Income Tax Calculator FY 2026-27

Understanding Income Tax in India

Income tax is a direct tax levied by the Government of India on the income earned by individuals, HUFs, companies, and other entities. For salaried individuals, tax is calculated based on their annual income using the slab rates prescribed under the Income Tax Act, 1961.

Starting from FY 2023-24, the new tax regime is the default regime. However, taxpayers can choose to opt for the old regime if it results in lower tax liability. Understanding both regimes is crucial for effective tax planning.

Old Tax Regime vs New Tax Regime

The old tax regime offers higher tax rates but allows various deductions and exemptions under sections like 80C, 80D, HRA, home loan interest, and more. The new tax regime has lower tax rates but eliminates most deductions, making it simpler but potentially more expensive for those with significant investments.

Income Tax Slabs for FY 2026-27

For FY 2026-27, the tax slabs under both regimes are as follows:

• New Regime: Nil up to ₹3 lakh, 5% for ₹3-6 lakh, 10% for ₹6-9 lakh, 15% for ₹9-12 lakh, 20% for ₹12-15 lakh, 30% above ₹15 lakh
• Old Regime (Below 60): Nil up to ₹2.5 lakh, 5% for ₹2.5-5 lakh, 20% for ₹5-10 lakh, 30% above ₹10 lakh
• Standard Deduction: ₹50,000 available under both regimes for salaried individuals

How to Reduce Your Tax Liability

Under the old regime, you can reduce your taxable income through various deductions:

• Section 80C: Up to ₹1.5 lakh for PF, ELSS, life insurance, tuition fees, etc.
• Section 80CCD(1B): Additional ₹50,000 for NPS contributions
• Section 80D: Health insurance premiums up to ₹25,000 (₹50,000 for senior citizens)
• HRA Exemption: Based on actual rent paid and city of residence
• Section 24(b): Home loan interest up to ₹2 lakh

Which Regime Should You Choose?

The choice between old and new regime depends on your investment pattern and deductions. If your total deductions exceed ₹2-3 lakh, the old regime is likely more beneficial. Otherwise, the new regime with its lower rates may save you more tax. Use this calculator to compare both regimes and make an informed decision.