+₹31,200 tax
The next ₹1 lakh is taxed at your top slab rate, 30%, plus 4% cess.
Income tax on ₹40 lakh salary
On a ₹40 lakh salary, income tax for Tax Year 2026-27 is ₹7,87,800 under the new regime: ₹65,650 a month, 19.7% of the income.
- Tax Year 2026-27 · verified 29 September 2026
- Checked against the official calculator
- By the Accurio.in team
Tax for Tax Year 2026-27 · new regime
₹7,87,800
₹65,650 a month · 19.7% of the income
- Salary
- ₹40,00,000
- Standard deduction
- −₹75,000
- Taxable income
- ₹39,25,000
- Tax on the slabs
- ₹7,57,500
- Cess (4%)
- +₹30,300
Tax for the year₹7,87,800
Old regime, standard deduction only: ₹10,37,400 (₹2,49,600 more).
₹2,49,600 more
under the old regime, standard deduction only (₹10,37,400). Only large deductions and exemptions (s.123 payments, health insurance, home-loan interest, HRA) make it cheaper.
19.7%
of the income goes in tax, though the top slab is 30%: the lower slabs are taxed at less.
See the working
Taxable income ₹39,25,000
| Slab · rate | Income | Tax |
|---|---|---|
| Up to ₹4 lakh · 0% | ₹4,00,000 | ₹0 |
| ₹4–8 lakh · 5% | ₹4,00,000 | ₹20,000 |
| ₹8–12 lakh · 10% | ₹4,00,000 | ₹40,000 |
| ₹12–16 lakh · 15% | ₹4,00,000 | ₹60,000 |
| ₹16–20 lakh · 20% | ₹4,00,000 | ₹80,000 |
| ₹20–24 lakh · 25% | ₹4,00,000 | ₹1,00,000 |
| Above ₹24 lakh · 30% | ₹15,25,000 | ₹4,57,500 |
| Total | ₹39,25,000 | ₹7,57,500 |
How this is calculated
The steps, as the law sets them
- Taxable income = salary − the standard deduction (₹75,000 in the new regime, ₹50,000 in the old; s.19) + other income, rounded to the nearest ₹10 (s.516).
- Tax on the slabs: each slab’s rate on the part of the income inside it. New regime: s.202(1). Old regime: the Finance Act 2026 slabs for the taxpayer’s age.
- Rebate (s.156): the new regime takes off the whole tax, up to ₹60,000, while taxable income is at most ₹12,00,000. Just above that, marginal relief keeps the tax no higher than the income above ₹12,00,000. The old regime’s rebate is up to ₹12,500 at taxable income up to ₹5,00,000, with no relief above.
- Surcharge on the tax: 10% above ₹50 lakh, 15% above ₹1 crore and 25% above ₹2 crore in the new regime; 10% above ₹50 lakh, 15% above ₹1 crore, 25% above ₹2 crore and 37% above ₹5 crore in the old. Marginal relief at each step (Finance Act 2026 s.3(5) for the new regime; First Schedule Part I-B Paragraph F for the old).
- Cess: 4% of the tax and surcharge (Finance Act 2026 s.3(15)).
- The total is rounded to the nearest ₹10 (s.516).
Assumptions
- A resident individual, for Tax Year 2026-27 (FY 2026-27): income earned from 1 April 2026 to 31 March 2027.
- Salary is the gross salary for the year, HRA included: the new regime allows no HRA exemption (s.202(2)(a)), and the old regime here takes none.
- Other income is added in full at the slab rates: enter its taxable amount.
- The old regime is shown with the standard deduction only: no other deductions or exemptions.
- Capital gains, other income taxed at special rates, and professional tax are not included.
Why can the official calculator show a different figure?
The Income Tax Department’s calculator has a Basic tab and an Advance tab. In our checks, the Basic tab (new regime) left out three rules of the Act: the rebate’s marginal relief just above ₹12 lakh, the surcharge’s marginal relief, and the rounding to ₹10. So just above those thresholds it shows more tax than the Act charges. The Advance tab matched our figures to the rupee, with three exceptions. Just above ₹2 crore of income it charged a 15% surcharge instead of 25% with marginal relief, in both regimes. Above ₹5 crore it charged the old regime 25% instead of 37%. And it does not round taxable income to ₹10: in the old regime, taxable income of ₹5,00,001 to ₹5,00,004 rounds down to ₹5,00,000 under the Act (s.516) and gets the full rebate, where the calculator shows tax. We follow the Act.
Which regime applies if I don’t choose?
The new regime (s.202) is the default. To be taxed under the old regime you opt out of it under s.202(4). The comparison under the calculator shows both.
Is a ₹12.75 lakh salary tax-free?
Yes, under the new regime, for a resident with no other income. The ₹75,000 standard deduction brings it to ₹12,00,000 of taxable income, and the s.156 rebate cancels the tax on up to ₹12,00,000. Above ₹12,00,000 of taxable income (after the rounding to ₹10) the full rebate ends, and its marginal relief keeps the tax, before cess, no higher than the income above ₹12,00,000.
What changed (latest: 1 April 2026)
The rules this page uses, by the date each took effect, newest first. Each was last checked against its official source on 29 September 2026.
-
17 changes
- New-regime slab rates on taxable income
- Old-regime slab rates: individuals below 60, and non-residents of any age
- Old-regime slab rates: resident individuals aged 60 to 79
- Old-regime slab rates: resident individuals aged 80 or more
- Standard deduction on salary
- Rebate, new regime
- Rebate, old regime
- Surcharge rates
- Health and education cess
- Rounding of total income and of tax payable/refund
- Deduction for life insurance premia, provident fund and the other Schedule XV payments (s.123, formerly 80C)
- Deduction for the individual's own NPS contribution (s.124(3), formerly 80CCD(1B))
- Deduction for health insurance premia (s.126, formerly 80D)
- Deduction for interest on bank, co-operative bank and post office deposits (s.153, formerly 80TTA and 80TTB)
- Interest on a home loan for a self-occupied house (s.22(1)(b)–(c), capped by s.22(2); formerly s.24(b))
- Employer NPS contribution deduction (s.124, formerly 80CCD(2))
- Income-tax Act 2025 in force; "Tax Year" replaces previous year / assessment year
Mistakes we have fixed on any page are listed on Corrections.
What to check next
Have deductions such as s.123, health insurance or HRA?
Old vs new regime
How much you need for the old regime to cost less.
Which regime costs less at your salary?
Old vs new at every salary
The break-even deductions for each salary, in one table.
Just the rates?
Income tax slabs for Tax Year 2026-27
Both regimes, by age, with surcharge and cess.
Income tax on nearby salaries
Tax Year 2026-27, a resident below 60 with no other income; the old regime with the standard deduction only.