Income Tax Calculator India FY 2025-26

Q: What changed in income tax in Union Budget 2025?

The Union Budget 2025 (February 2025) raised the basic exemption limit to ₹4 lakh (from ₹3L), restructured tax slabs with wider brackets, and increased the Section 87A rebate to ₹60,000 (from ₹25,000), making income up to ₹12 lakh tax-free under the new regime. The standard deduction of ₹75,000 for salaried individuals remains unchanged. Old regime slabs were not changed.

Q: Is income up to ₹12 lakh really tax-free under the new regime?

Yes, effectively. Under the new regime for FY 2025-26, the rebate under Section 87A has been increased to ₹60,000. If your total income is up to ₹12 lakh, the entire tax is wiped out by the rebate. For salaried individuals, the ₹75,000 standard deduction means gross salary up to ₹12,75,000 results in zero tax.

Q: What deductions are available under the new regime?

The new regime offers very limited deductions: standard deduction of ₹75,000 for salaried individuals, employer's NPS contribution under 80CCD(2), and family pension deduction under Section 57(iia). Section 80C, 80D, HRA, LTA, and home loan interest (Sec 24) are NOT available under the new regime.

Q: How does surcharge work on income tax in India?

Surcharge is an additional tax on income tax at progressive rates: 10% for income ₹50L–₹1Cr, 15% for ₹1Cr–₹2Cr, 25% for ₹2Cr–₹5Cr. Under the old regime, income above ₹5Cr attracts 37% surcharge. Under the new regime, surcharge is capped at 25%. A 4% Health & Education Cess is applied on tax plus surcharge.

Calculate your income tax under the old and new regimes for FY 2025-26. Compare both regimes side-by-side, plan optimal deductions under 80C, 80D, HRA, and NPS, and see your full tax breakdown with rebate u/s 87A, surcharge, and cess. Updated with Union Budget 2025 changes.

Enter your annual income to calculate income tax under the selected regime

Annual income

₹

Your gross annual income (salary, business, profession)

Tax regime

New regime is the default from FY 2023-24

Salaried individual

Yes

Salaried individuals get a standard deduction

—

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How to Use This Calculator

Quick Tax tab

Enter your annual income, select the tax regime (new or old), and indicate whether you are salaried. The calculator shows your income tax broken down by slab, rebate u/s 87A, surcharge, cess, effective tax rate, and approximate take-home pay. If you select the old regime, expand "More options" to enter deductions under 80C, 80D, HRA, and more.

Old vs New Comparison tab

See a side-by-side comparison of your tax under both regimes. Enter your deductions to see the full breakdown for each regime and find out which one saves you more. The calculator shows exact tax under both regimes, the difference, and a clear recommendation.

Tax Planning tab

Enter your income and current deductions to see how much more you could save under the old regime by maximising 80C, 80D, NPS, and home loan interest. The calculator suggests specific investments and shows your break-even point.

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The Formula

Income tax in India is calculated progressively — you pay the higher rate only on income within each slab:

Taxable Income = Gross Income − Deductions − Standard Deduction

New Tax Regime FY 2025-26 (default):
₹0 – ₹4,00,000: Nil
₹4,00,001 – ₹8,00,000: 5%
₹8,00,001 – ₹12,00,000: 10%
₹12,00,001 – ₹16,00,000: 15%
₹16,00,001 – ₹20,00,000: 20%
₹20,00,001 – ₹24,00,000: 25%
Above ₹24,00,000: 30%
Standard deduction: ₹75,000 (salaried)
Rebate u/s 87A: up to ₹60,000 (taxable income up to ₹12L)

Old Tax Regime FY 2025-26:
₹0 – ₹2,50,000: Nil
₹2,50,001 – ₹5,00,000: 5%
₹5,00,001 – ₹10,00,000: 20%
Above ₹10,00,000: 30%
Standard deduction: ₹50,000 (salaried)
Rebate u/s 87A: up to ₹12,500 (taxable income up to ₹5L)

Surcharge (on tax):
10% (₹50L–₹1Cr) | 15% (₹1Cr–₹2Cr) | 25% (₹2Cr–₹5Cr)
New regime: capped at 25% | Old regime: 37% above ₹5Cr

Cess: 4% Health & Education Cess on (tax + surcharge)

The key difference: the new regime has lower slab rates but almost no deductions. The old regime has higher base rates but allows 80C (₹1.5L), 80D, HRA, LTA, NPS, home loan interest, and many more. For most people earning under ₹15L with no significant deductions, the new regime is better.

