 of income: 10% to ₹1,00,00,000, 15% to ₹2,00,00,000, and 25% above that. The old regime goes to 37% above ₹5,00,00,000 while the new regime caps at 25%. It is a percentage of the tax, not of the income.

Can I switch regimes each year?

A salaried taxpayer generally can. Someone with business or professional income faces tighter restrictions on switching back once they have opted out, so it is worth confirming your position before treating the choice as reversible.

What tax year do these figures cover?

FY 2025-26 (AY 2026-27). The Indian financial year runs 1 April to 31 March. The assessment year is the year you file in. India has changed slabs, the standard deduction and the rebate limit repeatedly in recent budgets, so figures for an adjacent year describe a materially different system rather than a slightly different one.