Use our income tax calculator for FY 25-26 to estimate your tax easily. Compare old vs new tax regimes, claim deductions, explore slab rates, and save more with real-life examples, tips, and a free Excel download.
Are you wondering how much tax you'll pay for the Financial Year 2025-26? With significant changes in tax slabs, deductions, and rebate limits introduced in Budget 2025, it's more important than ever to understand how your income is taxed—whether you opt for the new regime or stick with the old one.
This guide offers a simple yet detailed breakdown of all tax changes for FY 25-26, a powerful income tax calculator, and actionable examples to help you make the right decision. Whether you're a salaried professional, freelancer, or pensioner, this article will guide you step-by-step through tax calculations, deductions, rebates, and more.
Old vs New Tax Regime Calculator
| Head | Details/ Amt. |
|---|---|
| Gross Income | |
| Exemptions u/s 10 A (HRA etc.) | |
| Professional Tax | |
| Net Income under Salaries | 0.00 |
| Standard Deduction (Auto Applied) | 50000 |
| Deductions u/s 80 C (PF, PPF, Ins, ELSS, NPS: Max Rs.150000) | |
| Deductions u/s 80 CCD (NPS: Max Rs. 50000/-) | |
| Deductions u/s 80 D (Health Insurance: Max Rs. 35000/- ) | |
| Deductions u/s 80 G (Eligible Donations) | |
| Deductions u/s 80 E (Education Loan Interest) | |
| Deductions u/s 80 TTA (FD/Post Office Interest: Max Rs. 40000/-) | |
| Tax Benefit u/s 24 (Home Loan Interest Paid: Max Rs. 200000/-) | |
| Total Deductions/Benefits | 0.00 |
What’s New in FY 25-26 Income Tax Regime?
Budget 2025 has brought several notable updates to the personal income tax regime. For individuals opting for the new tax regime, the government has provided additional relief and simplified slab structures to encourage more taxpayers to switch from the old regime.
Here’s a snapshot of the latest slab structure for FY 2025-26 under the new regime:
| Income Slab (₹) | Tax Rate (New Regime) |
|---|---|
| Up to 3,00,000 | 0% |
| 3,00,001 – 6,00,000 | 5% |
| 6,00,001 – 9,00,000 | 10% |
| 9,00,001 – 12,00,000 | 15% |
| 12,00,001 – 15,00,000 | 20% |
| Above 15,00,000 | 30% |
Key Updates Introduced in Budget 2025
- Rebate under Section 87A: Now available up to ₹60,000 for individuals with taxable income up to ₹12,00,000 under the new regime.
- Standard Deduction: Retained and increased to ₹75,000 for salaried and pensioners, even under the new regime.
- New Tax Slab Addition: A special 25% tax slab has been introduced for incomes between ₹20,00,001 and ₹24,00,000.
- Surcharge Adjustment: Surcharge for income above ₹5 crore has been reduced from 37% to 25%, lowering the effective tax rate for high-income individuals.
These changes aim to boost middle-class disposable income, simplify tax filing, and shift more taxpayers toward the new regime. The official Budget 2025 document confirms these updates.
How to Use Our Income Tax Calculator
We’ve developed a powerful yet user-friendly income tax calculator for FY 25-26 that helps you instantly estimate your tax liability under both regimes. Here's how you can make the most of it:
Step-by-Step Guide:
- Enter Annual Gross Income: Include all sources – salary, business, rental, etc.
- Select Regime: Choose between Old or New regime.
- Add Deductions (Old Regime): Enter eligible deductions like 80C, 80D, HRA, LTA, etc.
- View Comparison: Instantly view side-by-side tax payable under both regimes.
The calculator follows the latest slab rules and rebate changes as per the Budget 2025. It's built with updates aligned with the Income Tax Department's official framework.
Why the Calculator is Useful
Many salaried taxpayers are confused about whether to continue with the old regime or opt into the new one. A minor difference in your deduction claims can tilt the decision either way. Here’s how our calculator makes life easier:
- Saves Time: No need to understand complex calculations.
- Visual Comparison: Get clarity in one glance.
- Accurate: Based on current fiscal laws and rebate rules.
- Mobile-Friendly: Designed for ease on all devices.
Our tool is ideal for financial year 2025-26 planning, investment declarations, and optimizing salary structure to reduce tax liability.
Old vs New Tax Regime – Which Should You Choose?
Choosing between the old and new income tax regime can significantly impact your net take-home salary or total tax outgo. While the new regime offers lower tax rates, it eliminates most exemptions and deductions. The old regime retains all standard deductions but applies higher rates.
Here’s a direct comparison to help evaluate which suits your situation best:
| Criteria | Old Regime | New Regime |
|---|---|---|
| Income Tax Rates | Higher | Lower |
| Deductions Allowed | Yes (80C, 80D, HRA, etc.) | Limited (only standard deduction, NPS, etc.) |
| Best For | Those claiming multiple exemptions | Those with minimal deductions |
| Standard Deduction | ₹75,000 (from FY 25-26) | ₹75,000 (newly allowed in FY 25-26) |
| Section 87A Rebate | Up to ₹12,500 (for income ≤ ₹5L) | Up to ₹60,000 (for income ≤ ₹12L) |
| Slab Complexity | More complex | Simplified |
When Old Regime Makes More Sense
If you're availing multiple deductions such as:
- ₹1.5 lakh under Section 80C (PF, ELSS, LIC, etc.)
