Deductions (for Old Regime)
Old Regime
New Regime
Detailed breakdown
| Particulars | Old Regime | New Regime |
|---|
Estimates for FY 2025-26 (AY 2026-27) including 4% Health & Education Cess, applicable surcharge and marginal relief. Verify with a tax professional before filing.
New Tax Regime slabs for FY 2025-26 (AY 2026-27)
Budget 2025 overhauled the new tax regime. The basic exemption rose to ₹4 lakh, the Section 87A rebate now makes income up to ₹12 lakh completely tax-free, and the standard deduction for salaried individuals is ₹75,000 — pushing the zero-tax salary ceiling to ₹12.75 lakh.
| Income Slab | Tax 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% |
Old Tax Regime slabs for FY 2025-26
The old regime is unchanged in Budget 2025. It keeps higher slab rates but lets you claim deductions like 80C, 80D, HRA and home-loan interest. The standard deduction here is ₹50,000.
| Income Slab (below 60 yrs) | Tax 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% |
Senior citizens (60–80) get a ₹3 lakh basic exemption; super seniors (80+) get ₹5 lakh. Income up to ₹5 lakh is tax-free under the old regime via the Section 87A rebate (max ₹12,500).
Which regime should you choose?
There is no single answer — it depends on how many deductions you can claim:
- Few or no deductions → the new regime almost always wins, thanks to lower rates and the ₹12 lakh rebate.
- High deductions (full 80C + HRA + home-loan interest + 80D) → the old regime can still come out ahead, especially at higher incomes.
- Income up to ₹12.75 lakh (salaried) → the new regime gives zero tax with no paperwork.
Enter your real figures in the calculator above — it does the full slab-by-slab math, applies the 87A rebate, surcharge, marginal relief and 4% cess, and shows the exact rupee difference.
How this calculator works
- New regime: subtracts the ₹75,000 standard deduction (if salaried), applies FY 2025-26 slabs, then the Section 87A rebate (up to ₹60,000 for taxable income ≤ ₹12 lakh) with marginal relief.
- Old regime: subtracts your deductions (80C, 80D, HRA, home-loan interest, NPS, others) plus the ₹50,000 standard deduction, applies old slabs by age, then the 87A rebate (income ≤ ₹5 lakh).
- Adds surcharge (income above ₹50 lakh) and 4% Health & Education Cess to both.
Frequently asked questions
Which tax regime is better for FY 2025-26, old or new?
It depends on your deductions. After Budget 2025 the new regime makes income up to ₹12.75 lakh (salaried) tax-free and has lower slab rates, so it suits most people. The old regime wins only when total deductions are very high. The calculator above gives the exact answer for your numbers.
Is income up to ₹12 lakh really tax-free under the new regime?
Yes. A resident individual with taxable income up to ₹12 lakh gets a full Section 87A rebate (up to ₹60,000), making tax zero. With the ₹75,000 standard deduction, salaried individuals pay zero tax up to ₹12.75 lakh.
What is the standard deduction for FY 2025-26?
₹75,000 under the new regime and ₹50,000 under the old regime, for salaried individuals and pensioners.
Can I switch between regimes every year?
Salaried individuals without business income can choose afresh each year while filing the ITR. Those with business income have restricted switching.
What is marginal relief under the new regime?
If income just crosses ₹12 lakh, marginal relief caps the extra tax so it never exceeds the income above ₹12 lakh. The calculator applies it automatically.
Disclaimer: This calculator provides estimates for educational purposes based on the Finance Act 2025 provisions for FY 2025-26 (AY 2026-27). It is not tax advice. Consult a qualified professional before making decisions.