Income Tax Calculator 2026

For a ₹12 lakh salary with no deductions, the New Regime is better — you pay zero tax due to the ₹87A rebate (income up to ₹12.75L is tax-free with ₹75K standard deduction). But if you have 80C (₹1.5L), HRA and home loan interest, old regime could save you ₹15,000-₹30,000 more. Use our calculator above to check your specific situation.

The New Regime is now the DEFAULT regime from FY 2026-27. This means if you don't tell your employer which regime you want, they will automatically deduct TDS as per the new regime. If you want old regime, you must submit Form 10-IEA to your employer before the start of the financial year — don't forget this!

In the New Regime, most deductions like 80C, HRA, home loan interest (24b), 80D are NOT available. However, the Standard Deduction of ₹75,000 is available. The most important exception is Section 80CCD(2) — employer's NPS contribution — which IS available in the new regime and can save significant tax.

In the New Regime for FY 2026-27, income up to ₹12,75,000 is effectively tax-free. This is because: Basic exemption is ₹4L, then you get ₹75K standard deduction = ₹4.75L tax-free income. The Section 87A rebate of up to ₹60,000 covers tax on the remaining amount up to ₹12.75L total income.

Salaried employees can switch between old and new regime every year by informing their employer at the start of the financial year. Business owners/self-employed have limited flexibility — they can switch only once from old to new regime and cannot switch back. When filing ITR, salaried employees can choose a different regime than what their employer used for TDS.