Income & Regime
Old Regime Deductions & Exemptions
Estimated Tax Payable
Effective Rate
0%
Income Breakdown
Slab Breakdown
| Income Range | Rate | Tax Amount |
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This calculator uses the latest Indian income tax rules as per Budget 2025. This calculator uses the latest Indian income tax rules as per Budget 2025.
How to Save Income Tax in India
Tax planning is an integral part of wealth management. While the New Regime offers lower rates, the Old Regime provides several paths to minimize liability through deductions:
- Section 80C: Invest up to ₹1.5 Lakh in tax-saving instruments like PPF, ELSS, and Life Insurance. Plan these using our SIP Calculator.
- Section 80D: Claim deductions on health insurance premiums for yourself and parents.
- NPS (Sec 80CCD): Get an additional ₹50,000 benefit by contributing to the National Pension System.
- House Rent Allowance (HRA): Salaried individuals can claim HRA exemptions based on rent paid.
- Home Loan Interest (Sec 24): Deduct up to ₹2 Lakhs on interest repayment. Use our EMI Calculator to plan these deductions.
Advance Tax – Who Should Pay?
Advance tax is the "pay-as-you-earn" scheme where individuals pay tax in installments throughout the financial year instead of a lumpsum at the end. For more details, visit our Advance Tax Calculator.
- Eligibility: If your total tax liability for the year (after TDS) is ₹10,000 or more.
- Due Dates: 15th of June (15%), September (45%), December (75%), and March (100%).
Capital Gains Tax Explained
Profits from the sale of assets like stocks or property are taxed as capital gains. You should plan capital gains tax carefully to maximize net profits.
- LTCG: Long Term Capital Gains on listed equity are taxed at 12.5% for gains above ₹1.25 Lakh.
- STCG: Short Term Capital Gains on equity are taxed at 20%.
- Debt vs Equity: Debt mutual funds are now taxed at your income tax slab rates regardless of holding period.
TDS vs TCS – What is the Difference?
Both are mechanisms to collect tax at the source but apply to different sides of a transaction. Track these using our TDS and TCS tools.
- TDS (Tax Deducted at Source): Deducted by the payer (employer or bank) from income like salary or interest.
- TCS (Tax Collected at Source): Collected by the seller from the buyer at the time of sale (e.g., luxury cars or foreign remittances).
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 or check your long-term growth with a CAGR tool.
Which tax regime is better for your salary?
Deciding between regimes depends on your total deductions. If you are paying for a home loan and investing ₹1.5L in 80C, the Old Tax Regime might be better. However, with the Budget 2025 updates and zero tax up to ₹12 Lakh, the New Tax Regime is increasingly becoming the preferred choice for most salaried professionals.
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.
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. Start an equity SIP today.
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. Calculate EMI impact easily.
NPS Contribution
An additional ₹50,000 deduction is available for National Pension System contributions.