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Income Tax Calculator
Filing income tax returns (ITR) is an essential financial responsibility for Indian taxpayers. However, the process can sometimes feel quite daunting due to the options of multiple tax slabs and complex calculations. ...Read More
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BASIC DETAILS
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ANNUAL INCOME DETAILS
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DEDUCTIONS UNDER 80C
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DEDUCTIONS UNDER 80D
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OTHER DEDUCTIONS (COMMONLY USED)
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TAXES PAID
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SUMMARY
01BASIC DETAILS1/7
02ANNUAL INCOME DETAILS2/7
03DEDUCTIONS UNDER 80C3/7
04DEDUCTIONS UNDER 80D4/7
05OTHER DEDUCTIONS (COMMONLY USED)5/7
06TAXES PAID6/7
07SUMMARY7/7
| Old Regime | New Regime | |
|---|---|---|
| Gross Income | ₹ | |
| Total Deduction (including Standard Deduction) | ||
| Net Taxable Income | ||
| Rebate under Section 87A | ||
| Tax Payable | ||
| Surcharge | ||
| Health and Education Cess | ||
| Taxes Already Paid | ||
| Net Tax Payable (Negative Value means Refund) |
What Is an Income Tax Calculator?
An income tax calculator enables tax liability estimation with the basic inputs, such as income, eligible deductions and exemptions. Taxpayers must enter the financial details according to the chosen tax regime, i.e., old or new. Unlike manual calculation, this tax calculator provides accurate results, leaving no scope for errors.
However, you should check if the calculator is updated as per the latest Union Budget for error-free results based on the new tax rules.
How to Use Income Tax Calculator Online for FY 2025-26 & AY 2026-27?
The tax calculation in India is based on particular slabs and varies according to the taxpayer’s annual income. These slabs indicate the tax rate. If the income in a year is higher than the previous year, the tax bracket will differ. You can opt to file the returns under two tax regimes, i.e., the old tax regime and the new tax regime. The two regimes have different tax slabs.
Under the old tax regime, the Individual taxpayers are classified according to their age.
Resident and Non-resident taxpayers less than 60 years.
Senior Citizens (Resident) 60 years or more but less than 80 years.
Super Senior Citizens (Resident) 80 years or more.
The slab rates and exemptions are different for each group.
However, the slab rates for FY 25-26 (AY26-27) under the new tax regime are uniform and not age-related. The income tax slabs are different for individuals, HUFs, Companies, and Partnership firms.
How to Understand Income Tax Slabs?
The income tax calculation in India happens following specific slabs. The slabs represent different taxpayer categories based on their annual income. With one glimpse of this slab, you can decipher that an increase in your income will result in higher tax rates. You will also see that there are two different tax slabs under the old and new regime.
To comprehend the tax slabs, you must be aware of three main categories in which taxpayers are divided under the old regime. These are:
- Individual taxpayers under the age group of 60 years for all residents and NRI citizens of India
- Resident senior citizens between 60 years to 80 years
- Resident super senior citizen individuals are the ones above 80 years old
However, under the new tax regime, the income tax slabs are common for all the above three categories of individuals. Moreover, the tax slabs are different for individuals, HUFs, companies, partnership firms, etc.
India follows a progressive tax system to ensure fair taxation. This means only the part of your taxable income that falls under a higher tax slab gets taxed at a higher rate.
Income Tax Rates for New and Old Regimes
The income tax rates for the new and old regimes differ significantly. Several exemptions and deductions available in the old tax regime are eliminated in the new tax regime. The exemptions and deductions are limited under the new tax regime, but the tax rates are lower.
The difference in the tax rates for the old and new tax regimes is given below. Taxpayers can evaluate the tax liability under both regimes and choose to file tax returns under the more beneficial one.
TAX RATES FOR FY25-26 (AY 2026-27)
Income Tax Slab |
Old Regime FY 25-26 (AY 26-27) |
Income Tax Slab |
New Regime FY 25-26 (AY 26-27)Tax Rate |
Upto Rs. 2,50,000 |
Nil |
Upto Rs. 4,00,000 |
Nil |
Rs. 2,50,001 upto Rs. 5,00,000 |
5% |
Rs. 4,00,001 upto Rs. 8,00,000 |
5% |
Rs. 5,00,001 upto Rs. 10,00,000 |
20% |
Rs. 8,00,001 upto Rs. 12,00,000 |
10% |
Above Rs. 10,00,000 |
30% |
Rs . 12,00,001 upto Rs. 16,00,000 |
15% |
Rs. 16,00,001 to Rs. 20,00,000 |
20% |
||
Rs. 20,00,001 to Rs. 24,00,000 |
25% |
||
Above Rs. 24,00,000 |
30% |
Under the new tax regime, the rates are uniform for all categories, i.e., individuals, senior citizens and super senior citizens.
