Income Tax Calculator
Calculate your income tax for FY 2025-26 (AY 2026-27) under both the Old and New tax regimes. Compare your tax liability side-by-side, factor in deductions and the Section 87A rebate, and find out which regime saves you more.
This calculator is useful in several situations, including Tax Planning & Investment Optimization, Salary Package Structuring, Quarterly Advance Tax Projections, and Annual Financial Roadmap Auditing. In each case, it applies the correct formula automatically so you get a precise result without manual calculation.
Income Tax Calculator
Calculate your estimated income tax liability under the Indian tax regime for FY 2025-26 (AY 2026-27).
This is an estimate for individuals below 60 years of age. It includes the Section 87A rebate but does not account for surcharge (applicable above ₹50 lakh income), marginal relief near the rebate threshold, or deductions under the old regime. Consult a tax advisor for exact filing figures.
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How the Income Tax Calculator Works
Follow these simple steps to get accurate results instantly.
Enter Annual Gross Income
Input your total gross annual income — salary, business income, freelance earnings, or income from multiple sources combined. This is your income before any deductions are applied.
Select Eligible Deductions
If you're comparing the Old Regime, enter your eligible deductions — Section 80C investments, Section 80D health insurance, HRA, home loan interest under Section 24, and the standard deduction. The New Regime allows only the standard deduction and a few employer-side benefits, so this step matters less there.
Compare and View Results
See your tax liability calculated under both the Old and New regimes side by side, including applicable cess, so you can identify which regime results in lower tax for your specific income and deductions.
Income Tax Calculation Method
Tax Payable = (Taxable Income taxed across applicable slab rates) + 4% Health & Education Cess − Section 87A Rebate (if eligible)
Indian income tax is calculated progressively: your taxable income isn't taxed at one flat rate, but is split across slabs, with each slab taxed only at its own rate. For instance, if you fall into the 20% slab, that 20% rate applies only to the portion of income within that slab — not to your entire income. The slabs and rates themselves differ depending on which regime you choose: Under the New Tax Regime (now the default), there is no tax up to ₹4 lakh, 5% from ₹4–8 lakh, 10% from ₹8–12 lakh, 15% from ₹12–16 lakh, 20% from ₹16–20 lakh, 25% from ₹20–24 lakh, and 30% above ₹24 lakh. Salaried taxpayers also get a flat ₹75,000 standard deduction here. Under the Old Tax Regime, the slabs are: no tax up to ₹2.5 lakh, 5% from ₹2.5–5 lakh, 20% from ₹5–10 lakh, and 30% above ₹10 lakh, with a smaller ₹50,000 standard deduction — but access to a much wider range of deductions (80C, 80D, HRA, home loan interest, and more). After calculating tax across the slabs, two more steps apply. First, if you qualify for the Section 87A rebate, it's subtracted from your tax — this can bring your liability to zero. Second, a flat 4% Health and Education Cess is added on top of whatever tax remains after the rebate. High earners (income above ₹50 lakh) may also owe a surcharge on top of this, which is capped at 25% under the New Regime and can go up to 37% under the Old Regime.
Example Calculation
Input: Annual Taxable Income: ₹12,00,000 under the New Tax Regime
Output: Tax before rebate ≈ ₹60,000 (₹0 on first ₹4L + ₹20,000 on next ₹4L @5% + ₹40,000 on next ₹4L @10%); fully offset by the Section 87A rebate (up to ₹60,000 for income up to ₹12L) → Final tax liability: ₹0
Common Uses
- • Tax Planning & Investment Optimization
- • Salary Package Structuring
- • Quarterly Advance Tax Projections
- • Annual Financial Roadmap Auditing
Frequently Asked Questions
Find answers to common questions about this calculator.
How Indian Income Tax Works: Old Regime vs New Regime
Calculating your income tax in India starts with one decision that affects everything else: which tax regime to use. Since the New Tax Regime became the default option from FY 2023-24 onward, most taxpayers now need to actively compare both systems rather than simply filing under whichever applied last year. An Income Tax Calculator makes this comparison fast — enter your income and deductions once, and see your liability under both regimes side by side.
For FY 2025-26 (the year covered by ITRs filed in 2026), the government made the New Regime considerably more attractive by raising the Section 87A rebate and the standard deduction. As a result, income up to ₹12.75 lakh is effectively tax-free for most salaried taxpayers under the New Regime — a threshold that didn't exist in earlier years. The Old Regime remains unchanged and continues to reward taxpayers who actively invest in tax-saving instruments.
