TaxSaral
Tax Year 2026-27·Income Tax Act 2025·Section 202

Income Tax Regime Optimizer

Compare your tax liability under the default and optional regimes. Results update as you type.

For guidance only. Tax calculations are estimates based on published IT Act 2025 rates. Verify with a CA before filing your return.

Income

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Standard deduction auto-applied: ₹75,000 (default) / ₹50,000 (optional)

House Property

Income or loss from house property (Sections 20-25)

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Net income from all let-out properties (after standard deduction and interest)

Have rental income or home loan on let-out property? Calculate it here →

Optional Regime Deductions

These apply only under the optional (old) regime

Section 123
₹/ ₹1,50,000
Section 126
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Max ₹25,000

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₹25,000 / ₹50,000 senior

Section 124
₹/ ₹50,000
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Section 22 · Max ₹2,00,000

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Not sure? Calculate it below ↓

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Education loan interest (Section 129), interest on deposits (Section 153), etc.

Not sure about your HRA exemption? Calculate it here →

Enter your salary above

Comparison updates in real-time as you type

Understanding the two tax regimes

Under the Income Tax Act 2025, every individual files under one of two parallel tax systems. You compare, then choose.

Default regime
7 slabs (0%–30%), ₹75,000 standard deduction, full rebate up to ₹12L income (Sec. 156). Most deductions not available.
Optional regime
4 slabs (0%–30%), ₹50,000 standard deduction. 80C, HRA, home loan interest, health insurance, and more deductions allowed.
Choose annually
Salaried individuals can pick the better regime each year at filing time. Your employer may ask for a declaration at the start of the year — use this calculator to decide.

Default vs Optional — Side by Side

FeatureDefault RegimeOptional Regime
Slab count7 slabs (0% to 30%)4 slabs (0% to 30%)
Standard deduction₹75,000₹50,000
Section 156 rebateYes — zero tax up to ₹12L incomeNo
80C / Sec. 123 (₹1.5L)Not availableAvailable
HRA exemptionNot availableAvailable
Home loan interest (SO)Not availableUp to ₹2L (Sec. 22)
Health insurance (80D)Not availableUp to ₹75K (Sec. 126)
HP loss set-offNo set-off allowedUp to ₹2L

Common questions

Which regime is better for me?
It depends on your total eligible deductions. As a rough guide: if your deductions (Section 123/80C, HRA, home loan interest, health insurance) together exceed roughly ₹3–4 lakh, the optional regime is likely better. Below that, the default regime usually wins — especially with the Section 156 rebate eliminating tax entirely for incomes up to ₹12 lakh. Use this calculator to find your exact breakeven.
What deductions are available only under the optional regime?
The optional regime allows: Section 123 (80C) — ₹1.5 lakh; Section 124 (80CCD(1B) NPS extra) — ₹50,000; Section 126 (80D health insurance) — up to ₹75,000 in all where parents are senior citizens; HRA exemption (Schedule III); home loan interest up to ₹2 lakh for self-occupied property (Section 22); Section 129 (80E education loan interest); savings/deposit interest deductions (Section 153, formerly 80TTA/80TTB). The default regime offers only the ₹75,000 standard deduction.
Can I switch regime every year?
Yes, if you are a salaried individual (no business income), you can choose a different regime every year when filing your return. However, if you have business or professional income, once you opt out of the default regime, switching back requires meeting specific conditions and is subject to a one-time window.
What is the Section 156 rebate?
Section 156 (formerly Section 87A) gives a full rebate on income tax if your total income does not exceed ₹12 lakh under the default regime. This means your tax liability becomes zero — even though slabs technically apply above ₹4 lakh. The rebate is only available under the default regime and does not apply to special-rate incomes like capital gains.
What is marginal relief and when does it apply?
Marginal relief prevents a situation where paying ₹1 more income results in more than ₹1 of extra tax. It typically applies near the ₹12 lakh boundary of the Section 156 rebate and near surcharge thresholds (₹50 lakh, ₹1 crore, etc.). This calculator handles marginal relief automatically.
Legal reference: Section 202 (tax rate slabs) · Section 156 (rebate) · Section 123/Schedule III (deductions) — Income Tax Act 2025, applicable from Tax Year 2026-27.