Income Tax Calculator FY 2025-26 (AY 2026-27)

How to Use the Income Tax Calculator

1. Select Age Category: Tax slabs differ for senior citizens (60-80) and super senior citizens (80+) under the Old Regime. The New Regime has uniform slabs regardless of age.
2. Enter Gross Salary: Include basic + HRA + special allowances + bonuses + perks. Standard Deduction (₹50,000 old / ₹75,000 new) is auto-applied.
3. Add Other Income: Interest from FDs and savings, rental income (less 30% standard deduction), short-term capital gains, business income, etc.
4. Enter Deductions (Old Regime): Section 80C (PPF, ELSS, LIC up to ₹1.5L), 80D (health insurance up to ₹25K-1L), 80CCD(1B) (NPS extra ₹50K), HRA exemption, home loan interest (up to ₹2L), and others (80E, 80G, 80TTA).
5. Review Comparison: The calculator shows tax under both regimes side-by-side, with the more tax-efficient regime highlighted and your savings amount.
6. Visual Breakdown: Charts show regime-wise comparison and the composition (basic tax, cess, surcharge) of your final tax under the recommended regime.

What is Income Tax?

Income tax is a direct tax levied by the Government of India on the income earned by individuals, HUFs, firms, and companies during a financial year (April 1 to March 31). It is governed by the Income-tax Act, 1961, and administered by the Central Board of Direct Taxes (CBDT). The tax is calculated by applying graduated slab rates to your taxable income — the more you earn, the higher the rate on incremental income. For individuals, India offers two parallel tax regimes:

• Old Regime: Lower base slabs but allows ~70+ deductions (80C, 80D, HRA, LTA, home loan, etc.). Better for those with substantial investments and home loans.
• New Regime (Default since FY 2023-24): Higher base slabs but allows only a few deductions (standard deduction, employer NPS). Better for those with simple income profiles and minimal investments.

You can choose either regime each year if salaried (business owners can choose once and switch only once back). The calculator compares both so you can pick the lower-tax option.

Income Tax Slab Rates — FY 2025-26 (AY 2026-27)

New Tax Regime (Default)

Section 87A Rebate (New Regime): Income up to ₹12,00,000 attracts NIL tax after rebate. Salaried individuals get an additional ₹75,000 standard deduction, making effective tax-free income up to ₹12,75,000.

Old Tax Regime — Below 60 Years

Old Tax Regime — Senior Citizens (60-80 years)

Old Tax Regime — Super Senior Citizens (80+ years)

Plus: Health & Education Cess of 4% on the tax amount (applies to both regimes and all ages). Surcharge applies on incomes above ₹50 lakh — see surcharge table below.

New Regime vs Old Regime — Which Should You Choose?

Section 87A Rebate — The Game Changer

Section 87A provides a tax rebate to resident individuals, effectively making certain income levels tax-free. The rebate amount and threshold differ between regimes:

• New Regime (FY 2025-26): Rebate of up to ₹60,000, applicable when total income is ≤ ₹12 lakh. Combined with ₹75,000 standard deduction, salaried individuals earning up to ₹12.75 lakh pay ZERO tax.
• Old Regime: Rebate of up to ₹12,500, applicable when total income is ≤ ₹5 lakh. Standard deduction of ₹50,000 brings effective tax-free salary to ₹5.5 lakh.

Marginal Relief: If your income marginally exceeds the rebate threshold (e.g., ₹12.1 lakh in new regime), marginal relief ensures your tax doesn’t suddenly jump by more than the excess income. This is automatically applied.

Old Regime Deductions — Complete Guide

Section 80C — ₹1,50,000 Limit

The most-used deduction, covering investments and expenses including:

• EPF (Employee’s contribution)
• PPF deposits
• ELSS (Equity-Linked Saving Schemes) — 3-year lock-in
• Life Insurance Premium (self, spouse, children)
• 5-year Tax-Saving Fixed Deposits
• NSC (National Savings Certificate)
• Sukanya Samriddhi Yojana
• Home Loan Principal Repayment
• Children’s Tuition Fees
• Stamp Duty & Registration Charges (one-time, year of purchase)

Section 80D — Health Insurance

• Self + Family (below 60): Up to ₹25,000
• Self + Family (above 60): Up to ₹50,000
• Parents (below 60): Additional ₹25,000
• Parents (above 60): Additional ₹50,000
• Maximum (senior self + senior parents): ₹1,00,000
• Preventive Health Check-up: ₹5,000 included within the above limits

Section 80CCD(1B) — Additional NPS

Up to ₹50,000 extra deduction for NPS contribution, OVER AND ABOVE the ₹1.5L 80C limit. Effectively raises maximum 80C+80CCD(1B) deduction to ₹2,00,000.

