Income Tax Calculator for Tax Year 2026–27
An income tax calculator is a tool that calculates how much income tax you're likely to owe for the Tax year 2026-27 (1 April 2026 to 31 March 2027) based on what you earn and any deductions you have. It then shows you both the old and new tax regimes so you can work out which one is better for you.
Basic Details
Investment Details
Loan Interest Details
What is an Income Tax Calculator?
An income tax calculator is an online tool that calculates your income tax for tax year 2026-27. You put in your income, investments, and loan interest information and it uses the rates, deductions, and rebates of both the old and new regime, then shows you roughly what you will need to pay.
The Income Tax Calculator is a simple, three-step process. You provide your basic details, investment details and loan interest details. Once that is done, you are shown your taxable income and tax under both regimes side-by-side, so you do not have to guess which is right for you.
Your results are not your actual tax, which will be determined by your income records (Form 16/IT Department Records). Use it to plan ahead. If you choose to go in the old tax regime, it helps you understand how much you can save on your taxes by making tax-saving investments like buying life insurance.
How to Use the Income Tax Calculator?
Fill out the form in the order below. Input your yearly income and not monthly income. Calculations are based on Tax Year 2026-27
- Tax Year 2026–27 should be the default option.
- Provide the rest of the basic in the form, and input your age.
- Input your yearly income, not monthly.
- Add in any eligible deductions you have. This part only really makes a difference if you are using the old regime.
- Then, find out the answer.
The result is your taxable income and tax under each regime, but does not take into account tax paid (TDS/Advance Tax).
Keep your salary slip or Form 16 handy. It will have your gross salary and tax already deducted. Test both regimes with the same income to see the difference clearly.
How can an Income Tax Calculator Help You?
An Online Income Tax Calculator can help an individual to calculate their taxable income. It also helps you to maximise your tax savings.
An Online Income Tax Calculator helps you with the following.
- To estimate tax liability: Shriram Life Income tax calculator helps you determine the amount of tax you should pay for the year based on your income, deductions and other factors.
- Planning finances: An online tax calculator estimates tax liability and helps to plan finances accordingly.
- Optimising deductions: Online Income Tax Calculator helps you understand how different deductions can impact your taxes, allowing you to optimize your tax-saving strategies.
Key Features and Benefits of Online Tax Calculator
It shows you both the old and new tax regimes so you can work out which one is better for you.
Easy-to-use calculator
The benefits of an Online Income Tax Calculator are
- Calculates your tax liability
- Estimates the amount of tax owed to the government
- Free to use
- Easy-to-use interface
Experience the ease of home utilisation
An income tax calculator can be conveniently used from home, eliminating the need to step out. Accessible online, it ensures a hassle-free experience while calculating your income tax.
Provides estimated tax expense and Comprehensive Information
The result is your taxable income and tax under each regime. Test both regimes with the same income to see the difference clearly.
Facilitates Advanced Expense Management
By using an income tax calculator to estimate your tax payment, you can effectively plan your finances in advance. This allows you to manage your expenses and other financial requirements without any future hassle.
Steps to Use Online Income Tax Calculator
It is very easy and simple to use the Shriram Life Online Income Tax Calculator.
Step 01
Enter the basic details on the website.
Step 02
Enter the investment details.
Step 03
Enter the Loan interest details.
Step 04
With the provided information, the calculator will give you the Income tax you
should pay under both the old and new tax regimes.
Understanding the Basics of Income Tax in India
Income tax is the contribution individuals and businesses make to the government based on their annual earnings. It helps fund public services, development projects, and welfare schemes. Understanding how it works makes financial planning easier. The sections below explain key concepts like Tax Year and taxable income.
What is Tax Year?
A Tax Year is a period of twelve months that starts on 1 April and ends on 31 March. This period is when income is earned. The Income‑tax Act 2025 replaces the earlier term "Previous Year" and "Assessment Year"
- Tax Year: 1 April 2026 – 31 March 2027
- Tax returns and tax payments are governed by the applicable rules for that Tax Year.
For earlier income earned before 1 April 2026, the Previous year and Assesment year still apllies
What is Taxable income?
Taxable income is the total income on which tax is calculated after deducting eligible exemptions and deductions. It includes salary, rent, business profits, and even interest from savings accounts.
For example, if your annual income is ₹10 lakh and you claim deductions worth ₹1.5 lakh, your taxable income becomes ₹8.5 lakh. Knowing how to calculate income tax on savings bank interest helps ensure accurate reporting.
Income Tax Updates for Tax Year 2026–27
With the implementation of the Income-tax Act, 2025 on 1 April 2026, the 1961 Act stands repealed. By using the income tax calculator can help you to estimate your liability under the new Act.
