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Locked to FY 2025-26 (AY 2026-27). Compare Old and New Tax Regimes with your salary, capital gains, and deductions — same engine as our main income tax calculator.
Enter income sources and eligible deductions
Income Sources
Total gross salary before any deductions
30% standard deduction auto-applied by IT Dept.
Taxed at flat 20%
₹1.25L exempt; balance taxed at 12.5%
Deductions (Old Regime only)
Old Tax Regime
₹12,00,000
₹2,77,400
₹9,22,600
₹97,020
₹3,881
₹1,00,901
8.41%
₹8,408
New Tax Regime
RECOMMENDED₹12,00,000
₹75,000
₹11,25,000
₹52,500
-₹52,500
₹0
₹0
0%
₹0
Income Breakdown
Old vs New Regime
Tax Breakdown Comparison
| Item | Old Regime | New Regime |
|---|---|---|
| Gross Total Income | ₹12,00,000 | ₹12,00,000 |
| Standard Deduction | - ₹50,000 | - ₹75,000 |
| Other Deductions (Old only) | - ₹2,27,400 | — |
| Taxable Income | ₹9,22,600 | ₹11,25,000 |
| Slab Tax | ₹97,020 | ₹52,500 |
| Capital Gains Tax | — | — |
| Less: Rebate 87A | — | - ₹52,500 |
| Surcharge | — | — |
| Health & Education Cess (4%) | ₹3,881 | — |
| Total Tax Payable | ₹1,00,901 | — |
Who should choose Old Regime?
Who should choose New Regime?
How to reduce your tax further
India follows a progressive tax system where higher income is taxed at higher rates. Your total income is first aggregated from all five heads — Salary, House Property, Business/Profession, Capital Gains, and Other Sources. Applicable deductions are subtracted to arrive at Taxable Income, which is then taxed as per the applicable slab rates. The two regimes — Old and New — offer different trade-offs between deductions and slab rates.
The Old Regime allows over 70 exemptions and deductions (HRA, LTA, 80C, 80D, home loan interest, etc.) but has higher tax rates. The New Regime (default from FY 2023-24 onwards) has lower tax rates and fewer slabs but allows only the standard deduction. For FY 2025-26, the New Regime is enhanced — income up to ₹12L is effectively tax-free due to the expanded Section 87A rebate. The break-even point depends on total eligible deductions.
Section 87A provides a tax rebate that makes low-income taxpayers effectively tax-free. For FY 2025-26: Under the New Regime, if total income ≤ ₹12,00,000 the entire income tax is waived. Under the Old Regime, if total income ≤ ₹5,00,000 a rebate of ₹12,500 is granted. This rebate applies before cess is added.
A surcharge is levied on the income tax (not on income) for high-income earners. For incomes between ₹50L–₹1Cr: 10% surcharge. For ₹1Cr–₹2Cr: 15%. For ₹2Cr–₹5Cr: 25%. Above ₹5Cr: 37% (Old Regime) or capped at 25% (New Regime). Health & Education Cess of 4% is applied on tax + surcharge.
Short-Term Capital Gains (STCG) on equity shares/equity funds held less than 12 months are taxed at 20% (flat). Long-Term Capital Gains (LTCG) on equity held over 12 months are exempt up to ₹1,25,000 per year; gains above this are taxed at 12.5% without indexation. These rates are the same regardless of which regime you choose.
Indian savings instruments are classified by their tax treatment: EEE (Exempt-Exempt-Exempt) means no tax on investment, returns, or maturity — PPF, EPF, NPS (partial), and SSY enjoy this benefit. EET means investment is exempt, returns are exempt, but maturity is taxed. ET means only investment is exempt but returns and maturity are taxed. Knowing this helps you optimise your portfolio for after-tax returns.
Quick Tax Reference (FY 2025-26)
New Regime Slabs