The tax rates for senior citizens and super senior citizens under the Old Tax Regime are given below:
Tax Rates for Resident Senior Citizens (60 to 80 years)
Income Tax Slab |
Tax Rate for FY 25-26 (AY 26-27) |
Upto Rs. 3,00,000 |
Nil |
Rs. 3,00,001 upto Rs. 5,00,000 |
5% |
Rs. 5,00,001 upto Rs. 10,00,000 |
20% |
Above Rs. 10,00,000 |
30% |
Income Tax Slab |
Tax Rate FY 25-26 (AY 26-27) |
Upto Rs. 5,00,000 |
Nil |
Rs. 5,00,001 upto Rs. 10,00,000 |
20% |
Above Rs. 10,00,000 |
30% |
TAX RATES FOR FY 25-26 (AY 26-27)
Income Tax Slab |
Old Regime FY 25-26 (AY 26-27) |
Income Tax Slab |
New Regime FY 25-26 (FY 26-27) Tax Rates |
Upto Rs. 2,50,000 |
Nil |
Upto Rs. 4,00,000 |
Nil |
Rs. 2,50,000 upto Rs. 5,00,000 |
5% |
Rs. 4,00,001 upto Rs. 8,00,000 |
5% |
Rs. 5,00,001 upto Rs. 10,00,000 |
20% |
Rs. 8,00,001 upto Rs. 12,00,000 |
10% |
Above Rs. 10,00,000 |
30% |
Rs. 12,00,001 upto Rs. 16,00,000 |
15% |
Rs. 16,00,001 upto Rs. 24,00,000 |
20% |
||
Rs. 16,00,001 upto Rs. 24,00,000 |
25% |
||
Above Rs. 24,00,000 |
30% |
Under the new tax regime, the rates are uniform for all categories, i.e., individuals, senior citizens and super senior citizens.
The tax rates for senior citizens and super senior citizens under the Old Tax Regime are given below:
For Resident Senior Citizens (60 to 80 years)
Income Tax Slab |
Tax Rate for FY 25-26 (AY 26-27) |
Upto Rs. 3,00,000 |
Nil |
Rs. 3,00,001 upto Rs. 5,00,000 |
5% |
Rs. 5,00,001 upto Rs. 10,00,000 |
20% |
Above Rs. 10,00,000 |
30% |
For Resident Super Senior Citizens (Above 80 years)
Income Tax Slab |
Tax Rate FY 25-26 (AY 26-27) |
Upto Rs. 5,00,000 |
Nil |
Rs. 5,00,001 upto Rs. 10,00,000 |
20% |
Above Rs. 10,00,000 |
30% |
TAX RATES FOR FY 25-26 (AY 26-27)
Income Tax Slab |
Old Tax Regime Tax Rate for AY 26-27 |
Income Tax Slab |
New Tax Regime Tax Rate for AY 26-27 |
Upto Rs. 2,50,000 |
Nil |
Rs. 4,00,000 |
Nil |
Rs. 2,50,001 upto Rs. 5,00,000 |
5% |
Rs. 4,00,001 upto Rs. 8,00,000 |
5% |
Rs. 5,00,001 upto Rs. 10,00,000 |
20% |
Rs. 8,00,001 upto Rs. 12,00,000 |
10% |
Above Rs. 10,00,000 |
30% |
Rs. 12,00,001 upto Rs. 16,00,000 |
15% |
Rs. 16,00,001 upto Rs. 20,00,000 |
20% |
||
Rs. 20,00,001 upto Rs. 24,00,000 |
25% |
||
Above Rs. 24,00,000 |
30% |
The tax rates for the old tax regime for all the categories remain unchanged.
How to Calculate Gross Income from Different Sources of Income?
Income from Business or Profession
Income from all business activities or income generated through a profession must be considered to arrive at the gross income.
Income from Salary
To compute the gross income of salaried individuals, you must consider the elements, such as basic salary, dearness allowance, House Rent Allowance, gratuity, travel and other allowances.
