Individuals have the option to file taxes under either the old or new tax regimes, with each offering different regulations and deductions. To accurately calculate your tax liabilities, you can use our income tax calculator, which is a cost-effective alternative to hiring a professional tax consultant. This tool not only helps you understand your tax obligations but also simplifies the process of comparing both regimes. 

Explore how the tax calculator works, their benefits, and how they can streamline your tax planning for smarter financial decisions.

Budget 2025 updates:

• No income tax for income upto Rs. 12 Lakhs. This is because of rebate applicable to new regime, which is Rs. 60,000
• Modified slab rates  for new regime are as follows for FY 2025-2026 (AY 2026-2027)

What is the Income Tax Calculator?

The Income tax calculator is an easy-to-use online tool that helps you calculate your tax liability based on your income details. It also gives you a comparison of tax liability between the old and new tax regimes to help you decide which is more beneficial for you. We have updated our tool in line with the income tax changes proposed in the Union Budget 2025 to help you estimate your tax liability for better financial planning. 

How to Use the Income Tax Calculator for FY 2024-25 (AY 2025-26) and FY 2025-26 (AY 2026-27)?

Following are the steps to use the tax calculator:

Step 1: Choose the financial year for which you want your taxes to be calculated.

Step 2: Select your age accordingly. Tax liability under the old regime differs based on the age groups.

Step 3: Click on ‘Continue’

Step 4: Enter your salary, i.e. salary before deducting various exemptions such as HRA and so on. If LTA deduction is applicable to you, reduce it from salary and enter the net figure. There is a field available for exempt allowances. Enter the particulars if it applies to your case.

Step 5: Along with taxable salary, you must enter other details such as interest income, rental income, interest paid on home loan for rented, and interest paid on loan for self-occupied property.

Step 6: For Income from Digital Assets, enter the net income (Sale consideration (-) Cost of Acquisition).

Step 7: Click on 'Continue’ again.

Step 8: You can also enter your tax-saving investments under sections 80C, 80D, 80G, 80E, and 80TTA, if applicable to your case.

Step 9: Click on 'Calculate' to calculate your tax liability. You will be able to compare the old and new tax regimes.

How to Calculate Income Tax on Salary with Example

To calculate Income tax, include income from all sources. Include:

• Income from Salary 
• Income from House Property 
• Income from Capital Gains 
• Income from Business/Profession 
• Income from Other Sources

Income tax calculation for the Salaried

Income from salary = Basic salary + HRA + Special Allowance + Transport Allowance + any other allowance.

Some components of your salary are exempt from tax, such as telephone bill reimbursement and leave travel allowance. If you receive HRA and live on rent, you can claim an exemption on HRA. Calculate the exempt portion of HRA using this HRA Calculator.

On top of these exemptions, a standard deduction of 50,000 is available in both old and Rs.75,000  new regime respectively.

Let's understand income tax calculation under both old and new tax regimes by way of an example:

Neha receives a Basic Salary of Rs 1,00,000 per month. HRA of Rs 50,000. Special Allowance of Rs 21,000 per month. LTA of Rs 20,000 annually. Neha pays a rent of Rs 40,000 and lives in Delhi.

Neha has income from interest from a savings account of Rs 8,000 and a fixed deposit interest income of Rs 12,000 during the year. Neha has made some investments to save income tax. PPF investment of Rs 50,000. ELSS purchase of Rs 20,000 during the year. LIC premium of Rs 8,000. Medical insurance paid of Rs 12,000. Here are the deductions Neha can claim under the old tax regime.

Calculation of gross taxable income and tax liability in India (Old regime):

Calculation of gross taxable income and tax liability in India (New regime):

Illustration for Tax Calculation for Slab Rates updated as on the Budget 2025:

Mr A has a salary income of Rs. 10,75,000 for FY 2025-2026. Income from other sources is Rs. 2,00,000. The income tax calculation for Mr A for the FY 2025-2026 under new regime is as follows:

Note:

• It is to be noted that marginal relief on rebate is still available for the slab rates proposed on budget 2025. Please refer to article for better understanding.
• Also, this rebate of Rs. 60,000 is not applicable for income taxed under special rates.

Slab Rates Under New and Old Regime

The slab rates are different under the new and old regimes. Under the old regime, the rates vary based on age: individuals under 60, those between 60 and 80, and those over 80. Under the new regime, the tax slabs are the same for all age groups. 

The tax slabs under the old regime are as follows:

The tax slabs under the new regime is as follows:

Surcharge and Education Cess:

If your income exceeds a certain threshold, you will incur additional taxes on top of the existing rates. This additional tax specifically targets high-income earners.

The surcharge rates are as follows:

• 10% of Income tax if total income > Rs.50 lakh and < Rs.1 crore,
• 15% of Income tax if total income > Rs.1 crore and < Rs.2 crore,
• 25% of Income tax if total income > Rs.2 crore and < Rs.5 crore,
• 37% of Income tax if total income > Rs.5 crore    

Note: The highest surcharge rate of 37% has been reduced to 25% under the new tax regime.

Additional Health and Education cess at the rate of 4% will be added to the income tax liability.

Note: There are certain deductions/exemptions which are not available under the New regime. Click here to know about the exemptions/deductions that are not available under the New regime.

Benefits of Using Income Tax Calculator

Using our online Income tax calculator offers several benefits such as:

Accuracy

Income tax calculator calculates your tax liability accurately eliminating any potential errors that result from calculating the tax liability manually. 

Swift and Hassle-free

The Income tax calculator is a tool which calculates your tax liability swiftly within few seconds and can be used anytime and anywhere.

User-friendly

The Income tax calculator is a very user-friendly tool. Simply input your income and deduction details to accurately calculate your tax liability.

Better Financial Management and Tax Planning

Understanding your tax liability in advance is essential for effective financial planning. By knowing your potential tax obligations, you can allocate your budget wisely and invest in tax-saving instruments like ELSS, PPF,etc. to reduce the tax liability.