Calculate income tax under new and old regime for FY 2025-26 with side-by-side comparison.
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Formula
NEW REGIME (FY 2024-25, AY 2025-26):
Standard deduction: ₹75,000 (salaried).
Slabs on taxable income after deduction:
0–3 L: 0%; 3–7 L: 5%; 7–10 L: 10%; 10–12 L: 15%; 12–15 L: 20%; >15 L: 30%.
Section 87A rebate: full rebate if taxable income ≤ ₹7,00,000.
Health & Education Cess: 4% on the tax payable.
OLD REGIME:
Standard deduction: ₹50,000.
Slabs (below 60): 0–2.5 L: 0%; 2.5–5 L: 5%; 5–10 L: 20%; >10 L: 30%.
Section 87A rebate: full rebate if taxable income ≤ ₹5,00,000.
Deductions allowed: 80C (₹1.5 L), 80D, 80CCD(1B) (₹50 K), HRA, home loan interest, etc.
Health & Education Cess: 4%.
Worked Examples
Salary of ₹15,00,000 (CTC): under the new regime, taxable income after standard deduction = ₹14,25,000. Tax = 5% on (7-3) L + 10% on (10-7) L + 15% on (12-10) L + 20% on (14.25-12) L = 20,000 + 30,000 + 30,000 + 45,000 = ₹1,25,000. Cess at 4% = ₹5,000. Total tax = ₹1,30,000.
Under the old regime with ₹1.5 L 80C + ₹50 K NPS + ₹25 K 80D: taxable = 15,00,000 − 50,000 (std) − 1,50,000 − 50,000 − 25,000 = ₹12,25,000. Tax = 12,500 + 1,00,000 + 67,500 = ₹1,80,000. Cess = ₹7,200. Total = ₹1,87,200. New regime saves ₹57,200.
About the Income Tax Calculator India
Tax season in India can be overwhelming, especially after the introduction of the 'New Tax Regime' which co-exists with the 'Old Tax Regime.' Choosing the wrong one can cost you thousands of rupees in extra tax. This income tax calculator is updated for FY 2025-26 (Assessment Year 2026-27) to give you a side-by-side comparison so you can make the smartest choice for your wallet.
New Tax Regime (FY 2025-26) - The Default Choice
The Government of India is heavily incentivizing the New Tax Regime. In the latest budget, the slabs were further widened:
- Up to ₹3 Lakh: 0%
- ₹3 Lakh to ₹7 Lakh: 5%
- ₹7 Lakh to ₹10 Lakh: 10%
- ₹10 Lakh to ₹12 Lakh: 15%
- ₹12 Lakh to ₹15 Lakh: 20%
- Above ₹15 Lakh: 30%
The Big Benefit: Under the New Regime, if your total taxable income is up to ₹7 Lakh, you get a full rebate under Section 87A, meaning you pay ZERO tax. Additionally, a standard deduction of ₹75,000 is now available for salaried employees even in the new regime.
Old Tax Regime - The Investor's Choice
The Old Regime allows you to reduce your taxable income using various deductions. If you have a home loan, pay high rent, or invest heavily in tax-saving instruments, this might still be better for you. Key deductions include:
1. Section 80C (up to ₹1.5 Lakh): PPF, ELSS, LIC, EPF, and Home Loan Principal.
2. Section 24(b) (up to ₹2 Lakh): Home loan interest.
3. Section 80D: Health insurance premiums for self and parents.
4. HRA (House Rent Allowance): Exemption based on rent paid (very useful for people in metros).
5. Standard Deduction: ₹50,000 for salaried individuals.
Which Regime Should You Choose?
There is no 'one-size-fits-all' answer in India.
- Choose the New Regime if: You don't have many investments, you don't live in a rented house, and you prefer a simple tax filing process with lower rates.
- Choose the Old Regime if: Your total deductions (80C + 80D + HRA + Home Loan) exceed ₹3.75 Lakh to ₹4.25 Lakh (depending on your income level).
Our calculator runs the math for both regimes simultaneously. You just enter your salary and investments, and we'll tell you exactly how much you save in each. It's the easiest way to decide which one to 'opt-in' for on your HR portal at the start of the financial year.
Understanding Surcharge and Health & Education Cess
In India, your tax liability isn't just the slab rate.
1. Health & Education Cess: A mandatory 4% is added to your total tax amount.
2. Surcharge: If your income exceeds ₹50 Lakh, an additional surcharge (10% to 37%) is applied. Note that the highest surcharge rate in the New Regime was recently reduced from 37% to 25%, making it more attractive for Ultra-High Net Worth Individuals (UHNIs).
Practical Tips for Tax Planning
- Start Early: Don't wait until March to make your 80C investments. Start a SIP in an ELSS fund in April to get the benefit of rupee cost averaging.
- Verify HRA: If you pay rent to your parents, you can claim HRA exemption, but the rent must be transferred via bank and your parents must declare it in their ITR.
- National Pension System (NPS): Section 80CCD(1B) allows an additional ₹50,000 deduction in the Old Regime, over and above the ₹1.5 Lakh limit of 80C.
Frequently Asked Questions
Should I choose the new or old tax regime?
The new regime is now better for most salaried individuals earning under ₹15 lakh with no home loan and limited 80C investments. The old regime usually still wins for those with a home loan, full 80C, NPS, and significant HRA exemption. Run both with this calculator.
What is the Section 87A rebate?
It is a tax rebate that effectively makes income up to a threshold tax-free. ₹7 lakh under the new regime, ₹5 lakh under the old regime. If your taxable income is at or below the threshold, your tax liability becomes zero.
Is the standard deduction the same in both regimes?
No. Standard deduction is ₹75,000 under the new regime (FY 2024-25) and ₹50,000 under the old regime. Both are available only to salaried employees and pensioners.
What is the 4% cess?
Health and Education Cess is a 4% surcharge on the income tax payable, used to fund health and education programmes. It applies under both regimes.
Are capital gains included in this calculator?
No. This calculator is for salary and other ordinary income. Capital gains (equity LTCG at 12.5%, STCG at 20%, debt at slab rate) are taxed under separate provisions and are not slab-dependent.