Income tax calculator

• Gross annual income: ₹12,00,000
• Standard deduction: ₹75,000 (salaried/pension)
• Taxable income: ₹11,25,000
• Tax before rebate (slab tax): ₹52,500
• Section 87A rebate: ₹52,500
• Tax after rebate: ₹0
• Health & education cess (4%): ₹0
• Estimated total tax (incl. cess): ₹0
• Effective rate (illustrative): 0%

Cess is calculated on tax after rebate, not on the full slab tax — so once the rebate brings tax after rebate to zero, the cess on that zero is also zero. That is why taxable income under the rebate threshold can show a total liability of exactly nil rather than some small reduced amount.

Using your entered gross income, age category, and deduction inputs, here is how the new regime you selected compares directly against the alternative:

The New tax regime (115BAC) comes out about ₹1,17,000 cheaper on these inputs. That gap tracks your Chapter VI-A deductions — 80C, 80D, HRA, home loan interest — directly: the more genuine old-regime deductions you have, the more likely the old regime wins; with few or none, the new regime's lower slab rates usually come out ahead. Rerun the calculator with your actual deduction total, not an assumption, before deciding.

Walking through your own numbers end to end: gross annual income of ₹12,00,000, filed under the New tax regime (115BAC) for someone in the below-60 age bracket.

1. Start with gross income: ₹12,00,000.
2. Subtract the standard deduction of ₹75,000 (available since this is salary/pension income).
3. Arrive at taxable income: ₹11,25,000.
4. Apply the progressive slab rates for the New tax regime (115BAC) to get tax before rebate: ₹52,500.
5. Apply Section 87A rebate (if eligible): ₹52,500, leaving tax after rebate of ₹0.
6. Add health and education cess at 4%: ₹0.
7. Total estimated tax liability: ₹0, an effective rate of 0% on gross income.

• Likely better under the old regime: homeowners with a home loan (Section 24(b) interest deduction), taxpayers who fully utilise 80C (PF, PPF, ELSS, life insurance) and 80D (health insurance) each year, and salaried employees claiming a meaningful HRA exemption in a high-rent city.
• Likely better under the new regime: early-career employees with few investments yet, those without a home loan or significant 80C/80D claims, and taxpayers who prefer a simpler filing process without collecting proof for multiple deductions.

These are patterns, not guarantees — the only reliable way to know for certain is to compute both regimes on your exact numbers, which is exactly what the table above does. Early-career taxpayers with high disposable income relative to their commitments often default toward the new regime, since they haven't yet built up a home loan, a full 80C allocation, or dependent-linked 80D claims. Mid-career taxpayers carrying a home loan EMI, family health cover, and retirement contributions more often find the old regime's deductions add up to a real advantage — but only when those deductions are genuinely being claimed, not just theoretically available.

Most salaried employees have tax deducted at source (TDS) each month, based on the regime and investment declarations they give their employer — over a full year, that TDS should roughly match the annual liability this calculator estimates. Income outside salary that isn't fully covered by TDS — freelance work, rent, capital gains, interest — can trigger an advance tax obligation: quarterly instalments paid during the year instead of one lump sum at filing time, with interest charged on any shortfall. Senior citizens with no business or professional income are generally exempt from this requirement even if their total liability would otherwise cross the threshold.

Use this calculator's estimated annual liability as a planning anchor, then reconcile it against your Form 16 (for salary TDS) and Form 26AS/AIS (for all TDS/TCS reported against your PAN) to see whether you owe additional tax or are due a refund at filing time.

If the TDS deducted by your employer, bank, or other deductors across the year exceeds the ₹0 liability this calculator estimates, filing your return should produce a refund of the excess, credited directly to your bank account after processing. This is common when someone declares a higher-tax regime at the start of the year but later qualifies for more deductions, or when a bank deducts a flat TDS rate on interest that exceeds their actual slab-based liability.

• Form 16 from your employer (salary breakup, TDS deducted).
• Form 26AS and the Annual Information Statement (AIS) from the income tax portal, showing all TDS/TCS and reported financial transactions against your PAN.
• Bank interest certificates, and capital gains statements from your broker or mutual fund RTA if applicable.
• Proof of deductions claimed under the old regime — 80C investment receipts, health insurance premium receipts, home loan interest certificate from your lender.
• Rent receipts and your landlord's PAN (if claiming HRA above a threshold) under the old regime.
• Bank account details for refund credit, and your Aadhaar linked to PAN for e-verification of the return.

Most of the return is now pre-filled from your Form 16, AIS, and bank/broker reporting — the actual work is mainly verifying those pre-filled figures, adding anything your employer was never told about, and choosing the regime the comparison above favours.

The two regimes aren't just different slab rates — they allow fundamentally different deductions:

• Old regime: Section 80C (up to ₹1.5 lakh — PF, PPF, ELSS, life insurance, principal on home loan, and more), Section 80D (health insurance premium), HRA exemption, home loan interest under Section 24(b), and several other itemised deductions, in exchange for a lower standard deduction and higher slab rates than the new regime.
• New regime: A higher standard deduction for salaried/pension income, employer's NPS contribution under Section 80CCD(2), and a small number of other specified deductions — but most itemised deductions (80C, 80D, HRA, home loan interest on a self-occupied property) are not available.

This is why the same gross income can produce very different tax outcomes across regimes depending on how much of your income is already tied up in 80C-eligible instruments, health insurance, or a home loan — the calculator's Chapter VI-A input above is where you capture that old-regime advantage.

Holding your regime, age category, and deduction inputs constant, here is how estimated tax and effective rate move across a few common gross income levels:

Because India's slab system is progressive, only the income within each higher slab is taxed at that slab's rate — crossing a slab boundary doesn't push your entire income to the new rate, which is why the effective rate rises gradually rather than jumping sharply at each threshold.

• Assuming the regime that was better last year is automatically better this year — a change in deductions, income, or the annual Budget's slab revisions can flip the answer.
• Thinking crossing a slab boundary taxes all your income at the higher rate — only the portion within that slab is taxed at it.
• Forgetting that Section 87A rebate has an income ceiling — a small increase in taxable income right at the boundary can remove the entire rebate, not just tax the extra amount.
• Not accounting for surcharge at high income levels — this calculator models slabs, rebate, and cess, but real filings above certain income thresholds add a surcharge this illustration does not include.
• Mixing up old-regime deductions (80C, HRA, home loan interest) with new-regime allowances (employer NPS, standard deduction) — claiming an old-regime-only deduction while filing under the new regime is a common, avoidable error.
• Not reconciling Form 26AS/AIS against your own records before filing — mismatches between what's reported against your PAN and what you declare can trigger notices even when the underlying tax was paid correctly.

Neither regime wins by default — it comes down to your specific deductions and income, which is exactly what the side-by-side comparison table above answers using your own numbers instead of a generic rule.