What is Income Tax?
The Income Tax Calculator helps you estimate the exact tax you owe to the Indian government based on your annual income under the New Tax Regime for FY 2025-26 (Assessment Year 2026-27). Whether you are a salaried employee, freelancer, or business owner, knowing your tax liability in advance helps you plan your finances, maximize savings, and avoid surprises during ITR filing season.
The New Tax Regime, introduced in Budget 2020 and significantly revised in Budget 2023 and 2025, has become the default regime for all taxpayers. It offers lower tax rates across broader slabs but removes most deductions and exemptions that were available under the Old Regime (like HRA, LTA, 80C, 80D, and home loan interest under Section 24).
The biggest change in FY 2025-26 is the increased standard deduction of ₹75,000 (up from ₹50,000) and the Section 87A rebate that makes income up to ₹12,00,000 effectively tax-free. This means a salaried person earning up to ₹12,75,000 per year (₹12L taxable + ₹75K standard deduction) pays ZERO income tax.
Additionally, salaried employees can still claim NPS contribution under Section 80CCD(1B) for an additional ₹50,000 deduction even in the New Regime, plus employer NPS contribution under Section 80CCD(2) up to 14% of basic salary.
Not sure whether the Old or New Regime is better for you? As a rule of thumb: if your total deductions (80C + HRA + home loan interest + 80D + others) exceed ₹3.75 Lakhs, the Old Regime may save you more tax. Otherwise, the New Regime with its lower rates is usually better.
Planning to optimize your take-home pay? Use our Salary Calculator to see your CTC breakdown, or check the HRA Calculator if you pay rent and want to claim exemption under the Old Regime.
Formula
Under the New Regime (FY 2025-26), the income tax slabs are:
- ₹0 – ₹4,00,000: Nil (0%) - ₹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%
Plus 4% Health & Education Cess on the total tax.
Worked Example — Salary of ₹15,00,000: Step 1: Deduct standard deduction: ₹15,00,000 − ₹75,000 = ₹14,25,000 Step 2: Calculate tax slab-wise: - ₹0 to ₹4L = ₹0 - ₹4L to ₹8L = ₹4,00,000 × 5% = ₹20,000 - ₹8L to ₹12L = ₹4,00,000 × 10% = ₹40,000 - ₹12L to ₹14.25L = ₹2,25,000 × 15% = ₹33,750 Step 3: Total tax = ₹93,750 Step 4: Add 4% cess = ₹3,750 Step 5: Total tax payable = ₹97,500
Effective tax rate = 6.5% on ₹15L salary.
Tax comparison at different salaries (New Regime): - ₹10L salary: ₹0 tax (rebate applies) - ₹12L salary: ₹0 tax (rebate applies) - ₹15L salary: ₹97,500 - ₹20L salary: ₹2,39,200 - ₹25L salary: ₹4,00,400 - ₹50L salary: ₹12,48,000
How to use this Income Tax Calculator?
1. Enter Annual Income: Type your total annual income. For salaried individuals, use your gross salary (CTC minus employer PF and gratuity contributions). You can find this on your Form 16 or salary slip.
2. Section 80C Deductions: In the New Regime, most 80C deductions are NOT available. Leave this at ₹0 unless you are using the Old Regime.
3. NPS Contribution: If you contribute to NPS, enter the amount (up to ₹50,000) for additional deduction under 80CCD(1B), which is available in BOTH regimes.
4. Read Results: The calculator shows your taxable income, income tax, health & education cess (4%), and total tax payable.
Pro tip: If your salary is between ₹12L and ₹12.75L, you pay zero tax because the standard deduction of ₹75,000 brings your taxable income below ₹12L, qualifying for the Section 87A rebate.