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Income Tax Calculator 2025-26

Compare old vs new tax regime and calculate your income tax liability for FY 2025-26. Get detailed breakdown of deductions, exemptions, and choose the best tax regime for maximum savings.

Old vs New RegimeSection 80C DeductionsHRA ExemptionTax Planning
₹

Twelve Lakhs rupees

₹1L₹1Cr
₹

Two Lakhs Forty Thousand rupees

₹

One Lakh Eighty Thousand rupees

₹

One Lakh Fifty Thousand rupees

₹0₹1.5L (Max)

PPF, EPF, ELSS, Life Insurance, etc. (Max: ₹1,50,000)

₹

Twenty Five Thousand rupees

₹0₹75K

Health insurance premium (Max: ₹25K self + ₹25K parents + ₹25K senior parents)

₹

Zero rupees

₹0₹50K (Max)

Additional NPS contribution (Max: ₹50,000)

₹

Zero rupees

₹0₹2L

Interest on education loan (No upper limit)

₹

Zero rupees

₹0₹2L (Max)

Interest on home loan (Max: ₹2,00,000)

₹

Zero rupees

Section 80G, 80TTA, LTA, etc.

Recommended Tax Regime

Old Tax Regime

Tax Liability: ₹84.34 K

You save ₹1,456 (1.7%) with old regime

Old Tax Regime

Recommended
Tax Liability₹84.34 K
Net Salary₹11.16 L
Effective Rate7.03%

New Tax Regime

Tax Liability₹85.80 K
Net Salary₹11.14 L
Effective Rate7.15%

Tax Deduction Summary (Old Regime)

Section 80C
₹1.50 L
Section 80D
₹25.00 K
NPS (80CCD)
₹0
HRA Exemption
₹1.32 L

Old Tax Regime Breakdown

Deduction Breakdown

Gross Salary₹12.00 L
Standard Deduction-₹50.00 K
HRA Exemption-₹1.32 L
Section 80C-₹1.50 L
Section 80D-₹25.00 K
Other Deductions-₹0
Taxable Income₹8.43 L

Tax Calculation

₹0.0 L - ₹2.5 L @ 0%₹0
₹2.5 L - ₹5.0 L @ 5%₹12.50 K
₹5.0 L - ₹10.0 L @ 20%₹68.60 K
Income Tax₹81.10 K
Health & Education Cess (4%)₹3.24 K
Total Tax Liability₹84.34 K

New Tax Regime Breakdown

Deduction Breakdown

Gross Salary₹12.00 L
Standard Deduction-₹50.00 K
Taxable Income₹11.50 L

New regime offers lower tax rates but doesn't allow most deductions and exemptions.

Tax Calculation

₹0.0 L - ₹3.0 L @ 0%₹0
₹3.0 L - ₹6.0 L @ 5%₹15.00 K
₹6.0 L - ₹9.0 L @ 10%₹30.00 K
₹9.0 L - ₹12.0 L @ 15%₹37.50 K
Income Tax₹82.50 K
Health & Education Cess (4%)₹3.30 K
Total Tax Liability₹85.80 K
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Income Tax Slabs FY 2025-26

Old Tax Regime

₹0 - ₹2.5 lakh0%
₹2.5 - ₹5 lakh5%
₹5 - ₹10 lakh20%
Above ₹10 lakh30%

New Tax Regime

₹0 - ₹3 lakh0%
₹3 - ₹6 lakh5%
₹6 - ₹9 lakh10%
₹9 - ₹12 lakh15%
₹12 - ₹15 lakh20%
Above ₹15 lakh30%

When Should You File Your Income Tax Return (ITR)?

1. Before the Due Date

Filing your ITR before the statutory deadline (generally 31st July for salaried individuals) helps you avoid late-filing fees under Section 234F and ensures faster refund processing.

2. When Your Income Exceeds the Basic Exemption Limit

If your total income crosses the basic exemption threshold (₹2.5 Lakh for individuals, ₹3 Lakh for senior citizens, and ₹5 Lakh for super-senior citizens) you are legally obliged to file your return—even if no tax is payable.

3. To Claim Tax Refunds & Carry-Forward Losses

You can only receive a TDS / TCS refund or carry forward capital and business losses if you file your ITR on time. Missing the deadline could wipe out valuable losses that might reduce future tax bills.

