Income Tax Calculator (FY 2025-26)
Compare your income tax under Old and New tax regimes. Calculate tax liability with deductions under Section 80C, 80D, and HRA.
Note: 80C, 80D, and HRA deductions only apply under the Old Tax Regime
How to Use the Income Tax Calculator
- Enter annual income: Input your total annual gross income for the financial year.
- Select age group: Choose your age bracket, as tax slabs differ for senior citizens under the old regime.
- Enter deductions: Provide your investments in 80C, 80D, and eligible HRA to accurately calculate benefits under the old regime.
- Compare old vs new regime: Review the results to see which regime helps you minimize your tax liability.
Understanding Indian Income Tax (FY 2025-26)
The Indian Income Tax system offers taxpayers a choice between two distinct tax regimes: the Old Tax Regime and the New Tax Regime. Each regime is designed to cater to different financial situations, and choosing the right one can lead to significant tax savings.
The Old Tax Regime
The Old Tax Regime allows taxpayers to claim a variety of exemptions and deductions to reduce their taxable income. Some of the most popular tax-saving options include:
- Section 80C: Up to ₹1.5 lakh deduction for investments in PPF, ELSS, EPF, Life Insurance, etc.
- Section 80D: Deductions on health insurance premiums for self and parents.
- HRA Exemption: Partial or full exemption on House Rent Allowance for those living in rented accommodations.
- Home Loan Interest: Deduction up to ₹2 lakh under Section 24(b).
This regime is highly beneficial for individuals who have structured tax-saving investments or significant housing loan commitments.
The New Tax Regime
Introduced to simplify the tax process, the New Tax Regime features lower tax rates across different income slabs. However, to avail of these lower rates, taxpayers must forego most of the deductions and exemptions available in the old regime, such as Section 80C, 80D, and HRA.
The New Regime is now the default option and is particularly advantageous for those who do not wish to lock their money in specific tax-saving instruments or those with minimal eligible deductions.
How to Choose?
The decision between the old and new tax regimes boils down to a mathematical comparison of your total tax liability under both scenarios. Our Income Tax Calculator simplifies this process by computing your taxes side-by-side. By entering your income and deductions, you can quickly identify which regime offers the lowest tax outgo.
Remember, salaried employees can choose their preferred regime each year, providing the flexibility to adapt to changing financial circumstances and new investments.
Frequently Asked Questions
Which tax regime is better for FY 2025-26?
The better tax regime depends on your eligible deductions. If you have significant deductions (like Section 80C, HRA, 80D), the Old Regime might be beneficial. Otherwise, the New Regime offers lower rates for zero or low deductions.
Are Section 80C deductions available in the new tax regime?
No, Section 80C deductions (up to ₹1.5 lakh) are not available under the New Tax Regime.
What is the standard deduction for FY 2025-26?
A standard deduction of ₹50,000 is available for salaried employees under both the Old and New Tax Regimes.
Is HRA exemption allowed under the New Tax Regime?
No, House Rent Allowance (HRA) exemption is only applicable under the Old Tax Regime.
Can I switch between the old and new tax regimes?
Yes, salaried individuals can choose between the old and new tax regimes every financial year.
What is the maximum limit for Section 80D deductions?
Under Section 80D, you can claim up to ₹25,000 for medical insurance premiums for self, spouse, and dependent children. An additional ₹25,000 (or ₹50,000 for senior citizens) can be claimed for parents.
Is surcharge applicable on income tax?
Yes, a surcharge is levied if the total income exceeds ₹50 Lakhs. The rate varies from 10% to 37% based on the income level.
What is Health and Education Cess?
A Health and Education Cess of 4% is added to the total tax payable (including surcharge, if any) across all income slabs.