Section 24(b) — Home Loan Interest

Up to ₹2,00,000 deduction for interest paid on home loan for self-occupied property. For let-out properties, the full interest is deductible (no cap), but the overall loss from house property is capped at ₹2L for set-off against other income (carry-forward up to 8 years for excess).

Section 80E — Education Loan Interest

Full interest paid on education loan for higher education (self, spouse, children) is deductible for up to 8 years from the year repayment starts. No upper limit.

Section 80G — Donations

50% or 100% deduction depending on the recipient institution. Notified relief funds (PM CARES, PMNRF) get 100% with no cap; other approved NGOs typically get 50% subject to 10% of adjusted gross total income.

Section 80TTA / 80TTB — Interest on Savings

• 80TTA (below 60): ₹10,000 on savings account interest
• 80TTB (60+): ₹50,000 on FD + savings account interest combined

HRA Exemption — Section 10(13A)

If you receive HRA from employer AND pay rent, the LEAST of these three is exempt:

1. Actual HRA received
2. 50% of (Basic + DA) for metros; 40% for non-metros
3. Rent paid minus 10% of (Basic + DA)

Surcharge Rates — Above ₹50 Lakh Income

Note: The maximum surcharge in the New Regime is capped at 25%, even above ₹5 crore — making it more attractive for ultra-high-income earners. Plus 4% Health & Education Cess applies on (Tax + Surcharge) in both regimes.

Worked Examples

Example 1: Salaried, ₹12 lakh income, no deductions

New Regime: Income ₹12,00,000 − Standard Deduction ₹75,000 = Taxable ₹11,25,000. After Section 87A rebate, tax = NIL. Effective tax: 0%. Old Regime: Income ₹12,00,000 − Standard Deduction ₹50,000 = ₹11,50,000. Tax = ₹1,50,000 (on slab); + 4% cess ₹6,000 = ₹1,56,000. Effective tax: 13%. Winner: New Regime saves ₹1,56,000.

Example 2: Salaried, ₹20 lakh, max old-regime deductions

Deductions (Old): Standard ₹50K + 80C ₹1.5L + 80D ₹50K + 80CCD(1B) ₹50K + HRA ₹2L + Home Loan ₹2L = ₹7L total. Old Regime: Taxable ₹13L. Tax = (250K×0 + 250K×5% + 5L×20% + 3L×30%) = ₹2,02,500. + 4% cess = ₹2,10,600. New Regime: Taxable ₹19.25L (after ₹75K std). Tax = (4L×0 + 4L×5% + 4L×10% + 4L×15% + 3.25L×20%) = ₹2,45,000. + 4% cess = ₹2,54,800. Winner: Old Regime saves ₹44,200.

Example 3: Salaried, ₹30 lakh, partial deductions

Deductions (Old): Standard ₹50K + 80C ₹1.5L + 80D ₹50K = ₹2.5L total. Old Regime: Taxable ₹27.5L. Tax = ₹6,12,500 + 4% cess = ₹6,37,000. New Regime: Taxable ₹29.25L (after ₹75K std). Tax = ₹4,72,500 + 4% cess = ₹4,91,400. Winner: New Regime saves ₹1,45,600.

Tax Planning Tips for FY 2025-26

• Compare both regimes early in the year — don’t wait until ITR filing. Your tax-saving investments should align with your chosen regime.
• If choosing Old Regime, plan investments before March 31 to claim 80C, 80D, 80CCD(1B). PPF, ELSS, and tax-saver FDs allow lump-sum top-ups in March.
• NPS additional ₹50K (Section 80CCD(1B)) is the most underutilised deduction. It comes on top of the ₹1.5L 80C limit and is available even in the old regime.
• Health insurance is mandatory wisdom — even for healthy individuals, the ₹25K-₹1L 80D deduction makes premium effectively cheaper, and the coverage is valuable.
• For HNIs above ₹5 crore: The new regime caps surcharge at 25% vs 37% in old — saving ₹12% on incremental income above ₹5 crore.
• Make estimated tax planning mid-year — pay advance tax (15% by 15 June, 45% by 15 September, 75% by 15 December, 100% by 15 March) to avoid 234C interest.
• Senior citizens: Form 15H avoids TDS on FD interest if income is below taxable. Useful even when you’re paying tax via advance tax.

Frequently Asked Questions