The calculator below uses the FY 2025-26 (AY 2026-27) slabs as announced in Union Budget 2025. Switch between new and old regime, toggle whether you’re salaried (for the standard deduction), and you’ll see the full breakdown — slabs, 87A rebate, surcharge, marginal relief and 4% cess — exactly as the Income Tax Department computes it.
The big change this year is that the new regime’s 87A rebate has been raised to ₹60,000, which means salaried individuals earning up to ₹12.75 lakh pay zero tax under the new regime. For most middle-income earners, the new regime now wins; the old regime only makes sense if your deductions (80C + 80D + HRA + home loan interest) cross roughly ₹4–4.5 lakh.
New regime tax slabs (FY 2025-26)
These are the slabs that apply automatically unless you specifically opt for the old regime. Standard deduction for salaried taxpayers under the new regime is ₹75,000.
| Income range | Tax rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Section 87A rebate: up to ₹60,000 if taxable income is ≤ ₹12,00,000. So a salaried person with ₹12.75 lakh gross income (₹12,75,000 − ₹75,000 std deduction = ₹12 lakh taxable) pays zero tax.
Old regime tax slabs (FY 2025-26)
The old regime is unchanged from previous years. Standard deduction for salaried is ₹50,000, and you can claim 80C (up to ₹1.5L), 80D, HRA, home loan interest u/s 24, NPS u/s 80CCD(1B), and a long list of other deductions.
| Income range | Tax rate |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Section 87A rebate under the old regime: ₹12,500 if taxable income ≤ ₹5,00,000. Senior citizens (60–80) get a higher exemption of ₹3 lakh; super seniors (80+) get ₹5 lakh.
Surcharge and cess (both regimes)
On top of the slab tax, a surcharge applies if your taxable income exceeds ₹50 lakh:
| Taxable income | Surcharge rate |
|---|---|
| ₹50L – ₹1 crore | 10% |
| ₹1 crore – ₹2 crore | 15% |
| ₹2 crore – ₹5 crore | 25% |
| Above ₹5 crore (new regime) | 25% |
| Above ₹5 crore (old regime) | 37% |
After the surcharge, Health and Education Cess at 4% applies to (tax + surcharge). The capped 25% for HNIs under the new regime is one of the reasons the new regime quietly favours high earners as well as middle earners.
Marginal relief at ₹12 lakh (new regime)
This is the trick that catches a lot of people. If you’re under ₹12 lakh, the rebate makes your tax zero. But if you earn ₹12,01,000, the rebate disappears and the full slab tax kicks in — without marginal relief, you’d pay roughly ₹61,650 on a ₹1,000 increase. That’s obviously absurd.
So the Income Tax Act provides marginal relief: at incomes just above ₹12 lakh, your total tax cannot exceed (taxable income − ₹12,00,000). The relief tapers off and stops mattering around ₹12,75,000 taxable income, where regular slab tax becomes lower than the excess. The calculator above already applies this — if you slide income from ₹12L to ₹13L you’ll see the relief in action.
Worked example: ₹15 lakh salaried, new regime
Take a typical product manager earning ₹15 lakh CTC in 2026.
- Gross income: ₹15,00,000
- Standard deduction (salaried, new regime): ₹75,000
- Taxable income: ₹14,25,000
Slab-wise tax:
| Slab | Amount in slab | Rate | Tax |
|---|---|---|---|
| 0 – 4L | ₹4,00,000 | 0% | ₹0 |
| 4L – 8L | ₹4,00,000 | 5% | ₹20,000 |
| 8L – 12L | ₹4,00,000 | 10% | ₹40,000 |
| 12L – 14.25L | ₹2,25,000 | 15% | ₹33,750 |
| Total | ₹93,750 |
87A rebate: ₹0 (taxable income > ₹12 lakh). Surcharge: ₹0 (taxable income < ₹50 lakh). Cess at 4%: ₹3,750.
Final tax: ₹97,500. Effective rate: 6.50% on gross income.
New vs old regime: when does old still win?
