INCOME TAX CALCULATOR - TAX YEAR 2026-27 : FAQs

What this income tax alculator does

This Income Tax Calculator gives a complete old regime versus new regime comparison for Tax Year 2026-27, the first year governed by the Income-tax Act, 2025. Enter income under any head and the Income Tax Calculator computes both regimes at once, shows which costs less, and produces a computation sheet you can print or save as a PDF.

• Both regimes side by side — new regime slabs under Section 202(1) and old regime slabs under Part I-B of the First Schedule, computed simultaneously
• Every head of income — salary and pension, house property, business or profession, capital gains, other sources, and income charged at a flat 30%
• Exempt allowances with ceilings built in — house rent allowance, leave travel concession, children education and hostel allowance, gratuity, leave encashment and more, each capped automatically at its statutory limit
• Capital gains at the correct special rates — 20% on listed equity short-term gains under Section 196, 12.5% on long-term gains under Sections 197 and 198 with the ₹1,25,000 exemption
• Crypto and virtual digital assets — flat 30% under Section 194, with cost of acquisition as the only deduction and losses correctly disallowed
• Rebate, surcharge and marginal relief — the rebate under Section 156 including marginal relief just above ₹12,00,000, surcharge with the 15% cap on capital gains and dividend, and marginal relief at every surcharge threshold
• A professional computation sheet — This Income Tax Calculator head-wise, deduction-wise and rate-wise workings with slab tables, your own particulars, and a PDF download

Income tax slabs for Tax Year 2026-27

A Health and Education Cess of 4% applies on tax and surcharge in both regimes. Surcharge runs at 10%, 15%, 25% and 37% above ₹50 lakh, ₹1 crore, ₹2 crore and ₹5 crore respectively, capped at 25% in the new regime.

Old regime or new regime — which should you choose?

There is no single answer; it depends entirely on how much you can deduct. The new regime gives wider slabs, a larger standard deduction and a far bigger rebate, but denies almost every deduction and exemption. The old regime keeps house rent allowance, leave travel concession, Chapter VIII deductions and interest on a self-occupied house, but taxes at steeper rates from a lower threshold.

The break-even point

This calculator answers the question directly. Where the new regime wins, it tells you how much additional deduction under Chapter VIII would be needed for the old regime to catch up. If that figure is beyond what you can realistically claim, the choice is settled.

What the new regime takes away

House rent allowance, leave travel concession, children education and hostel allowance, the professional tax deduction, interest on a self-occupied house, and the whole of Chapter VIII apart from employer contributions to the National Pension System and the Agniveer Corpus Fund. Losses under house property also cannot be set off against other heads.

What survives in both

Standard deduction on salary, travel and conveyance allowances under Rule 280(1), gratuity, commuted pension, leave encashment, retrenchment and voluntary retirement compensation, the employer's contribution to the National Pension System up to 14% of salary, and the deduction for family pension.

Making the choice

The new regime under Section 202(1) applies by default. To be taxed under the old regime you must exercise the option under Section 202(4) in the return. A salaried person without business income may switch each year; someone with business income has far less freedom, so the decision deserves more care.