Income Tax Calculator India (FY 2025-26)

Comprehensive Guide to Income Tax FY 2025-26 (AY 2026-27)

The Union Budget 2025 has introduced significant reforms to the Indian Income Tax structure, primarily aiming to make the New Tax Regime more attractive. As we move into the Assessment Year 2026-27, taxpayers are faced with a crucial decision: Stick to the Old Regime with its plethora of deductions (80C, HRA, LTA) or switch to the simplified New Regime with lower tax rates and increased exemption limits.

Our Income Tax India Calculator is designed to help you navigate this complexity by instantly comparing your tax liability under both regimes based on the latest 2025 rules.

Key Changes in Budget 2025 (New Regime)

• Basic Exemption Limit: Increased from ₹3 Lakh to ₹4 Lakh.
• Standard Deduction: Increased to ₹75,000 for salaried employees (previously ₹50,000).
• Tax Slabs: The slabs have been widened to reduce tax burden for middle-income earners.
• Effective Tax-Free Salary: With the ₹75,000 standard deduction, a salaried person earning up to ₹12.75 Lakhs pays ZERO TAX.

New Tax Regime Slabs (FY 2025-26)

The simplified tax slabs applicable for individuals (below 60, senior, and super senior citizens) under the New Regime are:

Income Range	Tax Rate
₹0 - ₹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%

Note: If your net taxable income is ≤ ₹12,00,000, a rebate u/s 87A of up to ₹60,000 is applied, making the effective tax zero.

Old Tax Regime (FY 2025-26)

The Old Regime remains unchanged. It allows you to claim deductions but has higher tax rates. It is beneficial only if you have high investments/expenses eligible for deductions (Home Loan Interest, HRA, 80C, etc.).

• Basic Exemption: ₹2.5 Lakh (Age < 60), ₹3 Lakh (Age 60-80), ₹5 Lakh (Age > 80).
• Rebate u/s 87A: Available only for income up to ₹5 Lakh (Max rebate ₹12,500).
• Slabs:
  • 2.5L - 5L: 5%
  • 5L - 10L: 20%
  • Above 10L: 30%

New vs Old: Which is Better?

The "breakeven" point has shifted significantly in 2025.

• Income up to ₹12.75 Lakhs: The New Regime is the clear winner (Zero Tax). Under the Old Regime, you would need massive deductions to match this.
• Income ₹15 Lakhs - ₹20 Lakhs: You need deductions of approx ₹4.5L - ₹5L (via 80C, 80D, HRA, Home Loan) to make the Old Regime beneficial.
• High Income (> ₹20 Lakhs): The New Regime's gradual slab increase (15%, 20%, 25%) often results in lower tax unless you have very high HRA and Home Loan interest claims.

Common Deductions (Old Regime Only)

1. Section 80C: Up to ₹1.5 Lakh (EPF, PPF, ELSS, Tuition Fees).
2. Section 80D: Health Insurance Premium (₹25k for self/family + ₹50k for senior parents).
3. Section 24(b): Home Loan Interest up to ₹2 Lakh.
4. HRA: Least of (Actual HRA, 50%/40% of Basic, Rent Paid - 10% of Basic).

Frequently Asked Questions (FAQ)

1. What is the standard deduction for FY 2025-26?

For the New Tax Regime, the standard deduction has been increased to ₹75,000. For the Old Tax Regime, it remains at ₹50,000.

2. Does the New Regime have 80C deductions?

No. The New Regime disallows most deductions like 80C, 80D, HRA, and LTA. It offers lower rates in exchange for giving up these exemptions.

3. How does the ₹12 Lakh tax-free limit work?

If your taxable income (after standard deduction) is ₹12,00,000 or less, the government provides a rebate (discount) of the entire tax amount calculated. If your income crosses ₹12,00,000 (even by a small amount), the rebate is lost (subject to marginal relief provisions where applicable) and you pay tax on the slab basis.

4. Is marginal relief applicable in New Regime?

Yes, for incomes slightly exceeding ₹12 Lakhs, marginal relief ensures that the tax payable does not exceed the income earned over ₹12 Lakhs.