- ₹25,000–₹50,000 under Section 80D (Health insurance)
- HRA exemption for metro city rentals
- Education loan interest under Section 80E
…then the old regime may still work out cheaper.
Real-Life Examples: Who Benefits Under Which Regime?
Let’s compare actual tax payable under both regimes for different income levels. These examples assume the person is salaried and eligible for common deductions (under the old regime).
Example 1: Annual Income ₹9,00,000
Old Regime (assuming ₹2.5L total deductions):
- Taxable Income: ₹6.5L → Tax: ₹42,500
New Regime: - Taxable Income: ₹9L → Tax: ₹30,000 (after standard deduction and 87A rebate)
➡ New regime is better here.
Example 2: Annual Income ₹15,00,000
Old Regime (₹3.5L deductions incl. HRA, 80C, 80D):
- Taxable Income: ₹11.5L → Tax: ₹1,57,500
New Regime: - Taxable Income: ₹14.25L → Tax: ₹1,62,500
➡ Old regime wins with smart deductions.
You can use the official comparison tool by NSDL for further scenario-specific inputs.
Common Deductions Available (Old Regime Only)
One of the key benefits of the old regime is the ability to lower your taxable income through a range of deductions. Here’s a brief of the most used:
| Section | Deduction Type | Limit (₹) |
|---|---|---|
| 80C | LIC, ELSS, PPF, EPF, tuition fees, etc. | 1,50,000 |
| 80D | Health Insurance (self + family + parents) | Up to 1,00,000 |
| 24(b) | Interest on home loan | 2,00,000 (self-occupied) |
| HRA | House Rent Allowance | As per salary & rent |
| 80E | Education Loan Interest | No upper limit |
| Standard Deduction | Flat deduction for salaried individuals | ₹75,000 (FY 25-26) |
These deductions often make a huge difference, especially for those in metro cities with high rent and insurance premiums.
Example Calculations for Different Income Levels
Understanding how your tax is calculated in practical terms can help you make better financial decisions. Below are illustrative examples of how different income groups are affected under the old and new regimes for FY 25-26, especially considering the updated rebate under Section 87A and the enhanced standard deduction.
Example 1: ₹7,50,000 Annual Income
Old Regime
- Standard Deduction: ₹75,000
- 80C Investments: ₹1,50,000
- Health Insurance (80D): ₹25,000
- Net Taxable Income: ₹5,00,000
- Tax Payable: ₹0 (after ₹12,500 rebate under 87A)
New Regime
- Standard Deduction: ₹75,000
- No other deductions allowed
- Net Taxable Income: ₹6,75,000
- Tax Slab: ₹15,000
- Rebate under Section 87A: ₹15,000
- Tax Payable: ₹0
Result: Both regimes offer zero tax, but the old regime allows more room for savings through investments.
Example 2: ₹12,00,000 Annual Income
| Particulars | Old Regime | New Regime |
|---|---|---|
| Standard Deduction | ₹75,000 | ₹75,000 |
| 80C (PF/ELSS/LIC etc.) | ₹1,50,000 | Not applicable |
| 80D (Health Insurance) | ₹25,000 | Not applicable |
| Taxable Income | ₹9,50,000 | ₹11,25,000 |
| Tax Before Rebate | ₹1,02,500 | ₹1,05,000 |
| 87A Rebate | ₹0 | ₹60,000 |
| Final Tax Payable | ₹1,02,500 | ₹45,000 |
Winner: New regime offers lower tax for this bracket, but only if investments are minimal.
Downloadable Resources for Tax Planning
To simplify your tax planning, we’ve also made available helpful downloadable resources:
- Income Tax Calculator (Excel Format) – Enter your salary and deductions to instantly compare regimes.
- Section-wise Deduction Tracker – Helps salaried employees map their savings and eligible limits.
These can help you prepare for investment declarations or finalize your tax-saving instruments before March-end.
For in-depth understanding of deduction claims and IT return processes, refer to this comprehensive guide by trusted financial professionals.
Filing Your ITR for FY 25-26
Once you’ve calculated your expected tax liability using the income tax calculator for FY 25-26, the next logical step is to file your Income Tax Return (ITR). The window usually opens in April and extends until July 31st for salaried individuals.
To file your ITR:
- Visit the e-Filing Portal
- Choose the appropriate ITR form (ITR-1 for most salaried taxpayers)
- Enter your income, deductions, and TDS details
- Verify and submit electronically via Aadhaar OTP or digital signature
E-verification is mandatory to complete your return filing. Also, if you’re due for a refund, e-verification speeds up the process.
Tips to Save More Tax in FY 25-26
While calculating your taxes is important, strategic planning can significantly reduce your liability, especially under the old regime. Even with the simplified new regime, small financial choices can lead to big benefits over time.