In the new tax regime, exemption is not available for HRA and Leave Travel Allowance. However, the standard deduction is enhanced from Rs. 50000 to Rs. 75000 under the Union Budget 2025 qualifies for exemption.
Income from House Property
Rental income from residential and commercial properties falls under this category. The threshold limit for TDS deduction has been enhanced from Rs. 2.40 lakhs for FY 24-25 to Rs. 6.00 lakhs for FY 25-26.
Income from Capital Gains
Profits earned through gains from the sale of assets, such as property, stocks, mutual funds, gold, etc., fall under this category. The gains are categorised as long-term capital gains and short-term capital gains.
The earlier tax rate was 15% for Short term-capital assets and 20% for Long term capital assets. The rates changed under Union Budget 2024 and remain same for FY 25-26 (AY 26-27). A uniform rate of 12.5% has been fixed for Long term capital assets, 20% for short term capital assets and the indexation benefit has been removed for all assets.
The exemption threshold limit for long-term capital gains from listed equity shares and mutual funds is enhanced from Rs. 1.00 lakh to Rs. 1.25 lakh. Also, the holding period has been changed from 12, 24 and 36 months to 12 and 24 months.
Income from Other Sources
Dividends, interest, royalties, gifts, etc., fall under this category. Several changes were made to the taxation rules under these categories under the Union Budget 24. No modifications were made under the Union Budget 25.
The threshold limit for TDS was increased from Rs. 50,000/- to Rs. 1.00 lakh for senior citizens and from Rs. 40,000 to Rs. 50,000 for others in case of interest income.
The TDS threshold was enhanced from Rs. 5,000/- to Rs. 10,000/- for dividend income.
However, no changes were made to royalties.
Income Tax Calculation
The income tax calculator has simplified the income tax calculation process. Nevertheless, the manual procedure for income tax calculation under both tax regimes is illustrated with examples.
Varun has a basic salary of Rs. 75,000 per month, HRA of 60,000 per month, Special Allowance of Rs. 21,000 per month. He pays a rent of Rs. 50,000 per month. Varun has opted to file tax returns under the new tax regime.
Amit has a basic salary of Rs. 1.00 lakh per month with HRA 45,000 per month, LTA of Rs. 20,000 annually. He has made investments under PPF upto Rs. 1.20 lakhs and pays health insurance premiums of Rs. 40,000 for himself, his spouse, and parents above 60 years. He has to file tax returns under the old tax regime.
How to Calculate Income Tax of a Salaried Employee?
The calculation of income tax for salaried employees requires an elaborate process. You can do this manually yourself or seek help from an expert. You can also opt for an income tax calculator available online to compute the taxes for a salaried employee.
To calculate income tax for salaried employees, you can consider following the steps below.
1 Start with Calculating Your Gross Income
In the space provided, enter your total income along with your allowances in the Income Tax Calculator. Certain allowances are tax-exempt; hence, they are not included in your total salary. The important components of your salary are Leave Travel Allowance (LTA) and House Rent Allowance (HRA). These will be excluded from your gross income subject to certain conditions.
To calculate the HRA, take the lowest value among the following points.
- Actual rent must be 10% of Basic Pay + DA monthly salary
- House Rent Allowance that your employer provides
- 40% of your basic salary, if your workplace is in non-metro cities or 50% of your basic salary, for metro cities
You should mention your income from different sources like capital gains or deposits. The final result will be your gross income. With the online income tax calculator, you can evaluate your gross pay by filling in the details of your income.
2 Compute Your Net Taxable Income
To calculate your taxable income, you have to add all applicable deductions under Chapter VI-A of the Income Tax Act. This includes all deductions from Section 80C to Section 80U. Most of these deductions are available under the old tax regime while the new tax regime only allows a select few of them.
You can also claim a standard deduction of Rs. 50,000 from your annual salary FY 2023-24. Note that this is applicable only to salaried employees.
The points below will provide a brief idea of the tax-saving instruments mentioned in this section.
1. Equity Linked Savings Scheme (ELSS)
2. Life Insurance
3. Public Provident Fund (PPF)
4. Mutual Fund
5. National Pension Savings Scheme (NPS)
6. Unit Linked Insurance Plan (ULIP)
The points below will take you through the sections in the Income Tax Act that allow you to avail different tax deductions.