---Old Regime vs New Regime: Side-by-Side Comparison
The table below summarizes the core differences for FY 2025-26 (AY 2026-27):
| Filing Parameter | Old Tax Regime | New Tax Regime (Default) |
|---|---|---|
| Basic Exemption Limit | ₹2,50,000 | ₹4,00,000 |
| Standard Deduction (Salaried) | ₹50,000 | ₹75,000 |
| Section 87A Rebate Threshold | Net taxable income up to ₹5,00,000 (rebate up to ₹12,500) | Net taxable income up to ₹12,00,000 (rebate up to ₹60,000) |
| Effective Tax-Free Income (Salaried) | Up to ₹5,50,000 (after standard deduction) | Up to ₹12,75,000 (after standard deduction) |
| Section 80C, 80D, HRA, Section 24 Deductions | Fully available, subject to individual caps | Not available (except employer NPS under 80CCD(2)) |
| Maximum Surcharge Rate | Up to 37% (income above ₹5 crore) | Capped at 25% |
| Best Suited For | Taxpayers with significant 80C/80D/HRA/home-loan deductions | Taxpayers with few deductions, or income up to ~₹12-15 lakh |
Note: Health and Education Cess of 4% applies on top of the calculated tax (after rebate) under both regimes.
---How Slab-Based Taxation Actually Works
A common misunderstanding is thinking that moving into a higher tax bracket means your entire income gets taxed at that higher rate. That's not how it works. Each slab rate applies only to the income that falls within that specific band — income below it is taxed at the lower rates that applied to those earlier slabs.
For example, under the New Regime, the slabs for FY 2025-26 are:
| Taxable Income Slab | Tax Rate |
|---|---|
| Up to ₹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% |
So someone with ₹15 lakh in taxable income under the New Regime doesn't pay 15% on all ₹15 lakh. They pay nothing on the first ₹4 lakh, 5% on the next ₹4 lakh (₹20,000), 10% on the next ₹4 lakh (₹40,000), and 15% only on the remaining ₹3 lakh (₹45,000) — a base tax of ₹1,05,000, before the 4% cess is added. Once base tax is calculated, the formula is straightforward:
Final Tax Liability = (Tax across slabs − Section 87A rebate, if eligible) × 1.04
---Primary Investment Vehicles for Maximizing Old Regime Deductions
If the Old Regime works out better for you, structuring your investments across approved instruments lowers your taxable income. Here's a comparison of common options:
| Investment Vehicle | Applicable Section | Maximum Annual Cap | Lock-In Period | Return Profile |
|---|---|---|---|---|
| Equity Linked Savings Scheme (ELSS) | Section 80C | ₹1,50,000 (combined with other 80C items) | 3 Years | Market-linked equity returns |
| Public Provident Fund (PPF) | Section 80C | ₹1,50,000 (combined with other 80C items) | 15 Years | Government-backed, fixed annual rate |
| National Pension System (NPS) — Self Contribution | Section 80CCD(1B) | ₹50,000 (additional, over and above 80C) | Until age 60 | Market-linked, hybrid asset allocation |
| Health Insurance Premium | Section 80D | Up to ₹25,000 (self/family) + up to ₹50,000 (senior citizen parents) | None — annual premium | Risk protection plus tax deduction |
Common Mistakes to Avoid When Filing
1. Forgetting to Declare Income from Other Sources
A frequent error is reporting only salary or business income while leaving out smaller income streams — savings account interest, short-term capital gains, or dividends. The Income Tax Department cross-checks your return against your Annual Information Statement (AIS), which tracks most of your financial transactions automatically. Leaving out even small amounts of declared interest or capital gains can trigger a mismatch notice and delay your refund.
2. Waiting Until March to Make Tax-Saving Investments
If you've chosen the Old Regime, putting off your 80C and 80D investments until the last weeks of the financial year often leads to rushed, suboptimal choices — or missing the window for higher TDS deduction to be corrected. Submitting investment proof to your employer early in the year lets your monthly TDS more closely match your actual annual liability, instead of one large deduction (or a large refund claim) at year-end.
3. Comparing Regimes Using Last Year's Numbers
Because the New Regime's rebate and standard deduction changed for FY 2025-26, a regime comparison done with old figures can give the wrong answer. If you compared regimes before this change and stuck with the Old Regime, it's worth re-running the comparison — many taxpayers who previously found the Old Regime cheaper now come out ahead, or roughly even, under the revised New Regime.