The calculation is a sequence, not an effective rate
The calculator first checks whether it covers the scenario. It then derives total income separately for each regime, applies slabs, rebate or marginal relief, cess, credits and final rounding.
1. Derive total income
The new-regime path subtracts the lower of salary and ₹75,000 as the standard deduction. The old-regime path subtracts the lower of salary and ₹50,000, then subtracts the user-verified aggregate old-regime deductions and exemptions. Other ordinary-rate income is added to both.
2. Round and apply slabs
Total income is rounded to the nearest ₹10 under section 288A. The calculator applies AY 2026-27 new-regime slabs or the old-regime schedule for the selected age band.
3. Apply Section 87A
For a resident individual in the new regime, tax up to ₹60,000 is rebated when total income does not exceed ₹12 lakh. Immediately above ₹12 lakh, marginal relief limits tax before cess to the excess income when that is lower than slab tax. The old-regime rebate is limited to ₹12,500 when total income does not exceed ₹5 lakh.
4. Add cess and reconcile credits
Health and education cess is 4% of tax after rebate. The final tax, payable or refund estimate is rounded to the nearest ₹10. User-entered TDS, TCS, advance tax and self-assessment tax are then reconciled against the liability.
5. Stop when the calculator does not cover the facts
An unavailable result appears for an unsupported residence, entity, income head, year or surcharge scope. The calculator does not replace a missing rule with a flat rate.