Section 80CCD (1B)
This section allows both salaried and self-employed citizens of India to avail an additional tax deduction of Rs. 50,000. You can combine the benefits of this section with Section 80C for a total maximum deduction of Rs. 2 lakh/year. Under this section, you can also provide your NPS contribution to calculate the NPS deduction from your taxable amount.
Section 80CCD(1)
If you are contributing towards your retirement in the National Pension Scheme, this deduction is for you. The Section 80 CCD(1) offers a tax deduction for your NPS investment. To have a detailed idea about the deducted amount, you can use the income tax calculator available online.
According to this section, a salaried employee will receive a 10% tax deduction if his/her gross salary is below Rs. 1.5 lakh.
Section 80C
Section 80C allows both HUF and individual citizens of India to claim deductions of up to Rs. 1.5 lakh in a financial year. You can access this benefit by investing in instruments like Life insurance policy, Public Provident Funds, National Savings Certificates, PPF, ELSS, and home loan repayment.
Section 80D
You can receive deductions for the premium amount that you pay towards your health insurance under this section. To calculate the maximum tax deduction amount under Section 80D, you must consider the following points:
- A deduction of Rs. 25,000 is available on medical insurance for self, spouse or children
- An additional deduction of Rs. 25,000 is allowed for health insurance for parents below 60 years
- An additional deduction of Rs. 50,000 is allowed for self and parents belonging to the age group of 60+ years of age
It is important to note that the total tax deduction under this section cannot exceed Rs. 1 lakh. Also, you must make online payments of your premium to avail tax benefits under this section.
Section 80E
Individuals paying interest towards education loans can avail tax deductions under this section. However, a person can enjoy tax deduction under Section 80E for a limited period which is 8 years.
Section 80DD
Under this section, individuals and HUFs can opt for deductions for bearing the medical expenses of their dependent or disabled family members. However, you can avail a tax benefit up to Rs. 1.25 lakh depending on the person's disability.
3 Select the Tax Slab Based on Your Net Income
The tax slabs for FY 2023-24 have remained the same for the old regime. However, the 2023 Budget has made changes to the income tax slab under the new regime. Under it, the basic exemption limit has been increased to Rs. 3 lakh and the rebate under Section 87A has been doubled.
Once you are done subtracting your deductions from your annual income, you can evaluate your net taxable income under either of these regimes. Now, assess the result with the existing tax slab rates. This will let you know the income tax category you belong to.
You can get help from online income tax calculators to know your correct tax slab rate.
4 Calculate the Tax
Old Tax Regime
Amit has opted to file IT returns under the old tax regime. The details provided are:
Basic Salary: Rs. 12.00 lakhs P.A.
HRA: Rs. 5,40,000 P.A.
LTA: Rs. 20,000 P.A.
Deductions under 80C: PPF Rs. 1.20 lakhs
Deductions under 80D: Rs. 40,000 (max eligible for him is Rs. 25000 + Rs. 50000).
The gross income under the old tax regime is calculated as follows:
Nature of Income |
Amount |
Exemptions/Deductions |
Taxable Income |
Basic Salary |
12,00,000 |
- |
12,00,000 |
HRA |
5,40,000 |
- |
5,40,000 |
LTA |
20,000 |
20000 (bills produced) |
- |
Standard Deduction |
- |
50000 |
Less: 50,000 |
Gross Total Income From Salary |
16,90,000 (after standard deduction) |
Deductions under 80C = Rs. 1.20 lakhs
Deductions under 80D = Rs. 40,000
Taxable Income =16,90,000-1,60,000 = 15,30,000
Tax payable as per the slab rates for FY 25-26
Up to Rs. 2,50,000 - Nil
Rs. 2,50,000 to Rs. 5,00,000 - 5% above Rs. 2,50,000= Rs.12,500
Rs. 5,00,000 to Rs. 10,00,000 – 12,500 + 20% above Rs. 5,00,000 = 12,500 + 1,00,000 = Rs. 1,12,500
Above Rs. 10,00,000 = 1,12,500 + 30% above Rs.10,00,000 = 1,12,500 + 1,59,000 = 2,71,500
Cess at 4% = 10,860
Total tax payable = 2,71,500 + 10,860 = 2,82,360
(Surcharge applies to annual salary over Rs. 50.00 lakhs)
New Tax Regime
Varun has opted to file taxes under the new tax regime. The details provided are:
Basic Salary: Rs. 9.00 lakhs P.A.
HRA: Rs. 7.20 lakhs P.A.
Special Allowance: Rs. 2.52 lakhs P.A.
