Income tax calculator
Enter your annual income and see exactly what you owe — slabs, rebate, surcharge, and cess, all worked out live.
Total tax payable (annual)
₹0
Estimate only, not tax advice. Verify with a chartered accountant or at incometaxindia.gov.in before filing or deciding. Full disclaimer.
| Gross annual income | ₹12,00,000 |
| Standard deduction | ₹75,000 |
| Taxable income | ₹11,25,000 |
| Tax after rebate/relief | ₹0 |
| Surcharge | ₹0 |
| Health & education cess (4%) | ₹0 |
| Total tax (annual) | ₹0 |
How income tax is actually calculated
Most confusion about income tax comes from one wrong assumption: that your entire income gets taxed at whichever slab rate it falls into. It doesn't. Tax is progressive, which means each slab only taxes the income that actually falls inside it — the first ₹4,00,000 is taxed at 0% for everyone under the new regime, the next ₹4,00,000 at 5%, and so on, no matter how high your total income climbs. Earning your way into a higher bracket never costs you money on the income you already had below it.
Gross income versus taxable income
Tax is calculated on taxable income, not on what you actually earn. The standard deduction — a flat amount everyone gets, ₹75,000 under the new regime or ₹50,000 under the old — comes off first. If you're on the old regime, whatever else you're eligible to claim comes off next: HRA exemption, Section 80C investments up to ₹1,50,000, home loan interest, and more. The new regime disallows all of that in exchange for lower rates and a simpler calculation — there's nothing to itemize, which is exactly why it suits people without large deductions to claim.
The rebate, and the relief that smooths it
Section 87A gives a full rebate — your tax drops to zero — as long as taxable income doesn't exceed a threshold: ₹12,00,000 under the new regime, ₹5,00,000 under the old. What most calculators get wrong is what happens just above that line. Without marginal relief, someone earning ₹12,10,000 would owe tax as if the rebate never existed — a jump of tens of thousands of rupees for ten thousand rupees of extra income. Marginal relief caps the tax at exactly the amount by which income exceeds the threshold, so the transition is smooth instead of a cliff. This calculator applies that correctly, not just the naive slab math.
Surcharge, for higher incomes
Above ₹50 lakh of taxable income, a surcharge adds a further 10-25% (up to 37% under the old regime, which has no such cap under the new regime's 25% ceiling) on top of your calculated tax. Like the 87A rebate, surcharge has its own marginal relief at every threshold it crosses — ₹50L, ₹1Cr, ₹2Cr, and for the old regime, ₹5Cr — so a taxpayer just over a threshold doesn't pay wildly more than one just under it. It's a narrower concern than the rebate, since it only affects high earners, but it's exactly the kind of detail that's easy to implement wrong.
None of this is exotic tax planning — it's just arithmetic most calculators skip because it's fiddly to get right. A slab table alone can't tell you what happens at a rebate boundary or a surcharge threshold; you need the actual formula, applied consistently, every time someone changes the number in the box. That's the entire reason this tool recalculates live instead of waiting for a button press — there's no version of "tax calculation" that benefits from making you wait.
What this number does and doesn't tell you
This is your total tax liability for the year on salary income — not what's already been withheld as TDS, and not a refund calculation. Compare it against the TDS your employer has already deducted (shown on your Form 16) to see whether you'll owe more at year-end or get money back. It also doesn't include capital gains, rental income, interest, or business income, each of which is taxed under its own rules. If salary is your only income source, this figure is your complete picture; if it isn't, treat it as the salary component of a larger calculation.
Frequently asked questions
Does my whole income get taxed at my highest slab rate?
No — this is the single most common misunderstanding about how income tax works. Tax is progressive: only the portion of your income inside each slab is taxed at that slab's rate. Earning one rupee into a higher slab doesn't retroactively tax everything below it at the higher rate.
What's the difference between gross income and taxable income?
Gross income is what you earn before anything is subtracted. Taxable income is what's left after deductions — the standard deduction always, and under the old regime, whatever else you're eligible to claim. Tax is calculated on taxable income, not gross.
Why did my tax come out lower than the slab table suggests?
Two mechanisms can reduce it below the naive slab calculation. Section 87A gives a full rebate — zero tax — up to a threshold (₹12L taxable under the new regime, ₹5L under the old). Just above that threshold, marginal relief kicks in so a small amount of extra income never triggers a large jump in tax. Both are modelled here correctly.
I earn well above ₹50 lakh — why does surcharge matter to me?
Surcharge adds 10-25% (up to 37% under the old regime) on top of your calculated tax once taxable income crosses ₹50L, ₹1Cr, or ₹2Cr. Like the rebate, it has its own marginal relief at each threshold, so crossing a boundary by a small amount doesn't cost a disproportionate amount of extra tax.
Should I pick the old regime or the new regime?
It depends entirely on how much you can deduct under the old regime — HRA, 80C investments, home loan interest, and more. If those add up to a meaningful share of your income, the old regime can still win despite its higher rates. Toggle the regime switch above and compare directly against your own numbers rather than a generic rule.
Does this include TDS my employer already deducted?
No — this calculates your total tax liability for the year, not what's already been withheld. If your employer deducts TDS monthly, compare this figure against your total TDS for the year (visible in your Form 16) to see whether you owe more or are due a refund.
Does this account for income from sources other than salary?
No. This models salary income only. Capital gains, rental income, interest, and business income each have their own tax treatment and aren't included in this figure — if you have significant income from those sources, treat this as a partial estimate.
This is an estimate for informational purposes, not tax advice. Verify with a chartered accountant or at incometaxindia.gov.in before making financial decisions.
Last verified: August 2026 · FY 2026-27 rates