In India, taxpayers have the flexibility to choose between two tax systems: the Old Tax Regime and the New Tax Regime. Our interactive Income Tax Calculator for FY 2025-26 (Assessment Year 2026-27) is designed to compare your tax liabilities under both systems side-by-side.
This ensures you can pick the regime that maximizes your tax savings and take-home pay.
Old Regime vs. New Regime Slabs (FY 2025-26)
The primary difference lies in the tax slabs and your ability to claim deductions.
1. New Tax Regime Slabs (FY 2025-26 / AY 2026-27)
The New Tax Regime offers lower tax rates but removes almost all deductions (such as Section 80C, 80D, and HRA). However, it offers a higher standard deduction of ₹75,000 and a tax rebate u/s 87A for taxable income up to ₹12,00,000.
| Taxable Income | Tax Rate |
|---|---|
| Up to ₹4,000,00 | Nil |
| ₹4,00,001 to ₹8,00,000 | 5% |
| ₹8,00,001 to ₹12,00,000 | 10% |
| ₹12,00,001 to ₹16,00,000 | 15% |
| ₹16,00,001 to ₹20,00,000 | 20% |
| ₹20,00,001 to ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
2. Old Tax Regime Slabs (FY 2025-26)
The Old Tax Regime has higher tax rates but allows you to reduce your taxable income using deductions like PPF, ELSS, Insurance, Home Loans, and HRA. It offers a standard deduction of ₹50,000 and a tax rebate u/s 87A for taxable income up to ₹5,00,000.
| Taxable Income | Tax Rate |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 to ₹5,00,000 | 5% |
| ₹5,00,001 to ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Major Tax Deductions Allowed Under Old Regime
If you choose the Old Regime, you can reduce your taxable income significantly using these popular options:
- Section 80C (Up to ₹1,50,000): Includes employee contributions to EPF, PPF, ELSS mutual funds, Life Insurance premiums, Principal repayment of Home Loans, and National Savings Certificates (NSC).
- Section 80D (Up to ₹25,000 / ₹50,000): Medical insurance premiums paid for self, spouse, children (up to ₹25,000) and parents (up to ₹50,000 for senior citizens).
- Section 24(b) (Up to ₹2,00,000): Interest paid on home loans for self-occupied property.
- House Rent Allowance (HRA): Exemption calculated based on rent paid, salary, and city of residence.
- Section 80CCD(1B) (Up to ₹50,000): Additional deduction for contributions made to the National Pension Scheme (NPS).
How is Tax Calculated?
Let’s assume a taxpayer has a gross annual income of ₹15,00,000 and claims deductions of ₹2,50,000 (80C, 80D, etc.) under the Old Regime.
Under the New Regime:
- Gross Income: ₹15,00,000
- Standard Deduction: -₹75,000
- Taxable Income: ₹14,25,000
- Tax Calculation:
- First ₹4L: Nil
- ₹4L to ₹8L: 5% of ₹4L = ₹20,000
- ₹8L to ₹12L: 10% of ₹4L = ₹40,000
- ₹12L to ₹14.25L: 15% of ₹2.25L = ₹33,750
- Tax before Cess: ₹93,750
- Health & Education Cess (4%): ₹3,750
- Total Tax Payable: ₹97,500
Under the Old Regime:
- Gross Income: ₹15,00,000
- Standard Deduction: -₹50,000
- Other Deductions: -₹2,50,000
- Taxable Income: ₹12,00,000
- Tax Calculation:
- First ₹2.5L: Nil
- ₹2.5L to ₹5L: 5% of ₹2.5L = ₹12,500
- ₹5L to ₹10L: 20% of ₹5L = ₹1,00,000
- ₹10L to ₹12L: 30% of ₹2L = ₹60,000
- Tax before Cess: ₹1,72,500
- Health & Education Cess (4%): ₹6,900
- Total Tax Payable: ₹1,79,400
In this example, the taxpayer saves ₹81,900 by opting for the New Tax Regime.