Is the new tax regime better for salaried employees in India in 2026–27?

Often yes if you have few 80C/80D/HRA claims. New regime uses a ₹75,000 standard deduction and an 87A rebate that can zero tax up to about ₹12.75 lakh gross in a simple salary-only case. Old regime can win if large deductions actually apply. Always compare both with your CTC.

What are the new regime slabs for FY 2026–27?

Illustrative new-regime slabs: nil up to ₹4 lakh, then 5%, 10%, 15%, 20%, 25%, and 30% above ₹24 lakh, plus 4% cess. Confirm against the Income Tax Department before filing.

Guide · FY 2026–27 · Salaried

New vs old tax regime in India: which keeps more in-hand?

A hike letter quotes CTC. What you spend is in-hand after tax. For FY 2026–27 the default path for many salaried people is the new regime (Income-tax Act, 2025 in force from April 2026). The old regime still exists if you have deductions worth claiming. This page explains the fork, then you can compare both with your number — in the browser, not on our servers.

Compare regimes on your CTC Is a 12% hike good?

New regime in one paragraph

Taxable income ≈ gross salary minus ₹75,000 standard deduction. Slabs step from nil (first ₹4 lakh taxable) up to 30% above ₹24 lakh. If taxable income is within the 87A window (commonly described as ₹12 lakh taxable / about ₹12.75 lakh gross for a simple salaried case), slab tax can be rebated to nil before cess. Health and education cess is 4% on tax. HRA, 80C, and most classic deductions do not sit on this path.

Old regime in one paragraph

Standard deduction is ₹50,000. You may subtract 80C, 80D, and similar amounts you actually invest or pay. Slabs are steeper at the middle (5% / 20% / 30% bands). A smaller 87A rebate can apply at lower income. This path wins when those deductions are real and large — not when they are theoretical.

How to decide in five minutes

Open the toolkit In-hand tab.
Enter annual CTC.
Leave method on “compare new vs old”.
If you use 80C/80D, type that rupee total in old-regime deductions. Leave 0 if unsure.
Read which card is highlighted. Treat it as order-of-magnitude, then confirm with a CA or the department calculator before you file.

HRA, NPS extra, surcharge at very high income, and special-rate income are simplified or omitted. Night-shift allowance may be taxed as salary — your payroll decides the component, not this page.

A worked fork (illustrative, salary-only)

Take ₹12,00,000 CTC, no 80C. On the new-regime path the toolkit applies a ₹75,000 standard deduction, then slabs and 87A as coded for a simple case — often the remaining tax before cess is nil in that window, so in-hand is close to CTC minus cess if any. Switch on ₹1,50,000 of real 80C + 80D on the old path and the old-regime card can close the gap or win. The point of the two cards is that fork, not a notice of demand.

If you do not actually invest 80C, do not type a fictional 1.5 lakh. The old-regime “win” would be fake.

What the calculator will not do

HRA with metro/non-metro rent.
Employer NPS vs 80CCD(1B).
Capital gains or freelance receipts mixed with salary.
State professional tax in every jurisdiction.

File with the Income Tax Department tools or a CA. This page exists so a hike letter’s CTC is not mistaken for next month’s bank credit.