Rent: Rs. 6.00 lakhs P.A.
Nature of Income |
Amount |
Exemptions/Deductions |
Total Taxable Income |
Basic Salary |
Rs. 9,00,000 |
Rs. 9,00,000 |
|
HRA |
Rs. 7,20,000 |
Rs. 7,20,000 |
|
Special Allowance |
Rs. 2,52,000 |
Rs. 2,52,000 |
|
Standard Deduction |
Rs. 75,000 |
Less; 75,000 |
|
Total Gross Income |
Rs.17,97,000 |
Taxable Income = 17,97,000
Tax payable as per slab rates
Upto Rs. 4.00 lakhs: Nil
Rs. 4.00 lakhs to Rs. 8.00 lakhs: 5% above Rs. 4.00 lakhs: Rs. 20,000
Rs. 8.00 lakhs to Rs. 12.00 lakhs: 20,000 + 10% above Rs. 8.00 lakhs = 20,000 + 40,000 = 60,000
Rs. 12.00 lakhs to Rs. 16.00 lakhs: 60,000 + 15% above Rs. 12.00 lakhs = 60,000 + 60,000 =1,20,000
Above Rs. 16.00 lakhs: 1,20,000 + 20% above Rs. 16,00,000 = 1,20,000 + 39,400 = 1,59,400
Cess at 4% = Rs. 6,376
Total tax payable = 1,59,400 + Rs. 6,376 = Rs. 1,65,776
Advantages of Using an Income Tax Calculator
Managing taxes effectively is essential for financial stability and planning. An income tax calculator is a digital tool designed to simplify tax calculations, making the process more efficient and accurate. Here are the key advantages of using an online income tax calculator:
1. Accuracy
The accuracy of an income tax calculator is one of its main advantages. A number of factors, such as income sources, exemptions, deductions, and applicable tax rates, are taken into account while calculating taxes. Errors are more likely to occur when computations are done manually, which could result in an underpayment or overpayment of taxes. Using the most recent tax slabs and regulations, an income tax calculator ensures precise results by automating the procedure. This dependability is particularly important when filing returns because it reduces the possibility of fines for inaccurate tax reporting.
2. Fast and Easy
Calculating taxes can take a lot of time, especially for people who are not familiar with the tax laws. The income tax calculator online provides immediate results, which expedites the procedure. The application calculates the tax liability in a matter of seconds after users enter their income information, any available deductions, and other pertinent data. Taxpayers can concentrate on other crucial financial duties because this speed not only saves time but also lessens the stress that comes with laborious computations.
3. User-Friendly
Individuals with little technical or financial knowledge can use modern income tax calculators because they are made to be user-friendly. To guarantee use, they frequently have user-friendly interfaces, unambiguous instructions, and step-by-step guides. The majority of tools may be found online and do not require any further software downloads. To make them even more accessible, many now provide smartphone compatibility and language choices. This simplicity makes tax calculation a hassle-free experience for users from various backgrounds.
4. Improved Money Management and Tax Planning
An income tax calculator is a useful tool for financial planning in addition to being a tool for tax computation. These calculators assist people in estimating their post-tax income by offering information about their tax obligations. Planning investments and developing efficient budgets require this knowledge. Furthermore, several calculators provide recommendations for ways to reduce taxes, like deductions under Section 80C or 80D of the Indian Income Tax Act. This enables users to optimise their finances and reduce tax burdens legally.
5. Data Privacy
The majority of trustworthy and online income tax calculators put user privacy first in an era where data security is a top priority. These tools usually do not save sensitive data and perform computations locally or on secure servers. This guarantees that consumers can confidently compute their taxes without being concerned about the misuse of their financial information. To guarantee data confidentiality, it is best to choose income tax calculators from reliable platforms with strong privacy policies.
How to Calculate Total Income Tax Liability with the Calculator for New and Old Regimes?
Follow the steps given below to calculate the tax liability with the income tax calculator online for the old and the new tax regimes:
For the Old Tax Regime
Access a reliable income tax calculator
Select the financial year for which you have to file taxes.
Choose your age from the dropdown.
Provide income details, such as income from salary, interest, rental income, interest on home loan for self-occupied or rented, and other income.
Fill in the details of deductions under 80C, 80D, 80EEA, 80CCD(2), 80TTA, 80G, 80CCD, and other deductions. You should also mention the applicable rebate under 87A.
Click on the calculate button and view the results.
