Compare Old vs New Tax Regime slabs and calculate take-home salary in India
Deciding between the Old and New tax regimes is a critical tax-planning decision for salaried professionals, corporate employees, and freelancers in India. For the Financial Year 2025-26, the standard deduction has been increased to ₹75,000 under the New Regime, while the rebate limit under Section 87A has been set to ₹12 Lakhs. Marginal relief applies just above the limit. Between ₹12 lakh and roughly ₹12.7 lakh of taxable income, tax is capped at the amount by which your income exceeds ₹12 lakh.
The Income-tax Act, 2025 applies to income earned from Tax Year 2026-27 (1 April 2026 onward). If you are filing for FY 2025-26 (AY 2026-27), use the original 1961 Act section numbers. For TY 2026-27 filings, consult the renumbered sections below. The calculation rates, thresholds, and rebate limits are unchanged — only the citation numbering differs by year.
| Section — Income-tax Act, 1961 (FY 2025-26 & earlier) | Renumbered — Income-tax Act, 2025 (TY 2026-27+) |
|---|---|
| Section 87A — Income-tax rebate | Section 156 |
| Section 80C — Investments & savings deduction | Section 123 |
| Section 80D — Health insurance premium | Section 126 |
| Section 80CCD(2) — Employer NPS contribution | Section 124(1) |
| Section 24(b) — Interest on home loan | Section 22 |
| Sections 44AD / 44ADA / 44AE — Presumptive taxation | Section 58 (consolidated) |
| Section 44AB — Mandatory tax audit | Section 63 |
| Section 44AA — Books of accounts requirement | Section 62 |
⚠️ Section mapping is per draft CBDT notification (as of mid-2026). Verify against the final gazette notification before filing. The calculator's computation logic uses the substantive rates and limits, which are confirmed unchanged across both Acts.
While the New Regime offers lower tax rates, it eliminates almost all major deductions. If you have significant investments, you may find the Old Regime is still more tax-efficient:
For salaried individuals, the standard deduction is ₹75,000 under the New Tax Regime and ₹50,000 under the Old Tax Regime.
Under Section 10(13A), the tax-free HRA is the lowest of: (a) actual HRA received, (b) 50% basic salary (for metros like Mumbai/Delhi) or 40% (for non-metros), or (c) actual rent paid minus 10% of basic salary.
For freelancers opting for Section 44ADA (declaring 50% of gross receipts as taxable income), the New Regime is often better if total deductions are under ₹3.75 Lakhs due to lower slab rates. If you have large deductions (80C, 80D, high rent HRA), the Old Regime may yield higher savings.
Yes, employer contributions to NPS under Section 80CCD(2) remain tax-exempt under both Old and New regimes (up to 14% of Basic+DA for govt employees, 10% for private sector).
Under the New Tax Regime for FY 2025-26/26-27, resident individuals with taxable income up to ₹12,00,000 receive a full tax rebate under Section 87A, resulting in zero net income tax liability. Marginal relief applies just above the limit. Between ₹12 lakh and roughly ₹12.7 lakh of taxable income, tax is capped at the amount by which your income exceeds ₹12 lakh.
Explore our core suite of income tax and compensation tools. Compare the Old and New tax regimes under FY 2025-26 & FY 2026-27 rules, evaluate take-home salary across various CTC ranges, compute Dearness Allowance (DA) hikes, and optimize tax-free HRA deductions.
The calculations and comparison reports provided on this tool are estimates for general reference. Please consult with a certified Chartered Accountant (CA) or qualified tax advisor to verify your tax liabilities before filing your Income Tax Return (ITR).
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