The new regime is the default from tax year 2026-27 (Income-tax Act, 2025, section 202). Salaried employees can pick the old regime each year when filing the return.
Old-regime HRA uses the eight 50% cities listed in the Income-tax Rules, 2026; elsewhere the limit is 40% of basic + DA.
Capital gains taxed at special rates, agricultural income and perquisites such as employer PF above ₹7.5 lakh are not included.
This is an estimate based on published rates, not tax or financial advice. Your payslip or assessment may differ. We are an independent site, not affiliated with any government agency.
New regime slabs 2026-27
Taxable income
Rate
Up to ₹4,00,000
Nil
₹4,00,001 – ₹8,00,000
5%
₹8,00,001 – ₹12,00,000
10%
₹12,00,001 – ₹16,00,000
15%
₹16,00,001 – ₹20,00,000
20%
₹20,00,001 – ₹24,00,000
25%
Above ₹24,00,000
30%
Old regime slabs 2026-27
Taxable income
Below 60
60 to 79
80 and over
Up to ₹2,50,000
Nil
Nil
Nil
₹2,50,001 – ₹3,00,000
5%
Nil
Nil
₹3,00,001 – ₹5,00,000
5%
5%
Nil
₹5,00,001 – ₹10,00,000
20%
20%
20%
Above ₹10,00,000
30%
30%
30%
Both regimes add a 4% health and education cess on the tax. Surcharge applies above ₹50 lakh (10%), ₹1 crore (15%) and ₹2 crore (25%); the 37% rate above ₹5 crore exists only in the old regime.
Worked example: ₹15 lakh salary
Salary ₹15,00,000, basic ₹6 lakh, HRA ₹3 lakh, rent ₹2.4 lakh, metro
In the new regime taxable income is ₹14,25,000 and the tax is ₹97,500. In the old regime – after the HRA exemption, ₹1.5 lakh under 80C (including EPF), ₹25,000 under 80D and the ₹50,000 standard deduction – it is ₹1,54,627.
Tax – new regime₹97,500₹8,125 a month TDS
Tax – old regime
₹1,54,627₹12,886 a month TDS
New regime saves you
₹57,127choose the new regime
Tax year 2026-27, side by side
New regime
Old regime
Gross salary + other income
₹15,00,000
₹15,00,000
Standard deduction
-₹75,000
-₹50,000
HRA exemption
₹0
-₹1,80,000
Professional tax
₹0
-₹2,400
Section 80C (incl. employee PF)
₹0
-₹1,22,000
Section 80D health insurance
₹0
-₹25,000
Taxable income
₹14,25,000
₹11,20,600
Tax on slabs
₹93,750
₹1,48,680
Rebate / marginal relief
₹0
₹0
Surcharge
₹0
₹0
Health & education cess (4%)
₹3,750
₹5,947
Total tax
₹97,500
₹1,54,627
Effective rate
6.5%
10.3%
Deductions that only work in the old regime
HRA exemption – the lowest of actual HRA, rent minus 10% of basic, and 50% of basic (40% outside the eight listed cities). See the HRA calculator.
Section 80C – up to ₹1.5 lakh for EPF, PPF, ELSS, life insurance, tuition fees and home-loan principal.
Section 80D – health insurance up to ₹25,000 for your family and ₹25,000 for parents (₹50,000 each if senior citizens).
Section 80CCD(1B) – an extra ₹50,000 for your own NPS contributions.
Home-loan interest – up to ₹2 lakh on a self-occupied home.
Professional tax – up to ₹2,500 a year.
Both regimes allow the employer’s NPS contribution (up to 14% of basic in the new regime, 10% in the old regime for private employers).
Questions people ask
Is income up to ₹12 lakh tax-free in 2026-27?
Yes, in the new regime. The rebate of up to ₹60,000 cancels the tax on taxable income up to ₹12 lakh, and salaried employees also get the ₹75,000 standard deduction, so a salary of up to ₹12.75 lakh is tax-free.
How much tax on a ₹15 lakh salary?
About ₹97,500 in the new regime (taxable income ₹14.25 lakh after the standard deduction). In the old regime it depends on your deductions – with HRA, 80C and 80D it is often still higher at this level.
Which regime is better for me?
The new regime wins for most salaried people because of its wider slabs and ₹12 lakh rebate. The old regime can still be cheaper if you combine a large HRA exemption, full 80C, 80D, NPS and home-loan interest – compare both with your own numbers.
What happens just above ₹12 lakh?
Marginal relief applies. Your tax cannot exceed the income above ₹12 lakh, so at ₹12,10,000 of taxable income the tax is ₹10,000 plus 4% cess, not ₹61,500.
Can I switch regimes every year?
Salaried employees without business income can choose the old regime each year when filing the return. Tell your employer at the start of the year so TDS matches your choice.
This is an estimate based on published rates, not tax or financial advice. Your payslip or assessment may differ. We are an independent site, not affiliated with any government agency. Read the full disclaimer.
