MyCalculatorHow this is calculated
Taxable income is gross salary minus the ₹75,000 standard deduction. Tax is calculated progressively across the New Regime slabs (nil up to ₹4L, then 5%/10%/15%/20%/25%/30% in ₹4L steps up to ₹24L). If taxable income is ₹12,00,000 or below, the Section 87A rebate fully cancels the tax (up to ₹60,000) — making salaries up to ₹12,75,000 effectively tax-free. Above that, tax applies on the full taxable amount with no partial relief, which creates a "cliff-edge" — earning just above the threshold can leave you with less take-home pay than earning exactly at it. Surcharge (10%/15%/25%) applies above ₹50L/₹1cr/₹2cr taxable income, and a 4% Health & Education Cess applies to the final tax-plus-surcharge amount.
Worked examples
₹15,00,000 gross: taxable income ₹14,25,000 (above the rebate threshold). Tax before cess: ₹93,750. Cess: ₹3,750. Total tax: ₹97,500. Take-home: ₹14,02,500.
₹12,75,000 gross (the zero-tax boundary): taxable income exactly ₹12,00,000. The 87A rebate fully cancels the tax. Take-home: the full ₹12,75,000.
₹13,00,000 gross (just above the boundary): taxable income ₹12,25,000 — no rebate applies. Tax before cess: ₹63,750; with cess, total tax ₹66,300. Take-home: ₹12,33,700 — over ₹41,000 less than someone earning ₹25,000 less, illustrating the cliff-edge effect of the 87A threshold.
Assumptions & limitations
- New Tax Regime only. The Old Regime (HRA, Section 80C/80D, home loan interest, etc.) is not modeled — if your deductions are substantial, compare against the Old Regime separately.
- Assumes a resident individual under 60. Senior/super-senior citizen slab benefits apply only under the Old Regime.
- NRIs cannot claim the Section 87A rebate — this calculator assumes resident status.
- Does not include employer/employee Provident Fund (EPF) contributions, professional tax, or other statutory deductions that may apply to your actual payslip.
Sources
Finance Act 2025 (New Tax Regime slabs, standard deduction and Section 87A rebate, unchanged for FY 2026-27 per Union Budget 2026). See our sources page.
Frequently asked questions
Is the New Regime always better than the Old Regime?
Not necessarily. If you claim large deductions (HRA, home loan interest, Section 80C investments), the Old Regime may result in lower tax. This calculator covers the New Regime only.
Why does earning slightly more sometimes leave me with less take-home pay?
The Section 87A rebate is an all-or-nothing threshold at ₹12,00,000 taxable income — cross it by even ₹1 and the full tax applies with no partial relief, creating a "cliff-edge" around that point.
Does this apply to FY 2026-27 too?
Yes — the Union Budget 2026 retained the FY 2025-26 New Regime slabs unchanged for FY 2026-27.