Income Tax Calculator (Old vs New Regime)
Calculate Smarter. Work Faster.
Free income tax calculator India (FY 2025-26) — enter your salary and deductions to instantly compare tax under the Old vs New regime and see which saves more.
Income & Deduction Details
Enter your annual income and eligible deductions. Deductions below are only used to compute Old Regime tax, since most are not allowed under the New Regime. This calculator assumes salaried / pension income eligible for the standard deduction under both regimes.
Enter your details and hit compare
Compare to see the detailed slab-wise tax calculation.
Old Regime vs New Regime — What's the Difference?
Old vs New tax regime: if your total deductions (80C, 80D, HRA, home loan interest) exceed roughly ₹3.5–4 lakh a year, the Old Regime usually works out cheaper; below that, the New Regime's lower slab rates typically win. India currently runs two parallel personal income tax structures. The New Regime is now the default option, with lower slab rates but almost no deductions or exemptions. The Old Regime has higher slab rates but allows a wide range of deductions such as 80C, 80D, HRA and home loan interest, which can bring your effective tax down significantly if you actively invest and claim them.
New Regime slabs (FY 2025-26): ₹0–4L: Nil, ₹4–8L: 5%, ₹8–12L: 10%, ₹12–16L: 15%, ₹16–20L: 20%, ₹20–24L: 25%, above ₹24L: 30%. A standard deduction of ₹75,000 applies to salaried taxpayers, and a tax rebate under Section 87A means taxable income up to ₹12,00,000 (₹12,75,000 including standard deduction) effectively attracts zero tax, with marginal relief tapering the tax smoothly for incomes just above that threshold.
Old Regime slabs (below 60 years): ₹0–2.5L: Nil, ₹2.5–5L: 5%, ₹5–10L: 20%, above ₹10L: 30%. Senior citizens (60–80) get a higher exemption limit of ₹3L, and super senior citizens (80+) get ₹5L. A standard deduction of ₹50,000 applies, along with deductions like 80C (up to ₹1.5L), 80D, home loan interest under Section 24(b) (up to ₹2L), and NPS under 80CCD(1B) (up to ₹50,000). Rebate under 87A makes tax zero if taxable income is up to ₹5,00,000, again with marginal relief just above that line.
Which one should you pick? If you don't invest much or don't have a home loan / HRA to claim, the New Regime usually works out cheaper because of its lower slabs and higher rebate threshold. If you have substantial 80C investments, health insurance, a home loan, or high HRA exemption, the Old Regime can still come out ahead — this calculator runs both numbers side by side so you don't have to guess.
A 4% Health & Education Cess is added on top of the computed tax in both regimes, after the 87A rebate/marginal relief is applied. This calculator does not account for HRA exemption, capital gains, or surcharge on very high incomes, and assumes salary/pension income eligible for the standard deduction — for a complete picture, especially if you have business or rental income, it's a good idea to review your Form 16 or full return with a tax professional.
Reference: Income Tax Act, 1961, and Finance Act provisions for FY 2025-26 (AY 2026-27), Government of India. This calculator is for educational planning purposes only and does not constitute tax advice; always confirm with a qualified CA or tax advisor.
What Each Regime Actually Allows
| Deduction/Exemption | Old Regime | New Regime |
|---|---|---|
| Standard deduction (salaried) | ₹50,000 | ₹75,000 |
| Section 80C (PPF, ELSS, life insurance, etc.) | Up to ₹1.5L | Not allowed |
| Section 80D (health insurance premium) | Allowed | Not allowed |
| HRA exemption | Allowed | Not allowed |
| Home loan interest (Sec 24b, self-occupied) | Up to ₹2L | Not allowed |
| NPS employer contribution (80CCD(2)) | Allowed | Allowed |
This is exactly why there's no single "better" regime — it depends entirely on how much of the Old Regime's deduction list you actually use. Someone with an active home loan, health insurance, and full 80C investments often has ₹3-4+ lakh in deductions, which can tip the Old Regime ahead despite its higher slab rates. Someone with minimal investments and no home loan almost always comes out ahead on the New Regime's lower slabs and larger rebate threshold.
Common mistakes when comparing regimes
1. Comparing only the slab rates, not the total tax after deductions. The New Regime's lower rates can still lose to the Old Regime once ₹3-4 lakh of deductions are factored in — always compare final tax payable, not headline rates.
