Income Tax Calculator FY25-26 | Old vs New Regime

Income Tax Slabs FY 2025-26

🆕 New Tax Regime (Default) — FY 2025-26

Up to ₹4,00,000: Nil
₹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%

Standard Deduction: ₹75,000 for salaried. Section 87A Rebate: Income up to ₹12 lakh is effectively tax-free.

📜 Old Tax Regime — FY 2025-26

Below 60 Years:

Up to ₹2,50,000: Nil
₹2,50,001 - ₹5,00,000: 5%
₹5,00,001 - ₹10,00,000: 20%
Above ₹10,00,000: 30%

Standard Deduction: ₹50,000. 87A Rebate: Income up to ₹5 lakh is tax-free.

Old vs New Regime — Which Should You Choose?

Choose New Regime if:

You have minimal deductions (no home loan, no major 80C investments)
You want simpler tax filing without tracking proofs
Your income is between ₹7L-₹15L with few deductions

Choose Old Regime if:

You have 80C ₹1.5L + HRA + NPS investments exceeding ₹3-4 lakh
You're paying home loan interest (Section 24)
You have health insurance premiums (80D)
You donate to charity (80G)

Major Tax Deductions Available (Old Regime Only)

Section 80C — ₹1,50,000 limit

PPF, ELSS, EPF, NSC, LIC premium, ULIP
Children's tuition fees
Home loan principal repayment
5-year tax-saving FD

Section 80CCD(1B) — Additional ₹50,000

Extra deduction for NPS contributions over and above 80C limit.

Section 80D — Health Insurance

Self & family: up to ₹25,000
Parents below 60: additional ₹25,000
Senior citizen parents: additional ₹50,000

Section 24(b) — Home Loan Interest

Up to ₹2,00,000 deduction on interest paid on self-occupied home loan.

HRA Exemption

Minimum of: (a) Actual HRA received, (b) 50% of basic salary in metro, 40% in non-metro, (c) Rent paid - 10% of basic salary.

How Income Tax is Calculated — Step by Step

Calculate Gross Total Income: Salary + business income + capital gains + other sources
Apply Standard Deduction: ₹75K (New) or ₹50K (Old) for salaried
Apply Section Deductions: 80C, 80D, 80CCD(1B), etc. (Old regime only)
Calculate Taxable Income: Gross Income - Total Deductions
Apply Tax Slabs: Calculate tax based on applicable slabs
Apply 87A Rebate: If income within rebate limit
Add Surcharge: 10% (₹50L+), 15% (₹1Cr+), 25% (₹2Cr+), 37% (₹5Cr+)
Add Cess: 4% Health & Education Cess on tax + surcharge

Tax Saving Tips for FY 2025-26

Max out 80C with ELSS funds (better returns than PPF in long term)
Use 80CCD(1B) for additional ₹50K NPS deduction
Get parents health insurance for extra 80D benefit
Donate to PM Cares or registered NGOs for 80G
Claim HRA if living in rented accommodation
Plan home loan EMI for both 80C and Section 24 benefits

Frequently Asked Questions

Which is better — Old or New tax regime?

The New regime is better if you have minimal deductions, as income up to ₹12 lakh is effectively tax-free. The Old regime is better if you can claim deductions exceeding ₹3-4 lakh (80C ₹1.5L + HRA + NPS + 80D).

What is Section 87A rebate?

Section 87A provides a tax rebate up to ₹25,000 in New regime (for income up to ₹12L) and ₹12,500 in Old regime (for income up to ₹5L). It effectively makes income below these thresholds tax-free.

Is standard deduction available in New regime?

Yes, FY 2025-26 New regime offers ₹75,000 standard deduction for salaried individuals. Old regime offers ₹50,000 standard deduction.

Can I switch between tax regimes every year?

Salaried individuals (with only salary income) can switch between regimes every year while filing ITR. Business income earners can switch only once in their lifetime back to Old regime.

Are deductions like 80C allowed in New regime?

No, most deductions like 80C, 80D, HRA, LTA are NOT available in New regime. However, employer contribution to NPS (80CCD(2)) and standard deduction are allowed.

What is the surcharge on income tax?

Surcharge is additional tax on high incomes: 10% for income ₹50L-₹1Cr, 15% for ₹1Cr-₹2Cr, 25% for ₹2Cr-₹5Cr, 37% for above ₹5Cr (capped at 25% in New regime).

Income Tax Calculator FY 2025-26

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