India Old vs New Tax Regime Comparison

Restricted-scope tax comparison

Effective rate = estimated total tax divided by gross interest before deductions. A lower figure here is not advice to elect that regime. No TDS credit, refund, advance tax, interest or penalties are calculated.

Verified year-specific rates and calculation order

Parameters below were checked against the Income Tax Department's AY 2026-27 individual guidance. The page is titled for salaried individuals, but this edition uses only its ordinary individual rates, resident rebates, surcharge, cess and listed deductions; no salary-specific computation is used.

• Old regime, under 60: 0% through INR 250,000; 5% on the next INR 250,000; 20% from INR 500,000 to 1,000,000; 30% above INR 1,000,000.
• New regime: 0% through INR 400,000; then 5%, 10%, 15%, 20% and 25% on each successive INR 400,000 band through INR 2,400,000; 30% above that.
• Resident Section 87A rebate: old-regime taxable income at or below INR 500,000 gets up to INR 12,500; new-regime taxable income at or below INR 1,200,000 gets up to INR 60,000. Rebate cannot exceed slab tax.
• Ordinary-income surcharge: 10% above INR 50 lakh through 1 crore; 15% above 1 crore through 2 crore; 25% above 2 crore. Old regime rises to 37% above 5 crore; new remains at 25%. Thresholds use taxable income after allowed deductions, not gross interest.
• Surcharge marginal relief: at each increasing surcharge tier, tax plus surcharge is limited to tax including surcharge at that threshold plus income above it. Old thresholds: 50 lakh, 1 crore, 2 crore and 5 crore; new: 50 lakh, 1 crore and 2 crore. This relief is separate from Section 87A rebate relief.
• Health and Education Cess: 4% of income tax plus surcharge after rebate and applicable surcharge relief.

Calculation order: gross FD interest minus allowable deductions = taxable income; apply progressive slabs; subtract rebate; add nominal surcharge; subtract surcharge marginal relief; then add 4% cess. The new regime does not subtract the 80C/80D inputs. No standard deduction is applied because salary and pension are unsupported. This is not a statement that all deductions are disallowed under the new regime: exceptions such as eligible employer NPS contributions are outside this edition.

The new regime is the default. The Department's guidance describes annual selection for non-business taxpayers in a timely filed return; an employer declaration is not the final election. This tool does not verify filing eligibility, deadlines or resolve late-return cases.

Verification limits: what is deliberately withheld

The applicable Finance Act text and official numerical worked examples were not independently inspected because official document access failed during verification. This limited edition relies on the Department's year-specific guidance rather than claiming a complete statutory review. Salary standard deductions and revised Section 87A marginal relief above INR 12 lakh were not independently verified and are not implemented.

For new-regime taxable income above INR 1,200,000, if ordinary slab tax exceeds the income above that amount, a verification guard withholds the new total, cess, effective rate and comparison. For example, INR 1,210,000 gets no new-regime result. At INR 1,280,000, slab tax is INR 72,000, below the INR 80,000 excess, so that possible relief cannot reduce the slab amount. This guard is not a statutory cutoff or a substitute relief formula. The old-regime calculation remains visible.

No FY 2026-27 or second-year rates are assumed. No salary, pension, capital gains, dividends, special-rate income, business income, savings-interest deduction, house property, agricultural-income integration, foreign income, residency determination, losses, clubbing or other deductions are supported. These can alter eligibility, tax and the apparent regime difference. Do not enter them as FD interest.

Calculations use entered rupees and paise without statutory nearest-INR-10 return rounding; the applicable rounding provisions were not independently verified. Figures are unrounded tax estimates formatted to two decimals, not exact tax payable. TDS is a credit against final liability, not an income deduction; bank withholding is not estimated here.

Hand-checkable examples, not official worked examples

At INR 24 lakh FD interest with no deductions, new slab tax is INR 20,000 + 40,000 + 60,000 + 80,000 + 100,000 = INR 300,000; with 4% cess, INR 312,000. Old slab tax is INR 12,500 + 100,000 + 420,000 = INR 532,500; with cess, INR 553,800. Neither receives a rebate or surcharge.

At INR 10 lakh interest with eligible INR 150,000 under 80C and INR 25,000 under 80D, old taxable income is INR 825,000. Old slab tax is INR 12,500 + 20% of INR 325,000 = INR 77,500; with cess, INR 80,600. Without those deductions old tax is INR 117,000: the tax saving is INR 36,400, not the INR 175,000 deduction. New taxable income stays INR 10 lakh and its rebate reduces tax to zero.

Just above the surcharge threshold, at INR 5,000,100 old taxable income, slab tax is INR 1,312,530. With nominal 10% surcharge it is INR 1,443,783, but the relief cap is INR 1,312,500 + 100. Relief is INR 131,183, leaving INR 1,312,600 before cess and INR 1,365,104 after cess.

Official source and responsible use

Income Tax Department: Salaried Individuals for AY 2026-27 provides the year-specific rate tables, rebates, surcharge/marginal-relief explanation, cess, deduction limits and regime-selection guidance used here. Check its displayed assessment year before reusing these figures; this source may be updated for later years.

Reverify the Finance Act, revised rebate relief and rounding rules before expanding this tool. Recheck rates and eligibility for every new year; this edition does not automatically roll forward.

Educational estimates only, not personalized tax, investment or filing advice. Consult a qualified Indian tax professional using your complete income facts. See disclosures, calculator methodology and editorial policy. Report a calculation error.