2. Forgetting HRA when eligible. HRA exemption can be substantial for renters in metro cities and is only available under the Old Regime — this calculator doesn't include it, so add it manually to your Old Regime comparison if it applies to you.
3. Not accounting for employer NPS contribution. This is one of the few deductions available under both regimes (80CCD(2)) — many taxpayers miss claiming it, especially under the New Regime where it's one of very few deductions left.
4. Assuming last year's regime choice still applies. Salaried employees without business income can switch every year — don't assume you're locked into whichever regime you (or your employer's default) picked previously.
CTC vs In-Hand Salary for Maintenance & Site Engineers
Engineering offer letters — especially from manufacturing plants, EPC contractors, and PSUs — tend to have a wider gap between CTC and in-hand salary than a typical office role, because they bundle in components a desk job usually doesn't: shift allowance, site/field allowance, tool or safety-gear allowance, uniform allowance, and employer NPS or superannuation contributions. Each of these inflates the CTC figure on your offer letter without necessarily inflating what lands in your bank account every month.
Where maintenance and site engineers commonly lose track of the gap: shift and site allowances are frequently taxed as part of salary (unless specifically structured as reimbursements against bills), while employer PF and NPS contributions — which do count toward CTC — never appear in your take-home pay at all since they go straight into a retirement account. A ₹9 LPA CTC offer with a heavy allowance and employer-PF structure can land meaningfully lower in-hand than a ₹9 LPA offer built mostly on basic salary, even though both quote the identical headline CTC.
Regime choice interacts with this directly. An engineer on a plant-site posting who receives free company accommodation instead of HRA, and doesn't have a home loan or heavy 80C investments, often finds the New Regime's simpler, lower slabs come out ahead — since there's little Old Regime deduction to actually claim. An engineer renting in a metro city with an active home loan and full 80C usage more often finds the Old Regime wins despite higher slab rates. Run your actual numbers through the calculator above rather than assuming either regime is the default "engineer-friendly" choice — the right answer depends on your specific allowance structure and posting.
Frequently Asked Questions
Which regime is the default now? +
The New Tax Regime is the default option for all taxpayers. If you want to be taxed under the Old Regime instead, you need to specifically opt for it — salaried employees can do this each year while filing their return or via their employer's declaration form.
Can I switch between regimes every year? +
Salaried individuals with no business income can switch between the Old and New Regime every financial year. Those with business or professional income have a one-time option to switch back to the Old Regime after opting out of it.
Does this calculator include HRA exemption? +
No. HRA exemption depends on your actual rent paid, city of residence, and basic salary, which makes it highly individual. This calculator focuses on 80C, 80D, home loan interest, and NPS to give a directional comparison — factor in your HRA exemption separately for a fully accurate picture.
Is there a rebate that makes tax fully zero? +
Yes. Under Section 87A, if your taxable income is up to ₹12,00,000 under the New Regime, or up to ₹5,00,000 under the Old Regime, your tax liability is reduced to zero through this rebate. If your income is slightly above these thresholds, marginal relief caps your tax so it never exceeds the amount by which your income exceeds the threshold — this calculator applies that relief automatically.
Can I switch back to the Old Regime after choosing New this year? +
Salaried individuals with no business income can switch between regimes every financial year without restriction. If you have business or professional income, however, you get only one opportunity to switch back to the Old Regime after opting out of it — plan carefully if this applies to you.
Does the New Regime allow any deductions at all? +
The New Regime allows very few deductions compared to the Old Regime — mainly the standard deduction (₹75,000 for salaried taxpayers) and employer's NPS contribution under 80CCD(2). Popular deductions like 80C, 80D, and home loan interest under Section 24(b) are not available under the New Regime, which is the core trade-off against its lower slab rates.
How do I know which regime actually saves me more tax? +
Enter your income and all your eligible deductions (80C, 80D, home loan interest, NPS, etc.) into this calculator — it computes your tax under both regimes side by side using your actual numbers, so you don't have to work through the slab math manually. As a rough guide, if your total deductions comfortably exceed roughly ₹4-4.5 lakh, the Old Regime often works out cheaper; below that, the New Regime usually wins.
Does this calculator account for capital gains or rental income? +
No — this calculator focuses on salary/pension income under the standard slab structure. Capital gains (short-term and long-term) are taxed under separate rules and rates, and rental income has its own deduction structure (standard 30% deduction plus home loan interest). For a complete picture with these income types, review your full return with a CA.
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