Income Tax Calculator — FY 2025-26 & FY 2026-27

Who this calculator is for

This tool computes income tax under the new tax regime, which has been the default regime since FY 2023-24 and is what the overwhelming majority of salaried Indians now file under. Enter your gross annual income, pick whether you are salaried or self-employed, and you get the tax, the slab-by-slab split, the rebate, any marginal relief, the cess and your yearly in-hand figure.

It is built for the two financial years that matter right now. If you are filing your return for FY 2025-26 (assessment year 2026-27), use it to check the number your employer or your CA has arrived at. If you are planning cash flow for FY 2026-27 (AY 2027-28), the same numbers apply, because Budget 2026 left the new regime slabs, the ₹75,000 standard deduction and the ₹12 lakh rebate threshold untouched. That is unusual and worth knowing: for two years running, a salaried person's tax on the same salary is unchanged.

One naming change trips people up. The Income Tax Act, 2025 replaced the 1961 Act with effect from 1 April 2026. It renumbers sections — the 87A rebate becomes section 156 from FY 2026-27 onward, not 157, which is a different provision covering relief on salary received in arrears — and it replaces "previous year" and "assessment year" with a single term, tax year. For FY 2025-26 you still cite section 87A of the 1961 Act, because that income was earned before the new Act came into force. The rates and the arithmetic did not change; only the labels did. We still say "FY 2025-26" and "AY 2026-27" here because that is what the ITR forms and your Form 16 still say.

New regime slabs for FY 2025-26 and FY 2026-27

These are slab rates, not flat rates. A person earning ₹20 lakh does not pay 20% on the whole amount; each band of income is taxed at its own rate, and only the last rupees fall in the top band.

Add 4% Health & Education Cess on the tax after rebate. There is no separate slab for senior citizens under the new regime — the ₹3 lakh and ₹5 lakh basic exemptions for people aged 60+ and 80+ exist only in the old regime.

How the tax is worked out, step by step

1. Start with gross total income. Salary, pension, interest, rent, capital gains and business income all go in. This calculator treats the figure you enter as ordinary income taxed at slab rates.
2. Subtract the standard deduction of ₹75,000 if you are salaried or a pensioner. Self-employed people do not get it, which is why the toggle above matters. What is left is your taxable income.
3. Apply the slab rates band by band to get the tax before rebate.
4. Apply the section 87A rebate. If taxable income is ₹12,00,000 or less, the rebate wipes out the entire tax, up to a ceiling of ₹60,000.
5. Apply marginal relief if taxable income is just above ₹12 lakh. Your tax can never exceed the amount by which your income crosses ₹12 lakh.
6. Add 4% cess on whatever tax survives steps 4 and 5. That is your final liability.

Four worked examples

All four assume a salaried person with no capital gains, so the ₹75,000 standard deduction applies.

Example 1 — Salary ₹8,00,000: zero tax

Nothing to pay, but you should still file a return. Your employer may have deducted TDS in the early months before you submitted your declaration, and the only way to get that money back is by filing.

Example 2 — Salary ₹12,75,000: still exactly zero

This is the exact edge of the cliff. Taxable income lands on ₹12,00,000 to the rupee, the rebate is ₹60,000, which is also the ceiling, and the liability is nil.

Example 3 — Salary ₹13,00,000: marginal relief in action

Without marginal relief this person would owe ₹66,300 after cess. Earning ₹25,000 more than the person in Example 2 would have cost them ₹66,300 — they would be worse off for getting a raise. Marginal relief exists precisely to stop that.

Example 4 — Salary ₹25,00,000: no rebate, no relief

The effective rate here is 12.8% of gross salary, even though the top slab is 30%. That gap between the marginal rate and the effective rate is the single most misunderstood thing about Indian income tax.

Marginal relief above ₹12 lakh

Marginal relief applies only in the new regime, only to the 87A rebate, and only in a narrow band. The rule is simple: your tax cannot be more than the amount by which your taxable income exceeds ₹12,00,000.

The band closes at a taxable income of about ₹12,70,588. Above that, the normal slab tax is already lower than the excess over ₹12 lakh, so relief gives you nothing. For a salaried person that corresponds to a gross salary of roughly ₹13,45,588. Here is what the band looks like.

Note that the cess is charged on the tax after relief, not before. That is why ₹25,000 of tax becomes ₹26,000 and not ₹27,300.

What you can and cannot claim

The new regime is a trade: lower rates in exchange for giving up almost every deduction. Three things survive and are worth knowing about.

• Standard deduction of ₹75,000 for salary and pension income.
• Employer's NPS contribution under section 80CCD(2), up to 14% of basic salary. This is the one meaningful tax break left, and it is badly under-used. Ask your HR whether your CTC can be restructured to route part of it into NPS.
• Interest on a home loan for a let-out property, set off against the rental income. Interest on a self-occupied house is not deductible in the new regime, which is the biggest single loss for people with a large home loan.

Gone in the new regime: 80C investments (PPF, ELSS, life insurance premium, children's tuition), 80D health insurance premium, HRA exemption, LTA, 80TTA and 80TTB interest deductions, 80E education loan interest, and the ₹2 lakh self-occupied home loan interest deduction. If you have a large stack of these, run the numbers on our old vs new regime comparison before deciding.

Surcharge on high incomes

Above ₹50 lakh of taxable income a surcharge is added on top of the tax, before cess. The new regime caps it at 25%; the old regime goes up to 37%. This calculator does not compute surcharge, so if your income is above ₹50 lakh treat the output as the pre-surcharge figure.

Common mistakes

• Treating the slab rate as the effective rate. Someone on ₹25 lakh pays 12.8% of gross, not 30%. Do not make life decisions on the marginal number.
• Assuming ₹12.75 lakh is tax-free for everyone. It is a salaried figure. Freelancers, consultants and business owners get no standard deduction, so their tax-free ceiling is ₹12 lakh.
• Forgetting to add interest and rent. Savings account interest, fixed deposit interest and rental income are part of total income even when TDS has already been cut. The Annual Information Statement on the e-filing portal shows what the department already knows about you — reconcile against it.
• Not filing because tax is zero. Filing is what gets your excess TDS refunded, and a filed return is what banks and visa officers ask for.
• Ignoring advance tax. If your total liability after TDS exceeds ₹10,000 in a year, you owe advance tax in four instalments (15 June, 15 September, 15 December, 15 March). Interest under sections 234B and 234C applies if you skip them. Salaried people with only salary income are usually covered by TDS, but a big capital gain or a side income changes that.
• Missing the deadline. For AY 2026-27 the due date was 31 July 2026 for ITR-1 and ITR-2 filers, and 31 August 2026 for non-audit ITR-3 and ITR-4 filers, the later date now being statutory rather than an extension. As of 5 September 2026 the CBDT has announced no extension of either. A belated return is still possible until 31 December 2026, with a late fee and interest — but note that a belated return can only be filed under the new regime.