New Tax Regime Calculator
FY 2025-26 (AY 2026-27) - u/s 115BAC
Interest, rental income, etc.
Deductions
Note: This calculator is for the New Tax Regime (u/s 115BAC) for FY 2025-26. Standard deduction of ₹75,000 is applicable. Rebate of ₹60,000 u/s 87A is available for income up to ₹12,00,000 (effectively making income up to ₹12.75 lakh tax-free). No other deductions (80C, 80D, HRA, LTA, etc.) are allowed.
What is the New Tax Regime?
The New Tax Regime (introduced under Section 115BAC) is an optional income tax structure in India that offers lower tax rates in exchange for giving up most deductions and exemptions available under the old regime.
Key Features:
- • Lower tax slabs with reduced rates
- • Standard deduction of ₹75,000 (from FY 2023-24)
- • No deductions under 80C, 80D, HRA, LTA, etc.
- • Simpler tax calculation process
- • Optional - you can switch between regimes annually
Tax Slabs for FY 2025-26 (AY 2026-27)
| Income Slab | Tax Rate | Surcharge |
|---|---|---|
| Up to ₹4,00,000 | Nil | Nil |
| ₹4,00,001 - ₹8,00,000 | 5% | Nil |
| ₹8,00,001 - ₹12,00,000 | 10% | Nil |
| ₹12,00,001 - ₹16,00,000 | 15% | Nil |
| ₹16,00,001 - ₹20,00,000 | 20% | Nil |
| ₹20,00,001 - ₹24,00,000 | 25% | Nil |
| ₹24,00,001 - ₹50,00,000 | 30% | Nil |
| ₹50,00,001 - ₹1,00,00,000 | 30% | 10% |
| ₹1,00,00,001 - ₹2,00,00,000 | 30% | 15% |
| Above ₹2,00,00,001 | 30% | 25% |
Note: Health & Education Cess of 4% is applicable on total tax + surcharge.
How is Tax Calculated?
Example: Annual Salary ₹10,00,000
Tax Calculation:
💡 Key Point: Income up to ₹12,00,000 is eligible for full rebate under Section 87A, making it effectively tax-free. With standard deduction of ₹75,000, you can earn up to ₹12.75 lakh without paying any tax!
New vs Old Tax Regime
| Feature | New Regime | Old Regime |
|---|---|---|
| Tax Rates | Lower (5% to 30%) | Higher (5% to 30%) |
| Standard Deduction | ✓ ₹75,000 | ✓ ₹50,000 |
| 80C Deductions | ✗ Not allowed | ✓ Up to ₹1.5L |
| HRA Exemption | ✗ Not allowed | ✓ Allowed |
| LTA Exemption | ✗ Not allowed | ✓ Allowed |
| Home Loan Interest | ✗ Not allowed | ✓ Up to ₹2L |
| Best For | Low deductions | High deductions |
Who Should Choose the New Tax Regime?
✓ New Regime is Better If:
- • You don't have many tax-saving investments
- • You live in your own house (no HRA)
- • You don't have a home loan
- • Your total deductions are less than ₹2.5 lakhs
- • You prefer simplicity in tax filing
- • You're a young professional just starting out
✓ Old Regime is Better If:
- • You have significant 80C investments (PPF, ELSS, etc.)
- • You receive HRA and live in a rented house
- • You have a home loan with high interest
- • Your total deductions exceed ₹2.5 lakhs
- • You have health insurance premiums (80D)
- • You claim LTA benefits regularly
Deductions Available in New Tax Regime
While most deductions are not allowed, the following are still available:
- ✓Standard Deduction: ₹75,000 for salaried individuals
- ✓Professional Tax: Actual amount paid (usually ₹2,400/year)
- ✓Employer's NPS Contribution: Under Section 80CCD(2)
- ✓Transport Allowance: For specially-abled persons
- ✓Conveyance Allowance: For official duties
Frequently Asked Questions
Q: Can I switch between old and new regime every year?
A: Yes, salaried individuals can switch between regimes every financial year. Business owners can switch only once in their lifetime.
Q: Is the new regime mandatory?
A: No, it's optional. You can choose the regime that results in lower tax liability.
Q: What happens if I don't choose any regime?
A: From FY 2023-24, the new tax regime is the default. If you want the old regime, you must explicitly opt for it.
Q: Can I claim 80C deductions in the new regime?
A: No, deductions under Section 80C (PPF, ELSS, life insurance, etc.) are not allowed in the new tax regime.
Q: Is standard deduction available in the new regime?
A: Yes, standard deduction of ₹75,000 is available for salaried individuals from FY 2023-24 onwards.
💡 Smart Tax Planning Tips
- ✓Calculate Both: Always calculate tax under both regimes before filing
- ✓Maximize Standard Deduction: Ensure your employer considers it in TDS
- ✓NPS Employer Contribution: Still deductible under new regime (80CCD2)
- ✓File ITR Early: Get refunds faster and avoid last-minute rush
- ✓Keep Records: Maintain salary slips and Form 16 for verification
- ✓Review Annually: Your optimal regime may change with life events