Income Tax Calculator FY 2025-26

Choose the old regime if your total deductions (80C, 80D, HRA, home loan interest) exceed roughly ₹3–3.75 lakh; otherwise the new regime's lower slab rates save more. As a rule of thumb: income below ₹10L with minimal deductions → new regime; income above ₹15L with maximised deductions → old regime. Use this calculator to check both regimes with your actual numbers — you can switch every year (salaried employees).

Section 87A is a direct rebate on your final tax (not a deduction from income). Old regime: ₹12,500 rebate if taxable income ≤ ₹5 lakh — effectively zero tax up to ₹5L. New regime (FY 2025-26): ₹60,000 rebate if taxable income ≤ ₹12 lakh — effectively zero tax for salaried earning up to ₹12.75L (after ₹75K standard deduction). If income crosses ₹12L, the entire rebate is lost instantly.

Section 80C allows up to ₹1.5 lakh deduction covering PPF (7.1% tax-free), ELSS mutual funds (3-year lock-in), life insurance premiums, NSC, home loan principal, Sukanya Samriddhi Yojana, tax-saving FD (5-year), and children's school tuition fees. An extra ₹50,000 is available under 80CCD(1B) for NPS contributions over and above the 80C limit. Available only under the old tax regime.

Financial Year (FY) is April–March when you earn income; Assessment Year (AY) is the following year when you file your tax return. Example: FY 2024–25 income (Apr 2024–Mar 2025) is filed as AY 2025–26 ITR in July 2025. AY = FY + 1. ITR forms ask for the AY, so always use the correct year to avoid rejection.

If your tax liability exceeds ₹10,000 in a financial year, you must pay advance tax in quarterly instalments: 15% by June 15, 45% by September 15, 75% by December 15, and 100% by March 15. Missing or underpaying these attracts 1% monthly interest under Sections 234B and 234C. Salaried employees with full TDS deduction by their employer generally don't need to pay advance tax separately.

Under the old regime: senior citizens (60–80 years) get a basic exemption of ₹3 lakh and ₹50,000 Section 80D deduction; super senior citizens (80+) get a ₹5 lakh exemption and pay no tax until income crosses ₹5L. The new regime does not offer any age-based exemption — the same ₹4L basic exemption applies for all ages (raised from ₹3L in FY 2025-26), making the old regime usually better for senior citizens with pension income.

Salaried employees can switch regimes every year — declare your choice to your employer at the start of the FY for TDS purposes, or select a different regime while filing your ITR. Those with business or professional income can switch only once in their lifetime from old to new. Best practice: run the numbers each January, inform your employer by February, and align your March investments accordingly.

Standard deduction is a flat ₹75,000 reduction from salary income (raised from ₹50,000 in Budget 2024, applicable from FY 2024–25). It is available to all salaried employees and pensioners automatically — no proof needed — and is allowed under both old and new tax regimes. Your employer already applies it in Form 16 and it imports automatically into ITR.

Under the old regime, maximise: 80C (₹1.5L — PPF, ELSS, insurance), 80CCD(1B) (₹50K additional NPS), 80D (₹25–50K health insurance), Section 24(b) (₹2L home loan interest), and HRA exemption if paying rent. Combined, these can reduce taxable income by ₹5–6 lakh, saving ₹1.5–2L in tax at the 30% bracket. Under the new regime, scope is limited to standard deduction (₹75K) and employer NPS contribution (80CCD2).

Not filing ITR attracts a late-filing penalty of ₹5,000 (or ₹1,000 if income is below ₹5L), plus 1% monthly interest on unpaid tax under Section 234A. More seriously, you cannot carry forward capital or business losses, may face scrutiny notices, lose refunds, and encounter visa or loan rejections. File by July 31 (salaried); a belated return is possible until December 31 with penalty, after which you cannot file for that year.

Under the old regime, restructuring CTC can significantly cut taxes: increase HRA to 40–50% of basic (if paying rent), add meal coupons (₹2,200/month tax-free), include LTA (₹25–30K exempt twice in 4 years), and have your employer contribute to NPS (up to 10% of salary deductible under 80CCD2 with no cap). These legitimate allowances can collectively reduce taxable income by ₹1–2 lakh annually — negotiate the structure during appraisals or onboarding.

A tax exemption (Section 10 items like HRA, LTA, gratuity) reduces your gross income before any calculation — the exempt amount is never counted as taxable income. A tax deduction (Chapter VI-A: 80C, 80D, etc.) reduces your taxable income after gross income is computed. Both save tax, but exemptions come first in the ITR sequence. Under the new regime, most exemptions and deductions are not available.