Income Tax Calculator
Calculate income tax for FY 2025-26. Compare New Regime vs Old Regime.
📋 Income Tax in India - Overview
India operates a progressive income tax system where higher income is taxed at higher rates. As of FY 2025-26, taxpayers can choose between two regimes: the New Tax Regime (default from FY 2023-24) with lower slab rates but fewer deductions, and the Old Tax Regime with higher slab rates but access to various exemptions and deductions like 80C, HRA, and home loan interest.
The New Regime is beneficial for those with few deductions and lower-to-middle incomes. The Old Regime benefits those with large deductions - salaried employees maximising 80C investments, claiming HRA, and paying home loan interest often save more tax under the old system.
This calculator computes tax under both regimes using the official FY 2025-26 slab rates including the 4% health and education cess and the rebate under Section 87A (which makes income up to ₹7L tax-free under the New Regime).
📐 Tax Slab Rates - FY 2025-26
New Regime (Default)
Up to ₹3L → 0% | ₹3L–₹7L → 5% | ₹7L–₹10L → 10%
₹10L–₹12L → 15% | ₹12L–₹15L → 20% | Above ₹15L → 30%
Standard Deduction: ₹75,000 (from Budget 2024)
Rebate 87A: Full tax rebate if income ≤ ₹7L (after std deduction)
Old Regime
Up to ₹2.5L → 0% | ₹2.5L–₹5L → 5% | ₹5L–₹10L → 20% | Above ₹10L → 30%
Standard Deduction: ₹50,000
Rebate 87A: Full rebate if income ≤ ₹5L
Cess: 4% Health & Education Cess on total tax (both regimes)
📖 How to Use This Calculator
Steps
1
Select your regime - New Regime (default) or Old Regime.
2
Enter your gross annual income - this is your CTC or total income before any deductions.
3
For Old Regime: enter your deductions under 80C (up to ₹1.5L) and other deductions (HRA, 80D, etc.).
4
Click Calculate Tax to see total tax, effective rate, monthly in-hand, and a slab breakdown.
💡 Example Calculations
Example 1 - ₹12L income under New Regime
1
Gross = ₹12,00,000 − Std deduction ₹75,000 = Taxable ₹11,25,000
2
Tax: 0 + ₹20,000 (5% on 3L–7L) + ₹25,000 (10% on 7L–10L) + ₹18,750 (15% on 10L–11.25L) = ₹63,750
Tax + 4% Cess = ₹63,750 × 1.04 = ₹66,300 | In-hand = ₹(12,00,000 − 66,300) / 12 = ₹94,475/month
Try this example →Example 2 - ₹8L income under Old Regime (80C = ₹1.5L)
1
Taxable = ₹8,00,000 − Std ₹50,000 − 80C ₹1,50,000 = ₹6,00,000
2
Tax = 0 + ₹12,500 (5% on 2.5–5L) + ₹20,000 (20% on 5–6L) = ₹32,500
Tax + Cess = ₹32,500 × 1.04 = ₹33,800
Try this example →❓ Frequently Asked Questions
Which regime should I choose - New or Old?
Use this calculator with both regimes and pick whichever gives lower tax. Generally: New Regime is better for income below ₹15L with few deductions. Old Regime may be better if you have high 80C investments (₹1.5L), HRA exemption, home loan interest deduction (up to ₹2L under Sec 24), and other significant deductions. If your total deductions exceed approximately ₹3.75L, the Old Regime often wins.
Which tax regime is better - old or new?
The new regime (FY 2025-26) has lower slabs and Rs 75,000 standard deduction. The old regime allows deductions under 80C, 80D, HRA, home loan interest, etc. Generally: if your total deductions exceed Rs 3.75 lakh, the old regime saves more. Below that, the new regime is better. Use this calculator to compare both regimes simultaneously.
What is the rebate under Section 87A?
Under the new tax regime for FY 2025-26, individuals with total income up to Rs 12 lakh get full tax rebate under Section 87A (zero tax payable). Under the old regime, the rebate limit is Rs 5 lakh. Note: rebate does not apply to special rate income like LTCG on equities taxed at 12.5%.
What is the surcharge and when does it apply?
Surcharge applies to high earners on top of the base tax. Under the new regime: 10% surcharge on income Rs 50 lakh-1 crore, 15% on Rs 1-2 crore, 25% on Rs 2-5 crore. Health and Education Cess of 4% applies to (tax + surcharge) in both regimes.
What is the Section 87A rebate?
Section 87A provides a full rebate on income tax for individuals whose taxable income does not exceed ₹7 lakh under the New Regime (or ₹5 lakh under the Old Regime). This means zero tax is payable even if your slab-wise calculation shows some tax - the rebate wipes it out. Note: this rebate applies to tax calculated before cess, and income exceeding the threshold means you pay tax on the full amount.
Does surcharge apply?
Surcharge applies on very high incomes: 10% surcharge for income between ₹50L–₹1Cr, 15% for ₹1Cr–₹2Cr, 25% for ₹2Cr–₹5Cr, and 25% for above ₹5Cr (capped at 25% under the New Regime per Budget 2023). This calculator includes an estimate for surcharge for very high incomes. For precise calculations at these income levels, consult a CA or use the official IT portal.
What is the standard deduction for FY 2025-26?
Standard deduction for salaried employees is ₹75,000 under the New Regime (increased from ₹50,000 in Budget 2024) and ₹50,000 under the Old Regime. This is a flat deduction from gross salary before computing taxable income. It was introduced to provide relief for work-related expenses without requiring specific proof or documentation.
What is income tax on ₹12 lakh salary under the New Regime?
For FY 2025-26 under the New Regime: Gross salary ₹12,00,000 minus standard deduction ₹75,000 = taxable income ₹11,25,000. Tax slabs: 0% up to ₹3L = ₹0; 5% on ₹3L–₹7L = ₹20,000; 10% on ₹7L–₹10L = ₹30,000; 15% on ₹10L–₹11.25L = ₹18,750. Total tax = ₹68,750 + 4% cess = ₹71,500. Note: The ₹7L rebate under Section 87A does not apply since taxable income exceeds ₹7L.
Can I switch between New and Old Regime every year?
Salaried individuals can switch between New and Old Regime every financial year by informing their employer at the start of the year. Self-employed individuals and those with business income can switch only once - once they opt out of the New Regime, they cannot re-enter except in one specific case. For salaried employees, the flexibility to switch annually makes it worth computing tax under both regimes each year using a calculator like this one.
What is the difference between tax deduction and tax rebate in India?
A tax deduction reduces your taxable income (e.g., Section 80C reduces income by up to Rs 1.5 lakh, saving tax at your marginal rate). A tax rebate directly reduces tax payable. Section 87A provides a rebate of up to Rs 25,000 if taxable income is below Rs 7 lakh under the New Regime, effectively making income up to Rs 7 lakh tax-free. Deductions save more for higher brackets; rebates provide a flat reduction.
How do I calculate advance tax as a freelancer or self-employed professional?
If total tax liability exceeds Rs 10,000 per year, you must pay advance tax in four instalments: 15% by June 15, 45% by September 15, 75% by December 15, and 100% by March 15. Estimate annual income, apply slab rates, subtract TDS already deducted, and pay the balance in instalments. Failure to pay attracts interest under Sections 234B and 234C.