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
📖 How to Use This Calculator
Steps
💡 Example Calculations
Example 1 - ₹12L income under New Regime
Example 2 - ₹8L income under Old Regime (80C = ₹1.5L)
❓ Frequently Asked Questions
🔗 Related Calculators
Which regime should I choose - New or Old?
Compare both regimes by computing tax under each and choosing the lower result. Generally: New Regime is better for income below ₹15 lakh 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 total deductions exceed approximately ₹3.75L, the Old Regime often wins.
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 (₹5 lakh under Old Regime). This means zero tax even if your slab calculation shows some liability - the rebate wipes it out. Note: income exceeding the threshold means you pay full slab-wise tax with no partial rebate.
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. It is a flat deduction from gross salary before computing taxable income, requiring no documentation.
What are the income tax slabs for FY 2025-26 under the New Regime?
New Regime slabs for FY 2025-26: ₹0–3L: 0%; ₹3–7L: 5%; ₹7–10L: 10%; ₹10–12L: 15%; ₹12–15L: 20%; above ₹15L: 30%. Income up to ₹7L is effectively tax-free due to the 87A rebate. A 4% Health & Education Cess applies on tax payable.
Can I switch between New and Old Regime every year?
Yes, salaried individuals and those without business income can switch between the New and Old Regime every year by informing their employer before the start of the financial year. Those with business income can only switch once from Old to New; reverting is allowed but switching back to Old again is not permitted.
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.
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.