For the New Tax Regime
Log in to a reliable income tax calculator.
Select the year for calculating tax.
Select your age from the dropdown menu.
Provide your income details.
Enter the applicable deductions, i.e., the standard deduction and deduction under 80CCD(2). The rebate under Section 87A also has to be considered.
Hit the calculate button. The result is displayed on the screen.
IT returns for FY 2025-26 (AY 26-27) should be filed before 31st July 2026. Interest and penalty as mentioned below, are levied for late filing.
Interest under Section 234A at 1% per month or part thereof on the tax payable from the due date until the date of filing will be levied for filing after the due date.
Under Section 234F, a penalty of Rs. 5000 will be collected. However, the penalty will be Rs. 1000 for individuals with a total annual income below Rs. 5.00 lakhs.
Income Tax Calculator Made Easy for Tax Filing
The income tax calculator simplifies the tax filing process. Irrespective of whether you are an individual, a businessman, a professional, or a freelancer, you can use this digital tool to assess your tax liability and prepare for filing taxes at the click of a button.
...Read More
Three sections are available, i.e., the basic details, income details, and deductions. You have to provide relevant data under each section. All the deductions such as Standard deductions, Section 80C, 80D, 80CCD, 80E, 80G, 80CCD(2), etc., are to be entered.
...Read More
If you choose the old tax regime, input data for all the applicable deductions. For the new tax regime, enter only the standard deduction and deduction under Section 80CCD(2).
...Read More
The tax payable is evaluated within seconds.
...Read More
Calculate tax payable under both regimes and choose the more beneficial one.
...Read More
Compute the rebate available under Section 87A and deduct it from the tax payable to arrive at the net tax liability.
...Read More
Benefits of Filing Income Tax Online
Filing income tax online is a simple and convenient way to fulfill the legal obligation of paying eligible taxes. Filing IT returns is compulsory if your income is beyond the exemption limit. The benefits of filing income tax online are:
It is quick and convenient. You can file the returns at any time and from anywhere.
With the provision to calculate your tax liability in advance, you can allocate your investments prudently and reduce the overall tax bill.
No laborious paperwork is required.
With e-verification, the process is seamless.
The easy and seamless online process enables you to file the taxes within the due date. You can, therefore, avoid interest and penalty levied under Section 234A and 234F, respectively, for late filing.
Reliable portals like incometax.gov.in use encrypted systems to protect your data.
Soon after the submission, an acknowledgement is issued.
If you are eligible for refunds, the online process ensures quick processing and a refund credited to your bank account.
Eligibility Criteria to File Income Tax
The individuals who are eligible to file income tax returns in India include:
Hindu Undivided Family (HUF)
Associations of Persons (AoP)
Resident citizens
Local authorities
Corporate firms
Companies
Body of Individuals (BoI)
Artificial Juridical Persons
Charitable and Religious Trusts
Budget 2025 Updates on Income Tax
Several significant changes were brought in the Union Budget 2025. They are:
The income tax rebate was enhanced from Rs. 25000 in the previous financial year to Rs. 60000. This means you have nil tax liability up to an income of Rs. 12.00 lakhs.
...Read More
The TDS threshold limit for rental income was enhanced to Rs. 6.00 lakhs per annum from Rs. 2.40 lakhs as in the previous financial year.
...Read More
The TDS threshold limit for interest income for senior citizens is enhanced to Rs 1.00 lakh from Rs 50000 for senior citizens.
...Read More
The threshold limit for TCS for remittances under the RBI’s Liberalised Remittance Scheme is enhanced from Rs. 7.00 lakhs to Rs. 10.00 lakhs.
...Read More
Incomes That Are Exempt from Income Tax Under the New Tax Regime
Income tax exemptions for salaried individuals are:
Standard Deduction: Rs. 50,000
House Rent Allowance for rented accommodation: Exemption under Section 10(13A) up to actual rent paid minus 10% of salary or the actual HRA provided by the employer. Or 40%(if other than metro city/50%(if metro city) of Salary
Leave Travel Allowance: Expenses incurred for travel within India under Section 10(5)
Professional Tax: As per applicable State Laws
Interest on Home Loans: Up to Rs. 2.00 lakhs on interest paid for home loans under Section 24(b). This exemption applies only to self-occupied properties.
