How does the income tax calculator work?

The calculator estimates your tax by applying the latest tax slabs for FY 2025-26. It subtracts deductions and standard deduction, calculates slab-wise tax, adds health and education cess, and shows the final tax payable.

Income Tax Calculator India FY 2025-26

Q: What is the income tax slab for FY 2025-26?

For FY 2025-26 (New Regime), the slabs are: 0-4L (0%), 4-8L (5%), 8-12L (10%), 12-16L (15%), 16-20L (20%), 20-24L (25%), and Above 24L (30%).

Q: Is income up to ₹12 lakh tax free?

Yes, under the New Tax Regime, if your taxable income after standard deduction is up to ₹12,00,000, you get a full rebate under Section 87A, making your tax zero.

Q: What is standard deduction in the new tax regime?

As per Budget 2025, the standard deduction for salaried individuals and pensioners in the New Tax Regime is ₹75,000.

Q: Which tax regime is better?

The New Regime is better for those with few investments. The Old Regime is better for heavy savers with deductions exceeding ₹4.25 Lakh (including 80C, HRA, etc.).

Income & Regime

Annual Gross Income (₹)

Other Income (₹)

Employment Type

Select Tax Regime

Old Regime Deductions & Exemptions

Section 80C (LIC, PPF, ELSS - Max 1.5L)

Health Insurance (Sec 80D)

HRA Exemption

Home Loan Interest (Sec 24)

NPS (Sec 80CCD) / Education Loan (80E)

Estimated Tax Payable

₹0

Effective Rate

Income Breakdown

Gross Annual Income ₹0

Standard Deduction ₹0

Total Taxable Income ₹0

Post-Tax Income Tax Component

Income: ₹0

Tax: ₹0

Slab Breakdown

Income Range	Rate	Tax Amount

Example Income Tax Calculation (New Regime)

Let's look at how tax is calculated for a salaried individual earning ₹15,00,000 per year in the New Tax Regime (FY 2025-26):

Gross Income: ₹15,00,000

Standard Deduction: - ₹75,000

Taxable Income: ₹14,25,000

Step-by-Step Slab Calculation:

₹0 to ₹4L (0%): ₹0

₹4L to ₹8L (5% on 4L): ₹20,000

₹8L to ₹12L (10% on 4L): ₹40,000

₹12L to ₹14.25L (15% on 2.25L): ₹33,750

Total Base Tax: ₹93,750

Add 4% Cess: ₹3,750

Final Tax Payable: ₹97,500

Understanding Income Tax in India

What is Income Tax?

Income tax is a direct tax paid to the government based on your annual earnings. In India, individuals are taxed based on "slabs," meaning you pay higher rates only on the portion of income that falls into higher brackets. To offset your tax liability, you can plan long-term wealth using a SIP Calculator.

New vs Old Tax Regime

The New Tax Regime is now the default and offers lower tax rates but removes most exemptions. The Old Tax Regime remains viable for those who can leverage significant deductions. For instance, if you have a home loan, you should calculate the interest repayment using our EMI Calculator to see how much exemption you can claim.

Deductions allowed under Old Regime

Under the Old Regime, you can reduce your taxable income through Section 80C (investing in ELSS, PPF), Section 80D (Health Insurance), and HRA. You may also check safe savings growth using the FD Calculator or analyze investment returns through a CAGR Calculator to decide if the tax-saving investment is worth it.

How the Rebate and Marginal Relief works

A rebate under Section 87A provides complete relief to individuals earning below a certain threshold. In the New Regime, if your net income is below ₹12 Lakh, the rebate makes your tax liability zero. Marginal Relief ensures that if your income slightly exceeds ₹12 Lakh, the tax you pay does not exceed the extra income earned over that limit. Business owners should also check the GST Calculator for complete fiscal planning.

Tips to Reduce Income Tax Legally

Maximize Section 80C

Invest up to ₹1.5 Lakh in ELSS, PPF, or EPF to reduce taxable income under the Old Regime.

Health Insurance (80D)

Premiums paid for yourself and parents can provide additional deductions up to ₹75,000.

Home Loan Benefits

Claim up to ₹2 Lakh interest deduction under Section 24 and principal under 80C.

NPS Contribution

An additional ₹50,000 deduction is available for National Pension System contributions.

Frequently Asked Questions

What is the income tax slab for FY 2025-26?

Under the New Tax Regime (Budget 2025), slabs are: 0-4L (0%), 4-8L (5%), 8-12L (10%), 12-16L (15%), 16-20L (20%), 20-24L (25%), and above 24L (30%).

Is income up to ₹12 lakh tax free?

Yes. If your taxable income (after deduction) is ₹12,00,000 or less, you qualify for a full rebate under Section 87A in the New Regime.

What is standard deduction in the new tax regime?

Salaried employees and pensioners receive a flat standard deduction of ₹75,000 under the New Regime and ₹50,000 under the Old Regime for FY 2025-26.

Which tax regime is better?

For most individuals with limited investments, the New Tax Regime is simpler and offers lower tax rates. Heavy savers often prefer the Old Regime. Use our 'Compare Both' mode to find your best option.