Which regime should I choose?

The new regime is now the default and wins for most people, because the lower slab rates usually beat the deductions given up. The old regime only comes out ahead when you genuinely claim a large amount — typically over ₹3.5 to ₹4 lakh of deductions, which usually means a home loan interest claim alongside a full 80C and HRA. Run both and compare, since the crossover depends on your exact numbers.

What is marginal relief and why does it matter here?

Without it, taxable income of ₹12,00,000 would pay zero while ₹12,10,000 would pay around ₹61,500 — a ₹10,000 raise costing more than six times that in tax. Marginal relief caps the tax at the amount by which your income exceeds the threshold, so the extra ₹10,000 costs at most ₹10,000. This calculator applies it.

What is not included in this calculation?

Capital gains, which are taxed at their own special rates rather than at slab rates. Also excluded are surcharge marginal relief at the ₹50 lakh and ₹1 crore thresholds, the many sub-limits within Chapter VI-A deductions, and any relief under section 89 for arrears. For those, and for anything unusual, use a chartered accountant.

How often do these slabs change?

Every year, in the Union Budget presented at the start of February. The rates here are those announced in February 2025 for FY 2025-26, which is assessment year 2026-27. Check the financial year in the heading matches the one you are filing for before relying on any figure.

Does the standard deduction apply to everyone?

Only to salaried individuals and pensioners. It is ₹75,000 under the new regime and ₹50,000 under the old one for FY 2025-26. Business and professional income does not get it, which is why this calculator asks.

Income Tax Calculator FY 2025-26: New vs Old

These are the FY 2025-26 (AY 2026-27) rates, announced in the Union Budget of February 2025. Slabs change every Budget. Check the financial year in the heading matches the one you are filing for before relying on any figure here.

How to use this calculator

Enter your gross annual income before any deductions.
Choose the regime. The new regime is the default since FY 2023-24.
Under the old regime, enter your deductions — 80C, 80D, home loan interest and the rest, added together.
Say whether you are salaried, which determines the standard deduction.

The FY 2025-26 slabs

New regime — the default:

Taxable income	Rate
Up to ₹4,00,000	Nil
₹4,00,001 – ₹8,00,000	5%
₹8,00,001 – ₹12,00,000	10%
₹12,00,001 – ₹16,00,000	15%
₹16,00,001 – ₹20,00,000	20%
₹20,00,001 – ₹24,00,000	25%
Above ₹24,00,000	30%

Standard deduction: ₹75,000. Section 87A rebate: full, up to ₹12,00,000 taxable.

Old regime — deductions available:

Taxable income	Rate
Up to ₹2,50,000	Nil
₹2,50,001 – ₹5,00,000	5%
₹5,00,001 – ₹10,00,000	20%
Above ₹10,00,000	30%

Standard deduction: ₹50,000. Section 87A rebate: up to ₹5,00,000 taxable.

Health and education cess of 4% applies on top under both regimes.

A worked example

A salaried person earning ₹15,00,000 gross, with ₹2,00,000 of deductions available.

New regime. Taxable income is ₹15,00,000 − ₹75,000 = ₹14,25,000. Deductions are not available, so they play no part.

₹4,00,000 – ₹8,00,000   @  5%  =  ₹20,000
₹8,00,000 – ₹12,00,000  @ 10%  =  ₹40,000
₹12,00,000 – ₹14,25,000 @ 15%  =  ₹33,750
                        subtotal  ₹93,750
                    + 4% cess     ₹3,750
                        TOTAL     ₹97,500

Old regime. Taxable income is ₹15,00,000 − ₹50,000 − ₹2,00,000 = ₹12,50,000, giving slab tax of ₹1,87,500 plus ₹7,500 cess = ₹1,95,000.

	New regime	Old regime
Taxable income	₹14,25,000	₹12,50,000
Total tax	₹97,500	₹1,95,000
Effective rate	6.5%	13.0%

The new regime is ₹97,500 cheaper here — exactly half — despite the higher taxable income, because the slab rates are so much lower.

Is income up to ₹12 lakh really tax-free?

Under the new regime, yes. Taxable income up to ₹12,00,000 attracts a full rebate under section 87A. Add the ₹75,000 standard deduction and a salaried person earning up to ₹12,75,000 gross pays nothing at all.

Above that, the rebate vanishes completely and tax is calculated normally from the first slab.

Marginal relief — the detail most calculators miss

That cliff would be brutal without relief. Taxable income of ₹12,00,000 pays zero; ₹12,10,000 would otherwise pay around ₹61,500. A ₹10,000 raise would cost six times its value in tax.

Marginal relief caps the tax at the amount by which your income exceeds the threshold. So ₹10,000 of extra income costs at most ₹10,000 of tax, not ₹61,500. Relief tapers off naturally around ₹12,75,000 of taxable income, where normal tax falls below the excess. This calculator applies it.

Which regime should you choose?

The new regime wins for most people. The old regime only comes out ahead when your deductions are genuinely large — as a rough guide, above ₹3.5 to ₹4 lakh, which in practice means a full ₹1.5 lakh under 80C plus a substantial home loan interest claim plus HRA.

Things you give up in the new regime: 80C, 80D, HRA exemption, LTA, and home loan interest on a self-occupied property. Things you keep: employer NPS contribution under 80CCD(2), and the standard deduction.

Run both. The crossover depends on your exact numbers, not on a rule of thumb.

What this calculator does not cover

Capital gains, which are taxed at their own special rates rather than at slab rates — a large equity gain can dwarf your salary tax and is not modelled here.

Surcharge marginal relief at the ₹50 lakh and ₹1 crore thresholds. Basic surcharge is applied; the relief that softens those cliffs is not.

Sub-limits within deductions — 80D varies by age and who is covered, 80C has its own eligibility rules, and home loan interest is capped at ₹2 lakh for a self-occupied property.

Section 89 relief for salary arrears.

For anything with capital gains, foreign income, business income of any complexity, or a large one-off event, use a chartered accountant. This is a planning tool, not a return.

Common mistakes to avoid

Assuming your employer picked the right regime. Many default you into one at the start of the year. You can change it when filing — for salaried people with no business income, the choice is available every year.

Forgetting the cess. Four percent on top of the tax is not rounding. On ₹93,750 of tax it is ₹3,750.

Treating TDS as final. TDS is an estimate deducted through the year. If your employer did not know about other income, or you changed jobs mid-year, you may owe more when filing — or be due a refund.

Using last year’s slabs. They change every February. This page states its financial year at the top for exactly that reason.

Income Tax Calculator (FY 2025-26)