In the new regime a salary up to ₹12.75 lakh pays no income tax. The ₹75,000 standard deduction takes it to ₹12 lakh of taxable income, and a rebate cancels the tax on that. Above it the slabs run 5% from ₹4 lakh to 30% above ₹24 lakh, with 4% cess on top. The old regime keeps its deductions but charges more on the same income, so it only wins when those deductions are large.
Income tax on common salaries, tax year 2026-27
Salary income only, below 60, cess included. The old regime column uses just its ₹50,000 standard deduction; the last column is how much more you would need to deduct for the old regime to cost no more than the new one.
New and old regime tax for common salaries, tax year 2026-27| Salary | New regime | Old regime | In-hand a month (new) | Old regime breaks even at |
|---|
| ₹5 lakh | ₹0 | ₹0 | ₹41,667 | no deductions |
|---|
| ₹7 lakh | ₹0 | ₹44,200 | ₹58,333 | ₹1,50,000 of deductions |
|---|
| ₹10 lakh | ₹0 | ₹1,06,600 | ₹83,333 | ₹4,50,000 of deductions |
|---|
| ₹12 lakh | ₹0 | ₹1,63,800 | ₹1,00,000 | ₹6,50,000 of deductions |
|---|
| ₹12.75 lakh | ₹0 | ₹1,87,200 | ₹1,06,250 | ₹7,25,000 of deductions |
|---|
| ₹13 lakh | ₹26,000 | ₹1,95,000 | ₹1,06,167 | ₹6,87,500 of deductions |
|---|
| ₹15 lakh | ₹97,500 | ₹2,57,400 | ₹1,16,875 | ₹5,43,700 of deductions |
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| ₹18 lakh | ₹1,50,800 | ₹3,51,000 | ₹1,37,433 | ₹6,41,700 of deductions |
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| ₹20 lakh | ₹1,92,400 | ₹4,13,400 | ₹1,50,633 | ₹7,08,300 of deductions |
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| ₹25 lakh | ₹3,19,800 | ₹5,69,400 | ₹1,81,683 | ₹8,00,000 of deductions |
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| ₹30 lakh | ₹4,75,800 | ₹7,25,400 | ₹2,10,350 | ₹8,00,000 of deductions |
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| ₹40 lakh | ₹7,87,800 | ₹10,37,400 | ₹2,67,683 | ₹8,00,000 of deductions |
|---|
| ₹50 lakh | ₹10,99,800 | ₹13,49,400 | ₹3,25,017 | ₹8,00,000 of deductions |
|---|
The zero in the new regime column ends abruptly at ₹12.75 lakh, but the tax after it starts small: that is the marginal relief in the next section, not a mistake in the table.
Nil up to ₹12.75 lakh, and ₹26,000 at ₹13 lakh
At ₹12.75 lakh the taxable income is exactly ₹12,00,000. The slabs produce ₹60,000 of tax, and the rebate for resident individuals, up to ₹60,000 where taxable income is ₹12 lakh or less, cancels all of it.
One rupee more and the rebate would vanish, turning ₹0 into about ₹62,400. The law prevents that cliff with marginal relief: above ₹12 lakh, the tax cannot exceed the income above ₹12 lakh. At ₹13 lakh the slabs give ₹63,750, but only ₹25,000 of income sits above the line, so the tax is ₹25,000, or ₹26,000 with cess.
The relief runs out a little above ₹12.7 lakh of taxable income, where the slab tax itself falls below the income over ₹12 lakh; from there the ordinary slabs apply. The rebate is for residents only, and it does not cover special-rate income such as capital gains.
The old regime needs about ₹8 lakh of deductions to win above ₹24 lakh
The old regime still has its deductions, but its slabs are steeper: 20% from ₹5 lakh and 30% from ₹10 lakh, against the new regime’s 30% from ₹24 lakh. On a ₹30 lakh salary the new regime charges ₹4,75,800; the old regime matches it only once you deduct ₹8,00,000 beyond its ₹50,000 standard deduction, and from ₹25 lakh up that figure stays at ₹8 lakh.
Few salaries reach that. The usual deductions add up like this: 80C up to ₹1,50,000 (EPF, PPF, ELSS, life cover, home loan principal), 80D health cover up to ₹25,000 for yourself and up to ₹50,000 more for senior-citizen parents, NPS under 80CCD(1B) up to ₹50,000, and home loan interest on a self-occupied house up to ₹2,00,000. That is about ₹4.75 lakh at most before HRA. HRA exemption, which can be large in a metro with high rent, is what usually decides it.
Below ₹12.75 lakh the question barely arises: the new regime charges nothing, so the old one cannot beat it. Employer NPS under 80CCD(2) is allowed in both regimes, so it never tips the choice.
Surcharge above ₹50 lakh, capped at 25% in the new regime
Above ₹50 lakh of taxable income a surcharge is added to the tax: 10% up to ₹1 crore, 15% up to ₹2 crore, and 25% above. The old regime adds a 37% rate above ₹5 crore; the new regime stops at 25%. Cess then applies to tax and surcharge together.
On a ₹60 lakh salary the new regime’s slab tax is ₹13,57,500, the 10% surcharge adds ₹1,35,750, and cess brings it to ₹15,52,980. Just past each threshold, marginal relief limits the jump to the income over the line, and the calculator applies it.
Tax year 2026-27 is the first under the Income-tax Act, 2025
The Income-tax Act, 2025 replaced the 1961 Act from 1 April 2026. It drops the pairing of a “previous year” and an “assessment year”: income earned from April 2026 to March 2027 is simply tax year 2026-27, the year most payslips still call FY 2026-27 with AY 2027-28.
The Finance Bill, 2026 kept the rates. The new-regime slabs, the ₹75,000 standard deduction, the rebate up to ₹12 lakh of taxable income, the surcharge and the 4% cess are the same as for 2025-26, so this calculator’s figures apply to both years’ salaries. Section numbers have changed in the new Act, which is why this page describes the rules rather than quoting old section numbers.
Sources and methodology
Slabs, rebate, surcharge and cess come from the Income Tax Department and the Finance Bill, 2026.
Method. Both regimes are computed on every change from one table of slabs, deductions, rebate, surcharge bands and cess. The rebate’s marginal relief and the surcharge’s marginal relief are applied, and the break-even is found by searching, rupee by rupee, for the smallest total of old-regime deductions at which its tax is no higher than the new regime’s. That engine is verified on every change against 53 assertions, including the government’s own statement that a ₹12.75 lakh salary pays no tax and every table salary recomputed from the published slabs by separate arithmetic. The count and the per-case breakdown are published on the formula verification page.