Deductions under Section 80C of the Income Tax Act 1961 for investments in the following up to Rs. 1.50 lakhs:
- Public Provident Fund (PPF)
- Employees Provident Fund (EPF)
- Life Insurance Premiums
- Equity Linked Savings Scheme (ELSS)
- Principal repayment of Home Loans
- Tax Saver Fixed Deposit
Dedication under Section 80(D) for Health Insurance Premiums
- Upto Rs. 25000 for self and family
- Upto Rs. 25000 for parents below 60 years or Rs. 50000 for parents above 60 years.
Deductions under Section 80E for interest paid on education loans. This exemption is available for only 8 years.
Deductions under Section 80CCD (1B): Rs. 50000 for NPS contributions as an additional benefit.
Deductions under Section 80G for donations made to charitable institutions are subject to specific limits.
NOTE: These deductions apply only to the old tax regime. The new tax regime has lower tax rates and allows only deductions for employers’ contributions to NPS and the standard deduction.
Depending on the overall tax liability, individuals can choose the beneficial one between the old and new tax regimes.
Incomes That Are Exempt from Income Tax Under the New Old Regime
Many deductions applicable to the old tax regime are not available for the new tax regime. However, some incomes are exempt from tax under the new tax regime. They are:
Standard Deduction: Enhanced from Rs. 50000 to Rs. 75000
Deduction under Family Pension: Enhanced from Rs. 15000 to Rs. 25000
Deduction under Section 80CCD(2): Employer’s contribution to NPS up to 14%
Employees Provident Fund: Interest earned on account balance for annual contributions up to Rs. 2.5 lakhs
Gratuity Payout at the time of retirement : Government employee Fully Exempted. For Other Employee maximum Up to Rs. 20.00 lakhs
Other Exemptions
Life Insurance Plans' maturity proceeds under Section 10(10D) Subjected to conditions.
Gift up to Rs. 50,000.
Employer allowances for conducting official duties include travel expenses, food coupons, and a tour allowance.
FAQs on Income Tax Calculator
1 When can you file your income tax returns?
Individuals and non-audited taxpayers should file income tax returns before 31st July of the relevant financial year. Businesses requiring auditing must file returns before 31st October of the relevant financial year.
2 What is the difference between an exemption and a deduction?
Income tax exemptions apply to specific income groups and make them tax-free. Deductions reduce taxable income by permitting deductions of certain investments or expenses from your gross income.
3 What are the major tax provisions introduced in the budget for Individual taxation?
The major tax provisions introduced in the budget for individual taxation are:
Rebate under Section 87A increased from Rs. 25,000 to Rs. 60,000 for the new tax regime. The rebate remains at Rs. 12,500 for the old tax regime.
The tax-free income limit has been enhanced from Rs. 7.00 lakhs to Rs. 12.00 lakhs under the new tax regime.
The threshold for TDS on interest earned by senior citizens has been enhanced from Rs. 50,000 to Rs. 1.00 lakh and from Rs. 40,000 to Rs. 50,000 for others.
The threshold for TDS on rental income is enhanced from Rs. 2.40 lakhs to Rs. 6.00 lakhs per annum.
4 Which deductions/exemptions are not available under the new tax regime?
The deductions and exemptions not available under the new tax regime are:
House Rent Allowance (HRA)
Leave Travel Allowance (LTA)
Professional Tax on salaries
Children Education Allowance
Interest on home loan under Section 24
Deductions under Section 80C, 80D, 80E, Section 80 TTA/TTB, etc., except Section 80 CCD (2),
5 Is the Section 10(10D) exemption available under the new tax regime?
Yes. Exemption is available for life insurance payouts received under Section 10(10D) in the new tax regime.
6 How will the new tax regime work for an individual?
The new tax regime is the default option for salaried individuals and pensioners unless they opt for the old tax regime. The tax slabs are lower, but most of the exemptions and deductions available under the old tax regime are not available under the new tax regime, except for the standard deduction and deductions under Section 80 CCD(2). The standard deduction is enhanced from Rs. 50,000 to Rs. 75,000, and the tax-free income limit is enhanced from Rs. 7.00 lakhs to Rs. 12.00 lakhs under the new tax regime. The rebate under Section 87A is enhanced from Rs. 12,500 to Rs. 60,000.
7 Is the new tax regime optional? Can I change the option once selected for any financial year?
An individual with a non-business income can switch between the old and the new tax regime every financial year. However, individuals with business income are given one chance to revert to the new tax regime. After that, they cannot switch back to the old tax regime.