1. Optimize Salary Structure
Speak with your HR department to ensure your salary components are tax-efficient. Include:
- House Rent Allowance (HRA) – If you live in a rented home, claim deductions on rent paid.
- Leave Travel Allowance (LTA) – Exempt twice in four years if properly claimed.
- Food Coupons or Sodexo – Non-taxable up to a certain monthly threshold.
- NPS Employer Contribution – Up to 10% of salary under Section 80CCD(2) is tax-deductible.
2. Invest Smartly Under Section 80C
If you're under the old regime, exhaust your ₹1.5 lakh limit under Section 80C. Popular and effective options include:
- Public Provident Fund (PPF)
- Equity Linked Saving Schemes (ELSS)
- Life Insurance Premiums
- 5-year Tax Saving Fixed Deposits
For comparison of risk vs. returns, refer to this updated list of 80C investments.
3. Don’t Miss Section 80D & Others
- Health Insurance: Deduction of up to ₹25,000 for self and ₹50,000 for senior citizen parents.
- Education Loan Interest (80E): No cap on deduction if the loan is for higher studies.
- Home Loan Interest (24b): ₹2 lakh interest deduction for self-occupied property.
If you’ve recently taken a home loan or are planning one, it's worth understanding the breakdown of benefits available across principal and interest payments.
Important Filing Deadlines to Remember
Missing deadlines can result in penalties and interest, even if your tax is already paid. Here are key dates for salaried taxpayers:
| Event | Due Date (FY 2025-26) |
|---|---|
| Last date for investment proof submission (employer) | January 31, 2026 |
| Deadline to file ITR (without audit) | July 31, 2026 |
| ITR filing with audit (if applicable) | October 31, 2026 |
| Last date for revised return filing | December 31, 2026 |
Stay updated with deadline changes or extensions on the official tax calendar.
Key Takeaways from Budget 2025 (Recap)
Let’s quickly recap the most significant announcements affecting taxpayers in this assessment year:
- Standard deduction increased to ₹75,000 for both regimes
- Section 87A rebate raised to ₹60,000 (new regime only)
- 25% tax slab introduced for income between ₹20L to ₹24L
- Surcharge rationalization to reduce effective rates for HNIs
- Old regime retained – not sunset, giving taxpayers flexibility
All these measures signal the government’s intention to gradually shift individuals towards a simplified tax structure while still rewarding investments and savings for those who opt into the older system.
Questions on Income Tax Calculator FY 25-26
1. Is the new tax regime mandatory from FY 25-26?
No, it's optional. Taxpayers can still choose between the old and new tax regimes each financial year while filing their return.
2. Can I switch tax regimes every year?
Yes. Salaried individuals can switch regimes every year when filing their ITR. Business owners, however, have stricter switching rules and must follow Section 115BAC provisions.
3. How much income is tax-free in FY 25-26?
Under the new regime, individuals earning up to ₹12,00,000 can avail a full rebate of ₹60,000 under Section 87A, making their effective tax payable zero.
4. Are deductions like 80C, 80D, and HRA available under the new regime?
Most deductions are not available under the new regime. Only a few like standard deduction, NPS (employer contribution), and section 80CCD(2) are allowed.
5. Can I use the income tax calculator for planning investments?
Yes, the calculator is designed to help you estimate tax liability and make informed choices about deductions and tax-saving investments before the end of the financial year.
Download the Calculator + Free Excel Tracker
To simplify your annual tax planning, we’ve included:
- Interactive online income tax calculator FY 25-26 embedded on-page
- Downloadable Excel sheet to simulate multiple income scenarios
- A deduction tracker template to record 80C/80D/HRA claims
These tools will help you compare tax regimes, validate savings declarations, and estimate refunds before filing.
Final Thoughts
Choosing the right tax regime is no longer just about slabs. It's about optimizing your income, deductions, and benefits in a way that aligns with your financial habits. While the new regime offers transparency and lower rates, the old regime continues to reward disciplined savers and investors.
Using a reliable income tax calculator for FY 25-26 can help you plan, compare, and save without second-guessing. With updated rebates, standard deductions, and clear income slabs, taxpayers now have more control than ever in customizing their tax outcome.
FAQ
How do I calculate income tax on my salary in India?
You can calculate income tax by computing your gross salary, subtracting exemptions and deductions, and applying the correct slab rates.
What is the standard deduction for salaried employees in FY 2025–26?
The standard deduction for salaried individuals is ₹75,000 for FY 2025–26 under both old and new tax regimes.
Which is better: old or new tax regime?
The old regime is better if you claim deductions like 80C, HRA, etc. The new regime is simpler and beneficial if you don’t use many deductions.
Can I switch between old and new tax regimes every year?
Yes, salaried individuals can switch between regimes every financial year while filing their income tax return.
Is HRA exemption available in the new regime?
No, HRA and other common exemptions like LTA and 80C are not available under the new regime, except the standard deduction.
What is the latest rebate under Section 87A for FY 2025–26?
Under the new regime, individuals with income up to ₹12 lakh can now claim a rebate of up to ₹25,000 as per Budget 2025.
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