Example

Priya — IT professional in Bangalore earning ₹15,00,000

Priya earns ₹15L/year, invests ₹1.5L in PPF (80C), pays ₹25,000 health insurance (80D), and has no HRA exemption (owns her home with a ₹2L home loan interest). She wants to know: old or new regime?

Step 1: New Regime calculation

Gross salary₹15,00,000

Standard deduction−₹75,000

Taxable income₹14,25,000

₹0–4L: Nil₹0

₹4–8L: 5%₹20,000

₹8–12L: 10%₹40,000

₹12–14.25L: 15%₹33,750

Tax before cess₹93,750

Cess (4%)₹3,750

Total tax (New)₹97,500

Step 2: Old Regime calculation

Gross salary₹15,00,000

Standard deduction−₹50,000

80C (PPF)−₹1,50,000

80D (Health)−₹25,000

Home loan interest (Sec 24)−₹2,00,000

Taxable income₹10,75,000

₹0–2.5L: Nil₹0

₹2.5–5L: 5%₹12,500

₹5–10L: 20%₹1,00,000

₹10–10.75L: 30%₹22,500

Tax before cess₹1,35,000

Cess (4%)₹5,400

Total tax (Old)₹1,40,400

Verdict

Priya saves ₹42,900/year (₹3,575/month) by staying with the new regime, even though she claims ₹4.25L in deductions under the old regime. The new regime's lower slab rates more than compensate.

FAQ

Should I choose the old regime or the new regime for FY 2025-26? ▼

The new regime is better for most taxpayers, especially those with limited deductions. With Budget 2025 changes, income up to ₹12 lakh (₹12.75L for salaried) is effectively tax-free under the new regime. The old regime is worth considering only if you claim significant deductions — typically ₹3-5 lakh or more through 80C, 80D, HRA, home loan interest, and NPS combined. Use the "Old vs New" tab to compare with your specific deductions.

What changed in income tax in Union Budget 2025? ▼

The Union Budget 2025 (February 2025) made significant changes to the new tax regime: the basic exemption limit was raised to ₹4 lakh (from ₹3L), tax slabs were restructured with wider brackets, and the Section 87A rebate was increased to ₹60,000 (from ₹25,000), making income up to ₹12 lakh tax-free. The standard deduction of ₹75,000 for salaried individuals (raised in Budget 2024) remains unchanged. The old regime slabs were not changed.

Is income up to ₹12 lakh really tax-free under the new regime? ▼

Yes, effectively. Under the new regime for FY 2025-26, the rebate under Section 87A has been increased to ₹60,000. If your total income (excluding special rate income like capital gains) is up to ₹12 lakh, the entire tax is wiped out by the rebate. For salaried individuals, the ₹75,000 standard deduction means gross salary up to ₹12,75,000 (₹12.75 lakh) results in zero tax. Marginal relief ensures you do not pay disproportionate tax if your income slightly exceeds ₹12 lakh.

What deductions are available under the new regime? ▼

The new regime offers very limited deductions. The main ones are: standard deduction of ₹75,000 for salaried individuals, employer's contribution to NPS under Section 80CCD(2) (up to 14% of salary for central govt, 10% for others), and deduction for family pension under Section 57(iia). Notably, Section 80C, 80D, HRA, LTA, and home loan interest (Sec 24) are NOT available under the new regime. This is the trade-off for lower slab rates.

How does surcharge work on income tax in India? ▼

Surcharge is an additional tax on income tax (not on income itself). It applies at progressive rates: 10% for income ₹50L–₹1Cr, 15% for ₹1Cr–₹2Cr, and 25% for ₹2Cr–₹5Cr. Under the old regime, income above ₹5Cr attracts a 37% surcharge. Under the new regime, surcharge is capped at 25% regardless of income level. Marginal relief applies to ensure the surcharge does not exceed the incremental income above the threshold. A 4% Health & Education Cess is then applied on (tax + surcharge).

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