Income Tax Calculator (FY 2025-26)

Income Tax Calculator for India (FY 2025-26)

This calculator estimates the income tax you owe for the financial year 2025-26 (assessment year 2026-27) under both the new tax regime and the old tax regime, so you can compare the two and keep whichever leaves more money in your pocket. It is built for salaried employees, pensioners, freelancers and small business owners who want a quick, honest figure before filing a return or planning investments. You enter gross income and eligible deductions, and it applies the current slabs, the standard deduction, the Section 87A rebate, any surcharge and the 4% cess. Because the government revises rates and thresholds most Budgets, treat the numbers below as accurate for FY 2025-26 and re-check before filing.

Who it is for and why it helps

Every resident individual pays tax on total income after eligible deductions. Since FY 2023-24 the new regime is the default, but you may still opt for the old regime if your deductions are large. Use this tool when choosing between regimes, negotiating a CTC, estimating advance tax, or sanity-checking the TDS your employer deducts.

The formula in words

The sequence is identical for both regimes; only the slabs and allowed deductions differ:

• Start with gross total income (salary, business or professional income, interest, rent, capital gains and so on).
• Subtract the standard deduction — Rs. 75,000 for salaried and pensioners under the new regime, Rs. 50,000 under the old regime — plus any other allowed deductions, to arrive at taxable income.
• Apply the slab rates for the chosen regime, band by band, to compute the base tax.
• Subtract the Section 87A rebate if you qualify.
• Add surcharge if income is very high, then add the 4% Health and Education Cess on tax plus surcharge. The result is your final liability.

Slabs as of FY 2025-26

Under the new regime the slabs are: up to Rs. 4 lakh nil; Rs. 4-8 lakh at 5%; Rs. 8-12 lakh at 10%; Rs. 12-16 lakh at 15%; Rs. 16-20 lakh at 20%; Rs. 20-24 lakh at 25%; and above Rs. 24 lakh at 30%. Under the old regime the slabs are: up to Rs. 2.5 lakh nil; Rs. 2.5-5 lakh at 5%; Rs. 5-10 lakh at 20%; and above Rs. 10 lakh at 30%, with a higher basic exemption of Rs. 3 lakh for senior citizens and Rs. 5 lakh for super-senior citizens.

A fully worked example

Suppose Meera is salaried, earns a gross salary of Rs. 15,00,000 in FY 2025-26, and chooses the new regime.

• Standard deduction: Rs. 15,00,000 − Rs. 75,000 = Rs. 14,25,000 taxable income.
• 0 to Rs. 4 lakh: nil.
• Rs. 4-8 lakh at 5% = Rs. 20,000.
• Rs. 8-12 lakh at 10% = Rs. 40,000.
• Rs. 12 lakh to Rs. 14.25 lakh (Rs. 2,25,000) at 15% = Rs. 33,750.
• Base tax = Rs. 20,000 + Rs. 40,000 + Rs. 33,750 = Rs. 93,750.
• Section 87A rebate: not available, since taxable income exceeds Rs. 12 lakh.
• Add 4% cess: Rs. 93,750 × 4% = Rs. 3,750.
• Total tax payable = Rs. 97,500.

Had Meera earned Rs. 12,75,000 gross, the Rs. 75,000 standard deduction would bring taxable income to Rs. 12,00,000, where the 87A rebate wipes out the tax entirely — so a salaried person can pay zero tax up to Rs. 12.75 lakh under the new regime.

Eligibility, rules and edge cases

• Section 87A rebate: under the new regime a resident individual with taxable income up to Rs. 12 lakh pays no tax (rebate up to Rs. 60,000); under the old regime the rebate applies only up to Rs. 5 lakh (up to Rs. 12,500). It is not available to non-residents.
• Marginal relief: just above Rs. 12 lakh in the new regime, marginal relief caps the extra tax so it never exceeds the income earned above the threshold.
• Old-regime deductions: the old regime allows 80C (up to Rs. 1.5 lakh), 80D health insurance, HRA, home-loan interest under Section 24(b), the Rs. 50,000 80CCD(1B) NPS deduction and more. The new regime disallows most of these but keeps the higher standard deduction and the employer NPS contribution under 80CCD(2).
• Surcharge: applies on total income above Rs. 50 lakh; the new regime caps the top surcharge at 25% instead of the old regime's 37%.
• Capital gains and other special-rate income are taxed at their own rates and do not qualify for the 87A rebate.

Tips and common mistakes

• Add interest from savings accounts and fixed deposits — it is taxable and often overlooked.
• Compare both regimes every year; the winner shifts as your salary and investments change.
• The rebate reduces tax, not income — crossing the threshold by a rupee does not tax your whole income, thanks to marginal relief.
• Cess is always 4% of tax, so build it into the estimate rather than treating it as an afterthought.
• The new regime is the default; you must actively opt for the old regime, and for business or professional income you must file Form 10-IEA to do so.

Frequently asked questions

Which regime should I choose for FY 2025-26 — old or new?

Choose the new regime if you have few deductions, since salaried individuals pay no tax up to Rs. 12.75 lakh and the slab rates are lower. The old regime usually wins only when your deductions such as 80C, HRA, home-loan interest and 80D are large enough to reduce taxable income substantially. Compute both before deciding.

How much income is tax-free under the new regime in FY 2025-26?

A resident salaried person pays zero tax up to Rs. 12.75 lakh, because the Rs. 75,000 standard deduction plus the Section 87A rebate (available up to Rs. 12 lakh taxable income) cover the liability. A non-salaried resident individual gets the same benefit up to Rs. 12 lakh of taxable income.

What is the standard deduction for FY 2025-26?

Salaried employees and pensioners get a standard deduction of Rs. 75,000 under the new regime and Rs. 50,000 under the old regime. It is applied automatically against salary income before tax is calculated.

What is the Section 87A rebate and who qualifies?

It is a rebate that reduces or eliminates tax for lower-income resident individuals. Under the new regime it applies when taxable income is up to Rs. 12 lakh, with a rebate up to Rs. 60,000; under the old regime it applies only up to Rs. 5 lakh, with a rebate up to Rs. 12,500. It does not apply to non-residents or to special-rate income like capital gains.

Is the 4% cess charged on income or on tax?

The 4% Health and Education Cess is charged on the tax amount plus any surcharge, not on your income. For example, if your tax is Rs. 93,750, the cess is Rs. 3,750, making the total Rs. 97,500.

Can I claim 80C and HRA deductions under the new regime?

No. The new regime does not allow most deductions such as 80C, HRA or home-loan interest on a self-occupied house. It does permit the standard deduction and the employer's NPS contribution under Section 80CCD(2).