- Tax slabs and the ₹12 lakh rebate limit remain the same for Tax Year 2026–27
- Sections have been renumbered: the rebate under section 87A is now section 156
- "Previous Year" and "Assessment Year" have changed into "Tax Year"
Comparing FY 2025-26 & Tax Year 2026-27
Comparing FY 2025-26 (AY 2026-27) and Tax Year 2026-27 helps plan taxes and investments effectively. Tools like an income tax calculator make it easier to estimate liabilities and optimise deductions. The slabs stay the same; the main change is the new Income-tax Act, 2025.
| Feature | FY 2025-26 (AY 2026-27) | Tax Year 2026-27 |
|---|---|---|
| Tax slabs (new regime) | Nil up to ₹4 lakh, then 5% to 30% | Same |
| Rebate (new regime) | Up to ₹60,000 if taxable income is up to ₹12 lakh (section 87A) | Same, now section 156 |
| Standard deduction | ₹75,000 (new), ₹50,000 (old) | Same |
| Deductions | 80C, 80D, 80TTA (old regime) | Same deductions, under new section numbers (old regime) |
| Savings bank interest | Taxable | Taxable |
| Law and year terms | Income Tax Act, 1961; FY and AY | Income-tax Act, 2025; Tax Year |
Eligibility for Exemptions in the Old and New Tax Regime
The Indian tax system offers two options: the old regime with multiple exemptions and deductions, and the new regime with lower tax rates but limited exemptions. Choosing the right one depends on your income, investments, and financial goals. Using an income tax calculator can help you compare both regimes and decide which suits you better.
- Old Regime: Allows deductions such as eligible savings/investments up to ₹1.5 lakh, health insurance premium, HRA, and the ₹50,000 standard deduction.
- New Regime: Offers simplified tax rates with fewer deductions; the ₹75,000 standard deduction and employer NPS contribution are allowed.
Examples Based on Old and New Tax Regimes
New tax regime
Under the new tax regime, income up to INR 4 lakh per annum is tax exempted, and the rebate makes taxable income up to INR 12 lakh tax-free. The income tax rates for the new regime are below.
| S.no. | Income Slabs | Tax Rates (all ages) |
|---|---|---|
| 1. | Till INR 4 LPA | Nil |
| 2. | Above INR 4 LPA – INR 8 LPA | 5% on the income above INR 4 LPA |
| 3. | Above INR 8 LPA – INR 12 LPA | 20,000 + 10% on income above INR 8 LPA |
| 4. | Above INR 12 LPA – INR 16 LPA | 60,000 + 15% on income above INR 12 LPA |
| 5. | Above INR 16 LPA – INR 20 LPA | 1,20,000 + 20% on income above INR 16 LPA |
| 6. | Above INR 20 LPA – INR 24 LPA | 2,00,000 + 25% on income above INR 20 LPA |
| 7. | Income above INR 24 LPA | 3,00,000 + 30% on income above INR 24 LPA |
A maximum rebate of Rs. 60,000 is allowed under section 156 (earlier 87A), if the taxable income of an individual is up to Rs. 12,00,000. Marginal relief is provided just above the limit.
Scenario 1
If your yearly income is 6.5 lakhs, it falls within the 4–8 lakh slab of the new tax regime and is below the INR 12 lakh rebate limit. In this case, you are not required to pay taxes to the income tax department. However, filing a nil Income Tax Return (ITR) is recommended.
Scenario 2
If your yearly salary is 15 lakhs, your taxable income after the ₹75,000 standard deduction is ₹14,25,000. It falls within the 12–16 lakh slab and is above the INR 12 lakh rebate limit. Therefore, you are liable to pay income tax of ₹97,500 (including 4% cess).
Old regime
Under the old tax regime, income up to INR 5 lakh per annum is tax exempted. Below are the income tax rates for the old regime.
| S.no. | Income Slabs | Tax Rates (age up to 60 years) |
|---|---|---|
| 1. | Till INR 2.5 LPA | Nil |
| 2. | Above INR 2.5 LPA – INR 5 LPA | 5% on the income above INR 2.5 LPA (if net income is above INR 5 LPA) |
| 3. | Above INR 5 LPA – INR 10 LPA | 12,500 + 20% on income above INR 5 LPA |
| 4. | Income above INR 10 LPA | 1,12,500 + 30% on income above INR 10 LPA |
A maximum rebate of Rs. 12,500 is allowed under section 156 (earlier 87A), if the taxable income of a resident individual is up to Rs. 5,00,000.
