How it works
India taxes salaried individuals on their income of the financial year; for FY 2026-27 (1 April 2026 to 31 March 2027, assessment year 2027-28) the Income-tax Act, 2025 comes into force and Budget 2026 left the slabs and the rebate unchanged. The new regime is the default; you can opt for the old regime if your deductions are large. This calculator follows the rates published by the Income Tax Department and the Union Budget.
New regime: slabs, standard deduction and rebate
After a standard deduction of Rs 75,000 the slabs are: nil up to Rs 4 lakh, 5% up to Rs 8 lakh, 10% up to Rs 12 lakh, 15% up to Rs 16 lakh, 20% up to Rs 20 lakh, 25% up to Rs 24 lakh and 30% above. The section 87A rebate of up to Rs 60,000 makes the tax nil when taxable income is up to Rs 12 lakh, which means a salary of up to Rs 12.75 lakh pays no tax. Just above this, marginal relief limits the tax to the amount by which taxable income exceeds Rs 12 lakh. Health and education cess of 4% is added, and the surcharge is 10% above Rs 50 lakh, 15% above Rs 1 crore and 25% above Rs 2 crore; the new regime caps the surcharge at 25%.
Old regime
Old-regime slabs (below 60 years) are nil up to Rs 2.5 lakh, 5% up to Rs 5 lakh, 20% up to Rs 10 lakh and 30% above. The standard deduction is Rs 50,000, section 80C allows up to Rs 1.5 lakh (your employee PF counts towards it; add other investments in the 80C field) and professional tax is deductible. The 87A rebate is Rs 12,500 for taxable income up to Rs 5 lakh. Surcharge goes up to 37% above Rs 5 crore. Section 80D, HRA, LTA and home-loan interest are not included in this calculator.
PF and professional tax
Employee provident fund is 12% of basic pay. The statutory EPF wage ceiling was raised from Rs 15,000 to Rs 25,000 a month with effect from 17 September 2026 (notification S.O. 5109(E)); "capped" uses the new ceiling for the whole year, while "actual" assumes 12% of the full basic salary. Professional tax is levied by the states, with a constitutional maximum of Rs 2,500 a year; it is a simple yearly amount here. In the new regime neither is deductible from income.
Worked example
Annual salary Rs 15,00,000, basic 40%, new regime: taxable income is Rs 14,25,000 after the standard deduction, tax is Rs 93,750 plus 4% cess = Rs 97,500; PF (capped at Rs 25,000 a month) is Rs 36,000; in-hand salary is Rs 13,66,500 a year. At Rs 12,75,000 the tax is zero, and at Rs 13,00,000 it is only Rs 26,000 thanks to marginal relief. In the old regime, Rs 15,00,000 with Rs 1.5 lakh under 80C and Rs 2,500 professional tax gives taxable income of Rs 12,97,500 and tax of Rs 2,09,820.