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Income Tax Calculator

Calculate income tax for FY 2025-26

Disclaimer: This calculator is for informational purposes only. Actual tax may vary based on exemptions and other factors. Please consult a tax professional for accurate calculations.

Understanding Income Tax in India

Income tax in India is a direct tax levied by the central government on the income earned by individuals, businesses, and other entities. It is governed by the Income Tax Act, 1961 and administered by the Income Tax Department under the Ministry of Finance.

India operates a progressive tax system — meaning higher income earners pay a higher percentage of their income as tax. Income is divided into tax slabs, and you only pay the higher rate on the portion of income that falls within that slab, not on your entire income.

This calculator uses the current New Tax Regime slabs, which became the default from FY 2023-24. It includes the standard deduction of ₹75,000 and the basic exemption for different taxpayer categories.

New Tax Regime vs Old Tax Regime

🆕 New Tax Regime (Default)

  • ✓ Lower tax rates
  • ✓ Simpler — fewer forms to file
  • ✓ Standard deduction of ₹75,000
  • ✗ No HRA exemption
  • ✗ No 80C deductions
  • ✗ No home loan interest deduction

Best for: Salaried employees without large deductions or investments in tax-saving instruments.

🏛️ Old Tax Regime (Optional)

  • ✗ Higher tax rates
  • ✗ More complex filing
  • ✓ Section 80C deductions (₹1.5 lakh)
  • ✓ HRA exemption available
  • ✓ Home loan interest deduction
  • ✓ 70+ exemptions and deductions available

Best for: People with significant tax-saving investments, home loans, or HRA claims.

Which regime is better? It depends on your deductions. If your total deductions exceed ₹3.75 lakhs, the old regime is often more beneficial. Calculate both and choose the one that results in lower tax.

New Tax Regime Slabs (FY 2025-26)

Income Range Tax Rate Tax on This Slab
Up to ₹3,00,0000%Nil
₹3,00,001 to ₹6,00,0005%Up to ₹15,000
₹6,00,001 to ₹9,00,00010%Up to ₹30,000
₹9,00,001 to ₹12,00,00015%Up to ₹45,000
₹12,00,001 to ₹15,00,00020%Up to ₹60,000
Above ₹15,00,00030%30% of balance

Plus 4% Health and Education Cess is added to the total tax amount. A rebate under Section 87A means individuals with income up to ₹7 lakhs (new regime) pay zero tax after the rebate.

Legal Ways to Reduce Your Tax

Tax planning is legal and smart. Here are the main instruments available under the Old Tax Regime:

  • •
    Section 80C (up to ₹1,50,000) — ELSS mutual funds, PPF contributions, LIC premiums, EPF contributions, home loan principal repayment, fixed deposits (5 year), and NSC all count toward this limit.
  • •
    Section 80D (up to ₹25,000) — Health insurance premiums for yourself and your family. Increases to ₹50,000 if you are a senior citizen or paying for a senior citizen parent.
  • •
    Section 24(b) (up to ₹2,00,000) — Interest paid on a home loan for a self-occupied property is deductible from taxable income.
  • •
    House Rent Allowance (HRA) — If you live in a rented property, a portion of your HRA (calculated based on salary and rent paid) is exempt from tax.
  • •
    Section 80CCD(1B) (up to ₹50,000) — Additional contribution to NPS (National Pension Scheme) above and beyond the 80C limit.
  • •
    Standard Deduction — ₹75,000 flat deduction available for all salaried employees, applicable in both old and new regimes.

Frequently Asked Questions

What is the income tax slab for FY 2025-26?+

Under the New Tax Regime (which is now the default), income up to ₹3 lakhs is tax-free. Income from ₹3 to 6 lakhs is taxed at 5%. From ₹6 to 9 lakhs, 10%. From ₹9 to 12 lakhs, 15%. From ₹12 to 15 lakhs, 20%. Income above ₹15 lakhs is taxed at 30%. Additionally, a 4% Health and Education Cess is added to the total tax. Individuals with income up to ₹7 lakhs get full tax relief through Section 87A rebate.

Is income tax calculated on gross or net salary?+

Income tax is calculated on your total taxable income, not your gross CTC. Your taxable income is your gross salary minus exemptions and deductions. Under the New Tax Regime, you get a standard deduction of ₹75,000. Under the Old Tax Regime, you can claim a much wider range of deductions including HRA, 80C, 80D, and others. After all applicable deductions, what remains is your taxable income — and tax is calculated on that amount using the relevant slab rates.

What is the difference between TDS and income tax?+

TDS (Tax Deducted at Source) is a mechanism for collecting income tax in advance. Your employer deducts TDS from your salary each month and deposits it directly with the government on your behalf. Income tax is the total annual tax liability calculated when you file your return. If your employer deducted the correct TDS, you have no additional tax to pay. If too little TDS was deducted, you pay the balance when filing your return. If too much was deducted, you receive a refund from the IT department.

What is Section 87A tax rebate?+

Section 87A provides a tax rebate to individuals whose total taxable income does not exceed a certain threshold. Under the New Tax Regime, if your income is up to ₹7 lakhs after the standard deduction, your entire income tax liability is cancelled through this rebate — effectively making it zero. Under the Old Tax Regime, the rebate applies to income up to ₹5 lakhs. This rebate has been a significant relief for middle-income taxpayers and means millions of Indians in this income range pay no income tax at all.

Do I need to file a tax return if my income is below the taxable limit?+

Even if your income is below the basic exemption limit, you may still need to file a return in certain situations — if you have deposited more than ₹1 crore in a bank account, spent more than ₹2 lakhs on foreign travel, or paid more than ₹1 lakh in electricity bills. Filing voluntarily is also beneficial if you want to carry forward losses, apply for visa applications that require ITR proof, or establish an income history for loan applications. There is no penalty for filing a return when not required.

What is advance tax and who needs to pay it?+

Advance tax is income tax paid in instalments during the year rather than as a lump sum at the end. If your estimated tax liability for the year exceeds ₹10,000, you are required to pay advance tax in four instalments: 15% by June 15, 45% by September 15, 75% by December 15, and 100% by March 15. This requirement applies to salaried employees with significant income from other sources like rent, interest, or capital gains, as well as self-employed individuals and freelancers whose TDS may not cover their full tax liability.

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