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Income Tax Calculator for Salaried Employees (FY 2026–27)

Compare Old vs New Tax Regime and see how much TDS your employer deducts every month.

Designed for salaried professionals, this income tax calculator helps you compare Old vs New Tax Regime for FY 2026–27 (AY 2027–28) and choose the option that saves you more tax.

Enter total annual salary (before tax)

Old Regime Deductions (Optional)

Not applicable under New Tax Regime.

Includes LTA (Sec 10(5)), 80E, 80G, etc.

This calculator is primarily intended for salaried individuals. It does not account for complex income sources such as capital gains or business income.

Income Tax Slab Comparison (FY 2026-27)

IncomeNew RegimeOld Regime
Up to ₹2.5LNilNil
₹2.5L – ₹4LNil5%
₹4L – ₹5L5%5%
₹5L – ₹8L5%20%
₹8L – ₹10L10%20%
₹10L – ₹12L10%30%
₹12L – ₹16L15%30%
₹16L – ₹20L20%30%
₹20L – ₹24L25%30%
Above ₹24L30%30%

Standard Deduction for Salaried Employees (FY 2026-27)

The standard deduction is a fixed amount that salaried employees and pensioners can reduce from their annual gross salary before calculating income tax. It does not require any bills, proofs, or investments.

Standard Deduction under New Tax Regime (FY 2026-27)

Under the New Tax Regime, the standard deduction is ₹75,000 for salaried individuals and pensioners. This directly reduces your taxable salary and lowers your employer TDS deduction.

Standard Deduction under Old Tax Regime (FY 2026-27)

Under the Old Tax Regime, the standard deduction remains ₹50,000. It is automatically reduced from your salary income before applying tax slabs.

Who Can Claim Standard Deduction?

  • Salaried employees (private & government sector)
  • Pensioners receiving regular pension

Our Income Tax Calculator automatically applies the correct standard deduction based on the tax regime you choose, so you can instantly see how it impacts your annual tax and monthly TDS.

Income Tax Deductions for Salaried Employees (Old Tax Regime – FY 2026-27)

Under the Old Tax Regime, salaried employees can reduce their taxable salary by claiming deductions under various sections of the Income Tax Act. These deductions significantly lower overall tax liability and monthly employer TDS.

Section 80C (Maximum ₹1.5 Lakh)

Salaried individuals can claim up to ₹1,50,000 under Section 80C.

  • Employees’ Provident Fund (EPF – automatically deducted from salary)
  • Public Provident Fund (PPF)
  • ELSS Mutual Funds
  • Life Insurance Premium (LIC)
  • Children’s Tuition Fees
  • Principal repayment of Home Loan

Section 80D – Health Insurance

Deduction for medical insurance premium paid for self, spouse, children, and parents.

  • Up to ₹25,000 for self & family
  • Additional ₹25,000 for parents (₹50,000 if parents are senior citizens)

Section 24(b) – Home Loan Interest

Up to ₹2,00,000 per year can be claimed on interest paid for a self-occupied house property. This is especially beneficial for salaried professionals with housing loans.

HRA (House Rent Allowance)

Salaried individuals living in rented accommodation can claim HRA exemption. The exemption depends on:

  • Basic salary
  • HRA received from employer
  • Rent paid
  • City of residence (metro or non-metro)

HRA Calculator

Instantly calculate your HRA exemption under the Old Tax Regime.

Section 80CCD(1B) – NPS (Additional ₹50,000)

An extra deduction of ₹50,000 is available for contributions to the National Pension Scheme (NPS), over and above the ₹1.5 lakh 80C limit.

Other Important Deductions

  • Section 80E – Education Loan Interest (no upper limit, interest only)
  • Section 80G – Donations to approved charities
  • Section 80TTA/80TTB – Interest on Savings Account

Are These Deductions Available in the New Tax Regime?

Most salary-related deductions such as 80C, 80D, HRA, and home loan interest are not available under the New Tax Regime. However, the New Regime offers lower tax slab rates and a higher standard deduction of ₹75,000.

Salaried employees with high investments, home loans, or rent payments often benefit more from the Old Tax Regime. Our Income Tax Calculator compares both regimes instantly to help you decide.

FAQs on Income Tax

Which tax regime is better for salaried employees in FY 2026-27?
It depends on your total deductions. If you claim high deductions such as 80C, HRA, home loan interest, and 80D, the Old Tax Regime may reduce your tax more. If you have fewer deductions, the New Tax Regime with lower slab rates and a ₹75,000 standard deduction may result in lower tax.
Is standard deduction available in the New Tax Regime?
Yes. For FY 2026-27, salaried individuals and pensioners can claim a ₹75,000 standard deduction under the New Tax Regime and ₹50,000 under the Old Tax Regime.
How is monthly TDS calculated for salaried employees?
Employers estimate annual tax liability based on salary and declared deductions, then divide it across remaining months in the financial year. The income tax calculator shows estimated monthly TDS under both tax regimes.
Can salaried individuals switch between Old and New Tax Regime every year?
Yes. Salaried individuals can choose between the Old and New Tax Regime every financial year while filing income tax return. Different rules apply for business income cases.
Are Section 80C and HRA allowed in the New Tax Regime?
No. Most deductions such as Section 80C, 80D, HRA, and home loan interest are not available under the New Tax Regime. However, standard deduction and employer NPS contributions are allowed.
What is the rebate under Section 87A in FY 2026-27?
Eligible taxpayers with taxable income within prescribed limits can claim rebate under Section 87A, which can reduce tax liability to zero depending on the selected tax regime.
Does the income tax calculator include 4% cess?
Yes. The calculator includes 4% Health and Education Cess while computing total tax payable under both Old and New Tax Regimes.
Is this income tax calculator suitable for private and government employees?
Yes. The calculator is designed for salaried professionals in both private and government sectors, including pensioners.