Planning your taxes and understanding salary TDS is straightforward with this Income Tax Calculator for FY 2026-27. Compare tax liability under both the New and Old tax regimes, evaluate the revised tax slabs, check Section 87A rebate eligibility (zero tax up to ₹12 lakh taxable income in the New Regime), and discover strategies to save tax across various income brackets.
Income Tax Calculator FY 2026-27 Overview
This calculator estimates your annual income tax liability for FY 2026-27 (AY 2027-28) under both the New and Old tax regimes.
By inputting your gross salary, allowances, and investments, you can instantly compare tax payable, marginal tax rates, and standard deduction benefits to choose the regime that maximizes your take-home pay.
New Tax Regime Slabs & 87A Rebate (FY 2026-27)
Under the New Tax Regime for FY 2026-27, the slab structure is: ₹0–₹4 Lakh: Nil; ₹4–₹8 Lakh: 5%; ₹8–₹12 Lakh: 10%; ₹12–₹16 Lakh: 15%; ₹16–₹20 Lakh: 20%; ₹20–₹24 Lakh: 25%; Above ₹24 Lakh: 30%.
Resident individuals with taxable income up to ₹12 Lakh get a Section 87A rebate of up to ₹60,000, making tax liability zero.
Salaried employees also enjoy a ₹75,000 standard deduction, extending the effective tax-free income limit to ₹12.75 Lakh.
Old Tax Regime Slabs & Key Tax Deductions
The Old Tax Regime maintains traditional slabs: ₹0–₹2.5 Lakh: Nil; ₹2.5–₹5 Lakh: 5%; ₹5–₹10 Lakh: 20%; Above ₹10 Lakh: 30%.
While slab rates are higher, it allows extensive deductions including Section 80C (up to ₹1.5 Lakh for EPF/PPF/ELSS), Section 80D (health insurance up to ₹75,000), Section 24(b) (home loan interest up to ₹2 Lakh), HRA exemption, and LTA.
Is Tax Calculated on Basic Salary Alone?
No.
Income tax is calculated on your total Gross Taxable Income—which includes Basic Salary, HRA, Special Allowance, Bonus, Commission, Perks, and income from other sources (like FD interest)—minus eligible deductions.
Basic salary is only used as a base reference to compute EPF contributions, HRA exemptions, and employer NPS benefits.
How to Save Tax on Salaries of ₹15 Lakh & ₹18 Lakh
For a ₹15 Lakh to ₹18 Lakh salary under the Old Regime, you can reduce taxable income significantly by combining Section 80C (₹1.5L), 80D (₹25k–₹75k), Section 24(b) home loan interest (₹2L), HRA exemption, and NPS Section 80CCD(1B) (₹50k).
Under the New Regime, options are limited to employer NPS contributions under Section 80CCD(2) (up to 10%–14% of Basic salary) and standard deduction.
Income Tax Liability Breakdown across Salary Brackets
Tax liability under the New Regime (FY 2026-27 with ₹75,000 standard deduction): On ₹7.5 Lakh salary = ₹0 tax (due to Section 87A rebate); On ₹12 Lakh salary = ₹0 tax; On ₹15 Lakh salary = ~₹97,500 (incl.
4% cess); On ₹24 Lakh salary = ~₹2,92,500; On ₹40 Lakh salary = ~₹7,87,800.
Frequently Asked Questions
How much tax will I pay if my salary is 12 lakh?
Under the New Tax Regime for FY 2026-27, you pay ₹0 tax. With the ₹75,000 standard deduction, your taxable income becomes ₹11.25 Lakh. Since taxable income is within ₹12 Lakh, Section 87A rebate (up to ₹60,000) reduces your net tax liability to zero.
How much tax will be deducted for 7.5 lakhs salary?
For a ₹7.5 Lakh salary, net tax liability is ₹0 under the New Tax Regime. After applying the ₹75,000 standard deduction, taxable income is ₹6.75 Lakh, which qualifies for full tax rebate under Section 87A.
What is the tax rate and tax amount for 24 lakh salary?
Under the New Regime (FY 2026-27), income slabs go up to 25% for ₹20L–₹24L and 30% above ₹24L. On a ₹24 Lakh salary (taxable income ₹23.25 Lakh after ₹75k standard deduction), total tax payable is approximately ₹2,92,500 (including 4% cess), giving an effective tax rate of ~12.2%.
What is the income tax on 40 lakhs salary?
On a ₹40 Lakh salary under the New Regime for FY 2026-27, taxable income is ₹39.25 Lakh (after ₹75,000 standard deduction). Total tax payable is ₹7,87,800 (₹7,57,500 tax + 4% Health & Education Cess), resulting in an effective tax rate of ~19.7%.
How to pay zero tax on salary of 18 lakhs?
To pay zero tax on an ₹18 Lakh salary, you must opt for the Old Tax Regime and claim maximum deductions to bring taxable income down to ₹5 Lakh (where Section 87A gives full rebate). Deductions required include: Standard Deduction (₹50k), Section 80C (₹1.5L), Section 80D (₹75k), Home Loan Interest u/s 24b (₹2L), NPS u/s 80CCD(1B) (₹50k), HRA Exemption (~₹3L–₹5L), and employer NPS u/s 80CCD(2).
How to save tax on 15 lakhs salary?
Under the New Regime, tax on ₹15 Lakh gross salary is ~₹97,500 (after ₹75k standard deduction). You can save further using employer NPS contributions u/s 80CCD(2). Under the Old Regime, you can save tax by exhausting Section 80C (₹1.5L), 80D health insurance, HRA exemption, and Section 24(b) home loan interest.
Is tax calculated on basic salary?
No. Income tax is calculated on your total Gross Taxable Income, which includes Basic salary, HRA, Special Allowances, Bonus, Perquisites, and interest income minus eligible exemptions and deductions. Basic salary is only used as a base to calculate specific allowances like HRA exemption and EPF/NPS contributions.
What was the income tax standard deduction for FY 2023-24?
For FY 2023-24 (AY 2024-25), the standard deduction for salaried employees and pensioners was ₹50,000 under both the Old and New Tax Regimes. (It was subsequently raised to ₹75,000 under the New Regime starting FY 2024-25).
Which regime is better for FY 2026-27: New or Old?
The New Tax Regime is better for most salaried individuals earning up to ₹12.75 Lakh (zero tax) and for those who do not have large home loans or high HRA expenses. The Old Regime remains beneficial for taxpayers with high deductions exceeding ₹3.75 Lakh to ₹4 Lakh per year.
What is Section 87A rebate in the new tax regime?
For FY 2026-27 under the New Regime, Section 87A provides a tax rebate of up to ₹60,000 for resident individuals whose taxable income does not exceed ₹12 Lakh, resulting in zero tax liability. Marginal relief is also provided for income slightly above ₹12 Lakh.