8 What details do I need to provide while e-filing my ITR?
When e-filing your ITR, you must provide basic details such as the financial year for which the returns are filed, age, income, and deduction details. Income from all sources must be mentioned in the appropriate columns, and similarly, eligible deductions must be provided in the relevant columns.
9 Does everybody have to file their income tax returns?
Any person whose income exceeds the exemption limit or the tax-free income limit has to file income tax returns. The exemption limit under the old tax regime for FY 25-26 AY(26-27) is Rs. 2.50 lakhs, and the exemption limit under the new tax regime for FY 25-26 (AY 26-27) is Rs. 4.00 lakhs. The tax-free income limit under the new tax regime for FY 25-26 (AY 26-27) is Rs. 12.00 lakhs after considering rebate under Section 87A.
10 Does the income tax calculator calculate TDS?
No. The Income tax calculator does not calculate TDS.
11 How can I calculate my income tax liability online?
To calculate your income tax liability online:
Access the Income Tax Department’s online income tax calculator.
Select the Financial Year for which the tax is to be filed.
Choose your age from the dropdown.
Select the old or the new tax regime.
Input the income from all sources, i.e., salary, rent, interest, etc.
Provide the details of deductions and exemptions if you have selected the old tax regime.
Click on the calculate button, and the tax liability is quickly calculated and displayed on the screen.
12 Is it compulsory to file income tax returns?
It is not compulsory to file income tax returns if your income is within the basic exemption limit . However, even if not mandatory, filing returns will help claim refunds, apply for loans, visa processing, and maintain financial records.
13 How can I calculate income tax online?
Follow the step-by-step process to calculate income tax online:
Access a credible online income tax calculator.
Select the financial year.
Choose the age under the dropdown.
Select the tax regime.
Provide details of income from salary, rent, interest, etc.
Mention the eligible deductions and exemptions if you have chosen the old tax regime.
Otherwise, fill in the standard deductions and 80 CCD(2) column only.
Click on the calculate button, and the tax liability is available.
14 How much tax should I pay on my salary in the new regime?
To arrive at the tax payable on your salary in the new regime for FY 25-26 (AY 26-27), follow the slab given below:
Income Tax Slab |
Tax Rates |
Up to Rs. 4 |
Nil |
Rs. 4.00 lakhs to Rs. 8.00 lakhs |
5% |
Rs. 8.00 lakhs to Rs. 12 lakhs |
10% |
Rs. 12.00 lakhs to Rs. 16.00 lakhs |
15% |
Rs. 16.00 lakhs to Rs. 20 lakhs |
20% |
Rs. 20.00 lakhs to Rs. 24.00 lakhs |
25% |
Above Rs. 24.00 lakhs |
30% |
Apply eligible Standard Deduction: Rs. 75,000and rebate under Section 87A, i.e., Rs. 60,000.
If the income is less than or equal to Rs. 12.00 lakhs, with the rebate of Rs. 60,000, the net tax payable amounts to zero.
15 How do I calculate tax on salary?
To calculate tax on your salary, apply the following formula:
Taxable Income = Gross salary -deductions
Income Tax = (Taxable Income x applicable tax rate) - tax rebate (If applicable)+tax surcharged (if applicable) + Cess@4%
16 Can I claim the income tax calculator facility on the Income Tax Department’s website?
Yes. You can claim the income tax calculator facility on the Income Tax Department’s website free of cost.
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- Tax benefits & exemptions are subject to conditions of the Income Tax Act, 1961 and its provisions. Tax Laws are subject to change from time to time. Customer is requested to seek tax advice from his Chartered Accountant or personal tax advisor with respect to his personal tax liabilities under the Income-tax law.
- If the policyholder has exercised the option to change premium payment term, Total Premiums Paid will include premiums paid only from the date of converting to Limited Pay
- In-built Terminal Illness cover under Life & Life plus plan options. In-built Accidental Death cover under Life Plus option. Optional benefit of Waiver of Premium on Total and Permanent Disability or diagnosis of Critical Illness.
- Guaranteed Income: This option offers a guaranteed regular income for a fixed term of 10 or 12 years.
- For Single premium, the special addition is 1% of the Single premium at inception only
#Tax benefits & exemptions are subject to the conditions of the Income Tax Act, 1961 and its provisions.
#Tax Laws are subject to change from time to time.
#Customer is requested to seek tax advice from his Chartered Accountant or personal tax advisor with respect to his personal tax liabilities under the Income-tax law.
ARN - ED/05/25/23785