Scenario 1
If your yearly income is 4 lakhs, it falls within the old tax regime's 2.5–5 lakh slab. In this case, you are not liable to pay the income tax. However, filing a nil Income Tax Return (ITR) is recommended.
Scenario 2
If your annual income is 7 lakhs and you have chosen the old tax regime, your income falls within the 5-10 lakh slab, exceeding the INR 5 lakh threshold, requiring you to pay tax.
Types of Deductions Available for Salaried Individuals
Receiving the HRA Component
For salaried persons who have taken a house on rent, this exemption is applicable only under the old regime. Salary here means basic salary plus DA. Additionally, one cannot claim the complete amount paid as a rental expense. The exemption will be based on the lowest of the options listed below.
- Actual rent paid minus 10% of salary
- HRA component allocated by the employer
- 50% of the salary if a salaried person is living in a metropolitan city, 40% otherwise
Case Study
Ram is working in Chennai, a metropolitan city. He lives in a rented apartment that costs him INR 20,000 monthly. His basic salary is INR 40,000, and he receives INR 10,000 as an HRA component.
| S.no. | Yearly Particulars | Rented expense | Exempted HRA value |
|---|---|---|---|
| 1. | Rent paid – 10% of salary | (20,000 x 12) – 10%*(40,000*12) | 1,92,000 |
| 2. | HRA received | NA | 10,000 x 12 = 1,20,000 |
| 3. | City component | 50%*(40,000*12) | 2,40,000 |
The lowest amount in the exempted HRA column is 1,20,000. So, Ram can claim for the deductions of INR 1,20,000. *Annual rent above INR 1 lakh requires the landlord’s PAN card for income tax filing.
Individuals not Receiving HRA
For salaried/self-employed persons who do not receive house rent allowance (HRA) and have taken a house on rent. Similar to individuals receiving HRA and having taken a house on rent, one cannot claim the complete amount paid for rent. This deduction is available only under the old regime.
- Actual rent paid minus 10% of total income
- INR 60,000 yearly (INR 5000 per month)
- 25% of total income
Case Study
Ram is a working professional. He lives in a rented apartment, which costs him INR 20,000 monthly. His yearly total income is INR 6 lakhs, and he does not receive an HRA component.
| S.no. | Yearly Particulars | Rented expense | Exempted value for rent expense |
|---|---|---|---|
| 1. | Rent paid – 10% of total income | (20,000 x 12) – 10%*(40,000*12) | 1,92,000 |
| 2. | INR 5000 per month | Nil | 60,000 |
| 3. | 25% of total income | 25%*(6,00,000) | 1,50,000 |
The lowest amount in the exempted value for rent expense column is 60,000. So, Ram can claim for the deductions of INR 60,000.
FAQ's
If I earn ₹12 lakh a year, how much income tax will I pay in Tax Year 2026–27?
If you earn ₹12 lakh as a salary, your new tax rate is zero. After the deduction of the standard deduction of ₹75,000, your taxable income is ₹11,25,000, which falls under the new tax regime's threshold of ₹12 lakh.
In the old tax regime, your tax would be approximately ₹1,63,800 if you only used the standard deduction. If you add more deductions to your salary, the tax amount will be lower. To find the exact tax amount for your salary, you can use a tax calculator.
Can a ₹12.75 lakh salary mean zero tax under the new regime?
Usually, the answer is yes, in simple income cases. The standard tax deduction of ₹75,000 reduces the taxable income to ₹12 lakh. The tax rebate of up to ₹60,000 makes the income tax nil, assuming you have no special-rate income and are eligible for the rebate.
What are the income tax slabs for Tax Year 2026–27?
Under the new tax system, income up to ₹4 lakh is tax-exempt. From that point, tax rates rise by 5% per ₹4 lakh slab, reaching 25%, and everything above ₹24 lakh is taxed at 30%. The old tax system, meanwhile, has 5%, 20%, and 30% slabs, and its tax-free limit is determined by your age.
Which is better: the old or new tax regime?
It all comes down to your deductions. The new rules are perfect for people with few deductions. However, if you claim a lot, the old rules might still be your best choice. If you earn ₹15 lakhs, the new rules only make sense once your deductions exceed ₹5.44 lakhs, in addition to the standard deduction.
How do I calculate income tax on my salary?
Take your gross salary and subtract any deductions you're allowed to make, including the standard deduction. Next, calculate the tax on your remaining taxable income based on the tax brackets. If you qualify for a rebate, subtract it. If you need to pay a surcharge, add it. Finally, tack on the 4% cess. The example above goes through all of this step by step.
