Income Tax Calculator

Income tax is the tax you pay to the central government on money you earn during a financial year — from salary, business or professional income, capital gains, rental income, interest from deposits, or any other source. India's financial year runs from 1 April to 31 March, so FY 2026-27 covers earnings from 1 April 2026 to 31 March 2027. The tax return for this period, called the ITR, is filed in the following assessment year — AY 2027-28 — typically before 31 July 2027.

Since FY 2025-26, India operates two parallel income tax regimes that every taxpayer must choose between. The New Tax Regime offers lower slab rates but strips out most deductions and exemptions. The Old Tax Regime has higher slab rates but lets you reduce your taxable income significantly through instruments like 80C investments, HRA exemption, home loan interest, and health insurance premiums. The New Regime is now the default — if you do not actively declare a choice, your employer deducts TDS based on the New Regime automatically.

The critical decision is which regime results in lower tax for your specific income and deductions. There is no universal answer. A salaried person with no investments, no home loan, and no HRA will almost always pay less under the New Regime. A person who maximises 80C (₹1.5 lakh), claims HRA, and pays substantial home loan interest may still save more under the Old Regime despite its higher rates. The only reliable way to know is to calculate both — which is exactly what this calculator does, side by side, in real time.

India uses a progressive slab system — different portions of your taxable income are taxed at different rates. Only the income within each band is taxed at that band's rate. A common and costly misconception is that crossing into a higher slab means your entire income gets taxed at the higher rate — this is incorrect. Each slab taxes only the income within its own band.

Note: Senior citizens (60-79 years) get a higher basic exemption of ₹3,00,000 under the Old Regime. Super senior citizens (80+) get ₹5,00,000 basic exemption under the Old Regime. These age-based exemptions do not apply under the New Regime.

Section 87A is a tax rebate — not a deduction — that completely cancels your income tax liability if your taxable income does not exceed the specified threshold. Under the New Regime for FY 2026-27, the Section 87A rebate is up to ₹60,000, applicable to any resident individual whose net taxable income is ₹12,00,000 or less.

Here is why this matters: the tax calculated on exactly ₹12,00,000 taxable income under the New Regime slabs is ₹60,000 (₹0 on first ₹4L + ₹20,000 on next ₹4L at 5% + ₹40,000 on next ₹4L at 10%). The 87A rebate wipes out this entire ₹60,000, bringing final tax to zero — before cess is even applied.

This calculator is designed for five types of users who face this decision at different points in the financial year.

Salaried employees declaring their regime to their employer at the start of the year use it most urgently. Your employer asks you to declare your preferred regime — usually in April — because they need to know which rules to apply when deducting TDS from your monthly salary. Getting this declaration wrong means either too much or too little TDS all year, which you only recover or pay up when you file your ITR. Running both regimes through this calculator before making that declaration takes two minutes and can save thousands.

Freelancers and self-employed individuals estimating advance tax use it throughout the year. If your estimated total tax liability exceeds ₹10,000, you are required to pay advance tax in four instalments — June, September, December, and March. This calculator shows your projected liability so you can plan each instalment correctly and avoid the 1% monthly interest penalty on shortfalls.

People comparing job offers use it to understand actual take-home pay rather than just CTC figures. Two jobs offering the same gross salary but different structures — one with high HRA and one without, for instance — can result in meaningfully different post-tax take-home amounts, especially under the Old Regime.

Taxpayers with significant deductions use it annually to confirm whether the Old Regime still wins for them, or whether the New Regime's higher rebate threshold has now tipped the calculation. As the ₹12 lakh zero-tax threshold under the New Regime grows more attractive, the breakeven deduction amount required to justify staying in the Old Regime rises accordingly.

Individuals receiving salary from multiple employers, rental income, or interest income from multiple sources use it to get a combined picture of their total taxable income before filing their ITR.