4. If You Own Foreign Assets or Earn Foreign Income

Residents holding foreign bank accounts, shares, or other overseas assets must mandatorily file an ITR — even when income is below the exemption limit — to stay compliant with Schedule FA disclosure norms.

Benefits of Old vs New Tax Regime

Old Regime Benefits

  • Section 80C deductions up to ₹1.5L
  • HRA exemption available
  • NPS additional ₹50K deduction
  • Education & home loan interest benefits
  • Multiple tax-saving investment options

New Regime Benefits

  • Lower tax rates across all slabs
  • Higher basic exemption (₹3L vs ₹2.5L)
  • No need for investment proofs
  • Simplified tax filing process
  • Best for those with minimal deductions

Tax Planning for Different Income Groups

₹0 - ₹10 Lakh

Conservative Planning

  • • Consider new tax regime for lower rates
  • • Invest in ELSS for 80C benefits
  • • Use PPF for long-term savings
  • • Health insurance for 80D benefits
  • • HRA exemption if applicable

₹10 - ₹25 Lakh

Balanced Approach

  • • Compare both tax regimes carefully
  • • Maximize Section 80C deductions
  • • Consider NPS for additional 50K deduction
  • • Home loan for interest benefits
  • • Capital gains tax planning

₹25 Lakh+

Advanced Planning

  • • Old regime usually better with deductions
  • • Structure salary for tax efficiency
  • • Investment diversification for tax planning
  • • Estate planning considerations
  • • Professional tax advisory recommended

Income Tax Calculation Formulas

Understand the mathematical formulas used to calculate income tax under the new and old tax regimes.

Taxable Income = Gross Income - Deductions - Exemptions

Example:

Gross income ₹8L, Deductions ₹1.5L, Exemptions ₹50K

8,00,000 - 1,50,000 - 50,000
= ₹6,00,000

Variables:

Gross Income - Total income from all sources
Deductions - Section 80C, 80D, etc. deductions
Exemptions - HRA, LTA, etc. exemptions

Tax = (Income - Slab Start) × Tax Rate + Previous Slab Tax

Example:

₹6L taxable income in 5% slab (₹3L-₹6L)

(6,00,000 - 3,00,000) × 0.05 + 0
= ₹15,000

Variables:

Income - Taxable income amount
Slab Start - Starting amount of tax slab
Tax Rate - Tax rate for the applicable slab

These formulas provide the mathematical foundation for the calculations. Actual results may vary based on rounding, compounding frequency, and specific lender policies.

Income Tax Calculator FAQs

Everything you need to know about income tax calculation, deductions, and tax planning

What's the difference between old and new tax regime?

The old tax regime allows various deductions like Section 80C, 80D, HRA exemption but has higher tax rates. The new tax regime offers lower tax rates but doesn't allow most deductions except standard deduction. Choose based on your deductions and income level.

What is the standard deduction for FY 2025-26?

The standard deduction for FY 2025-26 is ₹50,000 for salaried employees. This deduction is available in both old and new tax regimes and is automatically applied to reduce your taxable income.

How is HRA exemption calculated?

HRA exemption is the minimum of: (1) Actual HRA received, (2) 50% of basic salary for metro cities (40% for non-metro), (3) Actual rent paid minus 10% of basic salary. This exemption is only available in the old tax regime.

What investments qualify for Section 80C deduction?

Section 80C allows deduction up to ₹1.5 lakh for investments in PPF, EPF, ELSS mutual funds, life insurance premiums, NSC, tax-saving FDs, home loan principal repayment, and children's tuition fees.

Can I switch between tax regimes every year?

Yes, if you are a salaried employee, you can choose between old and new tax regime every financial year. However, if you have business income, once you opt for new regime, you cannot switch back to old regime.

What is Health and Education Cess?

Health and Education Cess is levied at 4% on the total income tax amount. This cess is applicable in both tax regimes and is used to fund health and education initiatives by the government.

Are there different tax slabs for senior citizens?

Yes, senior citizens (60-80 years) get basic exemption of ₹3 lakh instead of ₹2.5 lakh in old regime. Super senior citizens (80+ years) get basic exemption of ₹5 lakh in old regime. New regime tax slabs remain same for all age groups.

How to choose between old and new tax regime?

Choose old regime if your total deductions (80C, 80D, HRA, etc.) exceed ₹75,000-₹1,00,000. Choose new regime if you have minimal deductions and want to benefit from lower tax rates. Use our calculator to compare both scenarios.
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