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Income Tax Calculator — FY 2026-27
India's most intuitive income tax calculator. Compare New vs Old Regime, get slab-wise breakdown with interactive charts. Calculate your tax liability in seconds. Trusted by 50,000+ users on sipcalculators.net.
Tax Slab Breakdown
New Regime 2026-27| Income Slab | Rate | Taxable Amount | Tax |
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What is Income Tax?
Income Tax is a direct tax levied by the Government of India on the income earned by individuals, Hindu Undivided Families (HUFs), companies, and other entities during a financial year. It is governed by the Income Tax Act, 1961 and administered by the Central Board of Direct Taxes (CBDT). The tax is calculated based on income slabs — higher income attracts higher tax rates, following a progressive taxation system.
For FY 2026-27 (Assessment Year 2027-28), taxpayers can choose between two regimes: the New Tax Regime (default) with lower rates but fewer deductions, or the Old Tax Regime with higher rates but multiple deduction options under sections like 80C, 80D, and HRA.
New Regime vs Old Regime — Which is Better?
The New Tax Regime (introduced in Budget 2020 and revised in Budget 2025) offers simplified, lower tax rates with minimal deductions. It is the default regime for FY 2026-27. The Old Tax Regime allows you to claim deductions under 80C (up to Rs 1.5 lakh), 80D (medical insurance), HRA, home loan interest (Section 24), and many more.
- New Regime is better if your total deductions are less than Rs 3-4 lakh. The lower slab rates compensate for the loss of deductions.
- Old Regime is better if you have significant investments in PPF, ELSS, EPF, NPS, health insurance, HRA, and home loan interest exceeding Rs 4 lakh in total.
- Salaried employees can switch between regimes every year. Business/profession income holders can switch only once.
Tax Saving Tips Under Section 80C
Section 80C is the most popular deduction under the Old Regime, allowing up to Rs 1.5 lakh deduction on investments like:
- PPF (Public Provident Fund): 15-year lock-in, tax-free returns, currently 7.1% p.a. EEE status (Exempt-Exempt-Exempt).
- ELSS (Equity Linked Savings Scheme): Shortest lock-in of 3 years among 80C options. Equity market returns with tax benefit.
- EPF / VPF: Employer contribution is automatic. Voluntary PF (VPF) up to Rs 2.5 lakh per year earns tax-free interest.
- Life Insurance Premiums, NSC, 5-Year FD, Tuition Fees: All qualify under 80C up to the combined limit of Rs 1.5 lakh.
- Home Loan Principal: EMI principal repayment qualifies under 80C.
Section 80D — Medical Insurance Deduction
Under Section 80D (Old Regime), you can claim deduction for health insurance premiums:
- Up to Rs 25,000 for self, spouse, and children.
- Additional Rs 25,000 (or Rs 50,000 for senior citizens) for parents' health insurance.
- Preventive health check-up of Rs 5,000 is included within the above limits.
- Maximum deduction can reach Rs 1,00,000 if both self and parents are senior citizens.
Standard Deduction 2026-27
For FY 2026-27, salaried employees and pensioners get a standard deduction of Rs 75,000 under the New Tax Regime (increased from Rs 50,000 in Budget 2024). Under the Old Regime, the standard deduction remains at Rs 50,000. This flat deduction requires no investment proof and is automatically applied to gross salary income.
How Income Tax is Calculated
Tax Payable = Tax on Taxable Income (as per slab rates) + 4% Health & Education Cess
Where Taxable Income = Gross Income − Deductions (80C, 80D, HRA, Standard Deduction, etc.). The 4% cess is applied on the total tax amount and funds health and education infrastructure across India.
Frequently Asked Questions
What are the new income tax slabs for FY 2026-27 under the New Regime?
Under the New Tax Regime for FY 2026-27: Income up to Rs 4 lakh is nil, Rs 4-8 lakh at 5%, Rs 8-12 lakh at 10%, Rs 12-16 lakh at 15%, Rs 16-20 lakh at 20%, Rs 20-24 lakh at 25%, and above Rs 24 lakh at 30%. A standard deduction of Rs 75,000 is available for salaried individuals.
Which is better — New Regime or Old Regime for income tax?
It depends on your deductions. If your total deductions (80C + 80D + HRA + others) exceed Rs 3-4 lakh, the Old Regime may save more tax. For those with minimal investments or deductions, the New Regime with its lower slab rates is usually better. Use the calculator above to compare both regimes for your exact income and deductions.
What is Section 80C and how much tax can I save?
Section 80C allows deductions up to Rs 1.5 lakh per year on investments like PPF, ELSS, EPF, NSC, life insurance premiums, home loan principal, tuition fees, and 5-year FDs. At the 30% tax slab, this can save up to Rs 46,800 in tax (including cess). This deduction is available only under the Old Tax Regime.
What is the standard deduction for salaried employees in 2026?
Under the New Tax Regime for FY 2026-27, salaried employees get a standard deduction of Rs 75,000 (increased from Rs 50,000 in Budget 2024). Under the Old Regime, it remains Rs 50,000. This is a flat deduction available to all salaried individuals and pensioners without requiring any investment proof.
How is health and education cess calculated?
A Health and Education Cess of 4% is levied on the total income tax amount (including surcharge, if applicable). For example, if your calculated tax is Rs 1,00,000, the cess adds Rs 4,000, making the total tax Rs 1,04,000. This cess funds primary education and healthcare infrastructure across India.
Is there any rebate available under Section 87A?
Yes. Under the New Regime for FY 2026-27, a full rebate under Section 87A is available if your taxable income (after standard deduction) is up to Rs 12 lakh, making the effective tax zero for income up to approximately Rs 12.75 lakh. Under the Old Regime, the rebate applies for taxable income up to Rs 5 lakh, making tax zero for income up to Rs 5.5 lakh (including standard deduction).