Income Tax Calculator

Income

Deductions

HRA Exemption

Tax Comparison

ParticularsOld RegimeNew Regime
Gross Total Income
Total Deductions
Taxable Income
Total Tax Payable

A Surprising Story: The Deduction Dilemma

Priya, a young IT professional, had always opted for the Old Tax Regime. She meticulously invested in 80C instruments and paid her health insurance premiums. When the New Regime was introduced with lower tax rates but no deductions, she dismissed it. One day, she used a calculator like this one. She entered all her income and deduction details. The calculator presented a side-by-side comparison.

To her utter surprise, the New Regime resulted in a lower tax liability for her, even without any of her usual deductions! She realized that the significantly lower tax slabs in the New Regime outweighed the benefits she was getting from her deductions. This simple calculation saved her thousands in taxes for the year. It taught her a valuable lesson: never assume; always calculate. Tax planning isn't just about saving, but about choosing the smartest path available.

What is an Income Tax Calculator?

An income tax calculator is a tool that helps individuals estimate their tax liability for a financial year. By entering details about your income and potential deductions, the calculator uses the applicable tax slabs to compute the amount of tax you need to pay to the government.

Budget 2025 Updates on Income Tax

The latest budget has made the New Tax Regime the default option for taxpayers. The basic exemption limit under the New Regime has been increased, and the tax slabs have been revised to provide more relief to the middle class. A standard deduction of ₹50,000 has also been introduced in the New Regime for salaried individuals.

Revised Income Tax Slabs Under New Regime for FY 2025-2026 (AY 2026-2027)

  • Up to ₹3,00,000: No tax
  • ₹3,00,001 to ₹6,00,000: 5%
  • ₹6,00,001 to ₹9,00,000: 10%
  • ₹9,00,001 to ₹12,00,000: 15%
  • ₹12,00,001 to ₹15,00,000: 20%
  • Above ₹15,00,000: 30%

FAQs

What is the difference between the Old and New Tax Regime?

The Old Tax Regime allows you to claim various deductions and exemptions (like 80C, 80D, HRA). The New Tax Regime offers lower, simplified tax slabs but does not allow most of the common deductions.

Which tax regime should I choose?

It depends on your financial situation. If you make significant investments in tax-saving instruments (like PPF, ELSS, insurance) and have a home loan, the Old Regime might be better. If you have fewer deductions, the lower rates of the New Regime could be more beneficial. The best way to know is to use this calculator.

What is a Standard Deduction?

It is a flat deduction of ₹50,000 that salaried individuals can claim from their gross salary, reducing their taxable income. This is available in both the Old Regime and the updated New Regime (from FY 2023-24 onwards).

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