For the same ₹15 lakh salaried person, the old regime kicks in only if total deductions are large.
| Old-regime deductions | Old-regime tax | New-regime tax | Better |
|---|---|---|---|
| ₹0 (no deductions) | ₹2,55,840 | ₹97,500 | New |
| ₹1,50,000 (80C only) | ₹2,11,120 | ₹97,500 | New |
| ₹2,50,000 (80C + 80D + NPS) | ₹1,79,920 | ₹97,500 | New |
| ₹3,75,000 (80C + 80D + NPS + ₹2L home loan int.) | ₹1,40,920 | ₹97,500 | New |
| ₹4,50,000 (above + HRA) | ₹1,17,520 | ₹97,500 | New |
| ₹5,50,000 (max realistic stack) | ₹86,320 | ₹97,500 | Old |
For most salaried Indians the old regime now wins only if their total deductions cross roughly ₹4.75 lakh — which usually requires HRA in a metro plus a home loan plus NPS plus 80C plus 80D maxed. If you live in your own home and don’t take the home loan deduction, the new regime wins almost always.
Run your own numbers in both regimes using the calculator above. The cross-over moves slightly with income; at ₹10 lakh it’s lower, at ₹25 lakh it’s higher.
Frequently asked questions
Which regime is the default for FY 2025-26?
The new regime is the default. If you want to be taxed under the old regime, you must explicitly opt in while filing your ITR. Salaried employees can usually communicate this to payroll once a year so TDS is deducted under the right regime; otherwise you’ll get a refund or owe extra at filing time.
Can I switch between regimes every year?
Salaried individuals: yes, you can switch every year. Business income earners: you can opt out of new regime once, and once you do, you can return only once and stay there. Rules are tighter for self-employed taxpayers.
Does the new regime allow ANY deductions?
Yes, but very few: standard deduction (₹75,000 for salaried), employer’s NPS contribution u/s 80CCD(2), and a few others like family pension and Agniveer Corpus Fund. You cannot claim 80C, 80D, HRA exemption, home loan interest on self-occupied property, LTA, or most other common deductions under the new regime. That’s the trade-off for lower slab rates.
What about home loan interest in the new regime?
Self-occupied house: not allowed under new regime. Let-out (rental) property: home loan interest is still allowed against rental income under both regimes, even in the new regime. This is one of the few niche cases where landlords can still benefit.
Why does the calculator show 4% cess separately?
Because the Income Tax Department itself shows it separately on Form 26AS and the ITR. Cess is calculated on (tax + surcharge), not on taxable income, so it scales with everything else. The 4% rate has been unchanged since 2018.
Is the calculator accurate for HUF, NRIs and senior citizens?
For individuals below 60: yes, both regimes. For senior citizens (60–80) and super seniors (80+) under the old regime, the basic exemption is higher (₹3L and ₹5L respectively); the calculator uses the standard ₹2.5L exemption, so seniors will see a slightly higher tax under old regime than reality. NRIs are not eligible for the higher senior-citizen exemption regardless of age. The new regime’s slabs are the same for everyone.
What’s the difference between FY, AY and PY in tax filing?
FY (financial year) is the year you earn the income — FY 2025-26 means April 1, 2025 to March 31, 2026. AY (assessment year) is the year you file the return — AY 2026-27 covers FY 2025-26 income. PY (previous year) is just another name for FY. So if you’re filing in July 2026, you’re filing for FY 2025-26 / AY 2026-27. The calculator above is for that exact period.
Is presumptive taxation (44AD/44ADA) covered?
No. This calculator handles salary, business and pension income at the slab level. If you’re under 44AD (small business at 6%/8% deemed profit) or 44ADA (professionals at 50% deemed profit), compute your taxable income separately, then plug the deemed-profit number into this calculator’s “gross income” field — it will then apply slabs correctly.
Sources
- Union Budget 2025-26: Income Tax announcements and amendments
- Income Tax Act 1961: Sections 87A, 115BAC, Section 24(b), Chapter VI-A
- Central Board of Direct Taxes (CBDT) circulars on FY 2025-26 slabs
- ClearTax and Bajaj Finserv FY 2025-26 slab and rebate documentation