Income Tax Calculator FY 2025-26 – Old vs New Regime Comparison

Income Tax Calculator – FY 2025-26

Understanding Income Tax in India – FY 2025-26

Income tax in India is a direct tax levied by the Central Government on the annual income of individuals, HUFs, firms, and companies. For individual taxpayers, income is taxed progressively — meaning higher income attracts a higher tax rate on the portion falling in each slab. India currently offers two parallel tax regimes — the old regime (with deductions and exemptions) and the new regime (lower slabs, fewer deductions).

The new tax regime was introduced in Budget 2020 and has been made the default regime from FY 2023-24 onwards. However, taxpayers can continue with the old regime if their deductions make it more beneficial. This income tax calculator helps you compute tax under both regimes simultaneously so you can make an informed choice.

Choosing the wrong regime can cost you thousands to lakhs of rupees annually. A taxpayer in the 30% slab with maximum 80C (INR 1.5 lakh), HRA exemption (INR 2 lakh), and home loan interest deduction (INR 2 lakh) — a total of INR 5.5 lakh in deductions — would save approximately INR 1.7 lakh in tax annually under the old regime compared to the new.

Income Tax Slabs – New Regime FY 2025-26

Section 87A Rebate (New Regime): For income up to INR 12,00,000, the full tax computed as per slabs is rebated under Section 87A — resulting in zero tax for net incomes up to INR 12 lakh. Standard deduction of INR 75,000 means effective zero tax up to INR 12,75,000 CTC for salaried individuals.

Income Tax Slabs – Old Regime FY 2025-26

Section 87A Rebate (Old Regime): For income up to INR 5,00,000, tax is fully rebated under Section 87A — resulting in zero tax. Maximum rebate available: INR 12,500.

Key Deductions Under the Old Tax Regime

• Standard Deduction (INR 50,000): Available to all salaried employees and pensioners. No documentation required.
• Section 80C (Up to INR 1,50,000): EPF, PPF, ELSS, NSC, LIC premium, tax-saving FD, home loan principal, children's tuition fees.
• Section 80CCD(1B) (Up to INR 50,000): Additional NPS contribution, over and above the 80C limit. Available in both old and new regime (only 80C deductions are restricted in new regime).
• Section 24(b) (Up to INR 2,00,000): Interest paid on home loan for self-occupied property.
• Section 80D (Up to INR 1,00,000): Medical insurance premiums for self, family, and parents. INR 25,000 for self/family + INR 25,000 for parents (INR 50,000 each if parents are senior citizens).
• HRA Exemption (Section 10(13A)): For salaried employees who live in rented accommodation. Use our HRA Calculator to compute the exact exempt amount.

Frequently Asked Questions (FAQs)