How Income Tax Calculator Works
This calculator computes your income tax liability for FY 2025-26 (Assessment Year 2026-27) under both the Old Tax Regime and New Tax Regime, then shows you which one saves you more tax. The calculator is updated with Budget 2025 changes including the revised new regime slabs and standard deduction of ₹75,000.
New Tax Regime Slabs (FY 2025-26)
| Income Slab | Tax Rate |
|---|
| Up to ₹3,00,000 | 0% (Nil) |
| ₹3,00,001 - ₹7,00,000 | 5% |
| ₹7,00,001 - ₹10,00,000 | 10% |
| ₹10,00,001 - ₹12,00,000 | 15% |
| ₹12,00,001 - ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
New regime offers Section 87A rebate up to ₹25,000 for income up to ₹7 lakh, making tax zero. Standard deduction of ₹75,000 available for salaried individuals.
Old Tax Regime Slabs (FY 2025-26)
| Income Slab | Tax Rate (Below 60) | Senior (60-80) |
|---|
| Up to ₹2,50,000 | 0% | 0% (up to ₹3L) |
| ₹2,50,001 - ₹5,00,000 | 5% | 5% (₹3L-₹5L) |
| ₹5,00,001 - ₹10,00,000 | 20% | 20% |
| Above ₹10,00,000 | 30% | 30% |
Old regime allows full deductions: Section 80C (₹1.5L), 80D (medical), HRA, Home loan interest (₹2L), 80CCD(1B) NPS (₹50K), and many more. Standard deduction ₹50,000 for salaried.
Tax Calculation Formula:
Tax = Σ (Taxable Income in Slab × Slab Rate)
Total Tax = Tax + 4% Health & Education Cess
Surcharge: 10% (₹50L-1Cr) | 15% (₹1Cr-2Cr) | 25% (₹2Cr-5Cr) | 37% (above ₹5Cr)
Section 87A Tax Rebate
If your taxable income (after all deductions) is below the threshold, you get full tax rebate (zero tax):
- Old Regime: Income up to ₹5,00,000 - Rebate up to ₹12,500
- New Regime: Income up to ₹7,00,000 - Rebate up to ₹25,000
Old Regime vs New Regime - Which to Choose?
Generally, New regime is better if you don't claim many deductions. Old regime is better if your total deductions exceed ₹3.5-4 lakhs (combination of 80C, 80D, HRA, home loan, etc.).
Example 1: Salary ₹15L with no deductions → New regime saves more
Example 2: Salary ₹15L with ₹4L deductions (80C ₹1.5L + Home loan ₹2L + 80D ₹50K) → Old regime saves more
Common Deductions in Old Regime
- Section 80C (₹1,50,000): EPF, PPF, ELSS, NSC, Home loan principal, Tuition fees, Life insurance premium, Sukanya Samriddhi
- Section 80CCD(1B) (₹50,000): Additional NPS contribution over and above 80C
- Section 80D: Health insurance - ₹25,000 self+family + ₹50,000 senior parents = ₹75,000 max
- Section 80E: Education loan interest - no upper limit, for 8 years
- Section 80G: Donations to charities - 50% or 100% of donation
- Section 24(b): Home loan interest - up to ₹2,00,000 for self-occupied
- HRA Exemption u/s 10(13A): Minimum of 3 conditions
- LTA: Leave Travel Allowance - 2 trips in 4-year block
- Standard Deduction: ₹50,000 for salaried
Frequently Asked Questions
Q: Should I choose old or new tax regime?
Use this calculator - it shows tax under both and recommends the regime that saves you more. Generally, if your total deductions (80C + HRA + home loan + etc.) exceed ₹3.5-4 lakhs, old regime is better. Otherwise new regime wins.
Q: Can I switch between regimes every year?
Salaried individuals can switch between old and new regime every year. Business income earners can switch only once - after switching to old, you cannot switch back to new again.
Q: What is Section 87A rebate?
If your taxable income is below ₹5L (old regime) or ₹7L (new regime), you get rebate making your tax zero. This is automatic - no need to claim separately.
Q: Is HRA available in new regime?
No, HRA exemption under Section 10(13A) is NOT available in new regime. Only old regime allows HRA exemption.
Q: When is income tax due?
For FY 2025-26, ITR due date is July 31, 2026 for individuals (no audit). Advance tax due dates: June 15 (15%), Sept 15 (45%), Dec 15 (75%), March 15 (100%).