Everything about the new tax regime in plain language — slabs, zero tax, what's allowed, what's not, and when to switch to old regime.
| Income Range | Tax Rate | Tax on Slab |
|---|---|---|
| Up to ₹4,00,000 | 0% | ₹0 |
| ₹4L – ₹8L | 5% | ₹20,000 |
| ₹8L – ₹12L | 10% | ₹40,000 |
| ₹12L – ₹16L | 15% | ₹60,000 |
| ₹16L – ₹20L | 20% | ₹80,000 |
| ₹20L – ₹24L | 25% | ₹1,00,000 |
| Above ₹24L | 30% | On excess |
✅ Allowed: Standard deduction ₹75,000 (salaried), Employer's NPS contribution (80CCD-2, up to 10% of basic), Agniveer Corpus Fund, gratuity exemption up to ₹20L, leave encashment exemption up to ₹25L, VRS exemption up to ₹5L, transport allowance for specially-abled employees.
❌ NOT allowed: 80C (PPF, ELSS, NSC, LIC), HRA exemption, Home loan interest (Section 24b), 80D health insurance, NPS own contribution (80CCD-1B), LTA (Leave Travel Allowance), Professional tax deduction, standard deduction under old regime ₹50,000, most other Chapter VI-A deductions.
For a salaried employee earning ₹12 lakh gross salary: Standard deduction ₹75,000 reduces taxable income to ₹11.25 lakh. Tax on ₹11.25L = ₹4L×0% + ₹4L×5% + ₹3.25L×10% = ₹0 + ₹20,000 + ₹32,500 = ₹52,500. But wait — income is below ₹12L threshold, so 87A rebate of ₹60,000 applies. Since actual tax (₹52,500) is less than rebate (₹60,000), entire tax is waived. Total tax = ₹0. This is why ₹12L salary = zero tax in new regime.
New regime can show lower calculated tax under these inputs if: Your income is ₹12L or below (zero tax), you have no home loan, you don't pay rent (no HRA), your 80C investments are below ₹1L, you want simplicity without collecting proofs, you are a new employee without established investments. For some taxpayers earning ₹15-20L with limited deductions, the new regime can produce a lower calculated tax under the stated assumptions. Use the comparison tool with your own figures and current tax-year rules.
Tax Year 2026-27 is the current period under the Income-tax Act, 2025. This page describes the provisions and assumptions currently shown on CalcuTools; verify the latest official guidance before filing or paying tax.
Salaried employees: Tell your HR/payroll team at the start of April each year. Submit a declaration choosing old regime. They will adjust TDS accordingly. Even if you forget to tell HR, you can choose old regime at ITR filing time — just don't submit any advance tax under wrong regime. Business owners: File Form 10-IEA on the IT portal before ITR deadline. You can switch only once from new to old regime — choose carefully.