See which regime likely leaves more annual cash after income tax + cess for the same gross — old side can include PF in 80C, other 80C, and HRA exemption you type in. This is a planning estimate only: no surcharge, no proofs, no Form 16 match.
Reviewed July 2026 · FY 2026–27 (AY 2027–28) tax slabs in engine · Methodology
Most people don't feel "tax regime" in the abstract — they feel rent, EMIs, and whether anything is left at month-end. This screen only answers which regime taxes your salary harder in our simplified model. If old regime wins here but you hate collecting proofs, that's a real-life cost this math ignores.
New regime often looks clean until you remember you're not modeling full HRA, home loan, or NPS the way your CA would. Use the result as a directional nudge, then talk to someone qualified before locking declarations for the year.
Same Salary Reality Check engine, fixed rent + lifestyle story per page — jump in and edit the numbers.
Not tax filing advice
Use this only as a planning estimate. Actual tax depends on proofs, employer calculations, and other income.
Outputs are annualized estimates — see the accuracy card for regime limits in this engine.
Engine snapshot: gross ₹18,00,000/year, employee PF ₹1,50,000, other 80C ₹0, HRA exemption ₹2,00,000. Estimated total tax + cess: old regime ₹2,41,800, new regime ₹1,50,800 (simplified model; not filing output).
Not automatically. This tool ignores many real-world factors. Your employer's regime choice, deductions, and long-term plans matter.
Form 16 uses actual TDS, proofs, and payroll timing. This is an annualized simplified model.
India's dual tax regime system allows salaried employees to choose between two completely different frameworks for computing income tax. The choice — made once at the start of each financial year for TDS purposes, and finalised at filing — has a meaningful impact on how much monthly cash you keep.
The new regime (under Section 115BAC) offers lower marginal rates and a higher basic exemption structure. For FY 2025-26, the new regime includes a ₹75,000 standard deduction and a Section 87A rebate that makes taxable income up to ₹12 lakh effectively tax-free. This makes the new regime the default choice for most employees with taxable income below ₹12 lakh after standard deduction — and increasingly competitive even above that threshold.
The old regime uses lower slab rates only after you subtract significant deductions. The ₹50,000 standard deduction applies, plus: Section 80C investments up to ₹1.5 lakh (PF, ELSS, PPF, LIC premiums, home loan principal, children's tuition fees), HRA exemption under Section 10(13A) if you pay rent, NPS deductions under Section 80CCD, and home loan interest under Section 24. An employee with high rent, maximum 80C use, and NPS contributions can reduce taxable income by ₹3–4 lakh or more, which may make the old regime more beneficial. Use the comparison calculator to run your specific numbers — the crossover point varies significantly by income level.
A common misconception: the new regime is always better for low incomes, always worse for high earners with deductions. Reality is more nuanced. At gross salaries where income tax is zero in the new regime (due to 87A), the old regime is unlikely to produce a lower liability regardless of deductions. At higher gross levels, the regime with more beneficial rates and effective deductions should be compared explicitly — which is exactly what this calculator does.
India now operates two parallel income tax systems for individuals. From FY 2024-25, the new regime is the default — you must actively opt out to use the old one. The fundamental difference: the new regime offers lower slab rates but strips out most deductions and exemptions. The old regime has higher slab rates but allows HRA, 80C, 80D, home loan interest, NPS, and dozens of other deductions.
Income up to ₹4 lakh: nil. ₹4–8 lakh: 5%. ₹8–12 lakh: 10%. ₹12–16 lakh: 15%. ₹16–20 lakh: 20%. ₹20–24 lakh: 25%. Above ₹24 lakh: 30%. A standard deduction of ₹75,000 is available. The Section 87A rebate means zero tax for income up to ₹12 lakh (before cess) under the new regime.
Health and education cess of 4% applies on top of computed tax. The effective tax at exactly ₹12 lakh taxable income (after standard deduction) under the new regime is nil.
The old regime slabs: up to ₹2.5 lakh nil, ₹2.5–5 lakh at 5%, ₹5–10 lakh at 20%, above ₹10 lakh at 30%. Standard deduction is ₹50,000.
Key deductions available under old regime that are not available under new:
New regime typically wins for: Employees earning below ₹12 LPA (the rebate makes it zero-tax territory), younger employees without large investment portfolios or home loans, employees who do not pay significant rent, and those who find ITR filing simpler without maintaining proofs.
Old regime typically still wins for: Employees paying metro rent above ₹15,000–20,000/month, those with active home loan EMIs, individuals maxing out 80C and 80D with genuine investments, and those earning above ₹15 LPA with structured deduction portfolios. The cross-over point depends heavily on HRA, as that exemption often has the largest impact.
The real-world decision is more nuanced than math alone: the new regime removes the need to submit investment declarations, chase rent receipts, and prove insurance payments — that administrative simplicity has real value for many employees.