Income Tax Estimator

What the Income Tax Estimator Does

You enter an annual income and it works out the tax band by band under India's new regime, applies the Section 87A rebate, and shows the estimated tax and what is left as take-home. Under the new regime, income up to ₹12 lakh comes out tax-free.

It is a quick estimator, not a filing tool. It uses the FY 2026-27 new-regime slabs (unchanged by Budget 2026 from Budget 2025), before the 4% health and education cess, any surcharge on high incomes, and the standard deduction that salaried people get.

How It Works

The income is split into bands, each taxed at its own rate — nil up to ₹4 lakh, then 5, 10, 15, 20, 25 and 30 percent on successive ₹4 lakh bands. The tool adds the tax from each band, then applies the Section 87A rebate, which zeroes the tax entirely when your income is up to ₹12 lakh.

This is a marginal system: moving into a higher band raises the rate only on the income above the threshold, not on the whole amount. The take-home is the income minus the estimated tax.

Methodology

1. Read the income. Take the annual income figure you enter (before the standard deduction).
2. Tax each band. Apply each new-regime band's rate only to the income within that band, and add them up.
3. Apply the ₹12 lakh rebate. Under Section 87A, if your income is up to ₹12 lakh the rebate zeroes the tax.
4. Show tax and take-home. Display the estimated tax and the income left after it.

FY 2026-27 new-regime slab tax

The rebate is worth up to ₹60,000 — exactly the tax at ₹12 lakh — so income up to ₹12 lakh pays nothing. Just above ₹12 lakh a marginal-relief provision softens the jump; this estimate applies the rebate as nil up to ₹12 lakh and does not model that narrow band. Salaried taxpayers also get a ₹75,000 standard deduction (so about ₹12.75 lakh can be tax-free), which is not applied here.

Assumptions

• It uses the FY 2026-27 (assessment year 2027-28) new regime, which is the default regime. Budget 2026 kept the slabs and the ₹12 lakh rebate introduced in Budget 2025.
• It taxes the income you enter directly. It does not subtract the ₹75,000 standard deduction that salaried taxpayers and pensioners get — enter your income after that deduction for a closer figure.
• It is before the 4% health and education cess and any surcharge on high incomes (above ₹50 lakh), both of which are added on top of the tax shown.
• The Section 87A rebate is applied as nil tax up to ₹12 lakh. The narrow marginal-relief band just above ₹12 lakh is not modelled, so tax can be slightly overstated there.
• It shows the new regime only. The old regime, with deductions like 80C and HRA, is not calculated; which regime is lower depends on your deductions.

Standards & references

• New tax regime (FY 2026-27, default) — the default regime since FY 2023-24. Bands are nil up to ₹4 lakh, then 5, 10, 15, 20, 25 and 30 percent on successive ₹4 lakh bands. Budget 2026 left the Budget 2025 structure unchanged.
• Section 87A rebate — under the new regime, taxable income up to ₹12 lakh gets a full rebate (worth up to ₹60,000), so the tax is nil. With the ₹75,000 standard deduction, a salaried person can be tax-free up to about ₹12.75 lakh.
• Cess and surcharge (not applied) — a 4% health and education cess is charged on the tax, and a surcharge applies to incomes above ₹50 lakh. This estimate is before both, so for higher incomes the real figure is a little higher.

Accuracy & Limitations

The slab arithmetic is exact for the new regime: each band is taxed at its rate and summed, and the Section 87A rebate zeroes the tax up to ₹12 lakh — so a ₹12 lakh income correctly shows nil.

It is before the 4% health and education cess and any surcharge. Above ₹12 lakh, expect the real tax to be roughly 4% higher once cess is added, and higher still above ₹50 lakh where a surcharge applies.

It does not apply the ₹75,000 standard deduction that salaried taxpayers get. Enter your income after that deduction for a closer estimate — which also means salaried income up to about ₹12.75 lakh can be tax-free.

Just above ₹12 lakh, a marginal-relief provision means the tax does not jump to the full slab amount at once. This estimate applies the rebate as nil up to ₹12 lakh and does not model that narrow relief band, so it can overstate tax slightly there.

It shows the new regime only and assumes a resident individual. The old regime (with 80C, HRA and other deductions) and senior-citizen specifics are not calculated; for filing, use the tax department's calculator or a professional.

Real-World Use Cases

When to use it — and when not to

For a filing-grade figure, use the Income Tax Department's own calculator or a tax professional, and add the 4% cess and any surcharge. To compare the old regime, use a tool that applies your deductions (80C, HRA and so on).

Frequently Asked Questions

References

• Income Tax Slabs FY 2026-27 (AY 2027-28) (ClearTax)
• Income Tax Rebate Under Section 87A (ClearTax)
• Income Tax Department of India

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