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Income Tax Calculator

Estimate your tax liability for the selected assessment year. Supports both old and new regimes, HRA, deductions, and more.

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Income Tax Calculator — Compare Old vs New Regime and Know Your Exact Tax Liability

Every April, millions of Indian taxpayers face the same question: old regime or new regime? And by March, many realise they planned their investments without an accurate picture of what their actual tax bill would be. This Income Tax Calculator eliminates that uncertainty. Enter your gross salary, income from other sources, applicable deductions (80C, 80CCD(1B), 80D, HRA, home loan interest), select your age category and assessment year — and instantly see your taxable income, tax payable, health and education cess, total liability, and a direct side-by-side comparison of both regimes.

This tool is designed for salaried individuals, professionals, and business owners who need a clear, reliable estimate for investment planning, advance tax computation, or simply understanding what portion of their income goes to the government — before it does.

How Indian Income Tax Is Calculated — The Step-by-Step Process

Indian income tax for individuals follows a structured calculation process:

  • Step 1 — Gross Total Income: Sum of all income: salary (after standard deduction of ₹75,000 under the new regime or ₹50,000 under the old regime), house property income, business/profession income, capital gains, and other sources.
  • Step 2 — Deductions (old regime only): Subtract eligible deductions: 80C (up to ₹1.5 lakh), 80CCD(1B) NPS (up to ₹50,000), 80D health insurance (up to ₹25,000/₹50,000 for senior citizens), 80E education loan interest, 80G donations, HRA exemption, home loan interest (Section 24b, up to ₹2 lakh for self-occupied).
  • Step 3 — Taxable Income: Gross Total Income minus all applicable deductions.
  • Step 4 — Apply slab rates: Tax is calculated progressively on the taxable income using the applicable slab rates for the chosen regime.
  • Step 5 — Add cess: Health and Education Cess of 4% is added on the computed tax.
  • Step 6 — Surcharge (if applicable): For income above ₹50 lakh, a surcharge of 10–25% (old regime) or 10–15% (new regime, capped for LTCG) applies.

New Regime vs Old Regime — FY 2025-26 Tax Slabs

New Tax Regime (default from FY 2023-24): No deductions or exemptions except standard deduction (₹75,000 for salaried). Tax-free up to ₹12 lakh effective income (with ₹60,000 rebate under Section 87A). Slabs: ₹0–3L: Nil; ₹3–7L: 5%; ₹7–10L: 10%; ₹10–12L: 15%; ₹12–15L: 20%; above ₹15L: 30%.

Old Tax Regime: Full deductions (80C, 80D, HRA, home loan interest, etc.) available. Tax-free up to ₹5 lakh effective income (with rebate under 87A). Slabs: ₹0–2.5L: Nil; ₹2.5–5L: 5%; ₹5–10L: 20%; above ₹10L: 30%. Senior citizens (60+): basic exemption ₹3 lakh; super senior citizens (80+): ₹5 lakh.

The new regime is beneficial when your deductions are low (below roughly ₹3.75 lakh for someone earning ₹15 lakh). The old regime wins when you maximise 80C, 80D, HRA, and home loan deductions — the combined tax savings from deductions can outweigh the new regime's lower rates.

HRA Exemption — How It's Calculated

House Rent Allowance (HRA) exemption under the old regime is the minimum of three values:

  • Actual HRA received from employer
  • Rent paid minus 10% of Basic + DA
  • 50% of Basic + DA (for metro cities: Delhi, Mumbai, Kolkata, Chennai) or 40% for non-metro

Example: Basic ₹40,000/month, HRA ₹20,000/month, rent paid ₹18,000/month, metro city. (1) ₹20,000 (2) ₹18,000 − ₹4,000 = ₹14,000 (3) ₹20,000. Minimum = ₹14,000/month. Annual HRA exemption = ₹1,68,000. This reduces your taxable salary by this amount under the old regime — HRA alone saves ₹33,600–₹50,400 in tax for 20–30% bracket taxpayers.

Maximising Deductions Under the Old Regime

For the old regime to be financially superior, you need substantial deductions. A practical deduction stack for a salaried employee:

  • 80C: ₹1,50,000 (EPF + PPF + ELSS + life insurance premium)
  • 80CCD(1B) NPS: ₹50,000 (additional NPS contribution)
  • 80D: ₹25,000 (self/family health insurance) + ₹25,000 (parents' insurance) = ₹50,000
  • HRA: ₹1,00,000–₹2,00,000 (depends on rent and city)
  • Home loan interest Section 24b: ₹2,00,000 (self-occupied property)
  • Standard deduction: ₹50,000

Total deductions: ₹6,25,000–₹7,25,000. For someone earning ₹15 lakh, this brings taxable income down to ₹7.75–₹8.75 lakh — where the old regime's effective tax is significantly lower than the new regime. Run both scenarios in this calculator to verify which saves more for your specific numbers.

Frequently Asked Questions About Income Tax

Salaried individuals can switch between the old and new regimes every financial year. Business owners and professionals who have opted out of the new regime once cannot switch back to the new regime more than once — they are locked into the old regime unless they close their business income. For salaried employees, inform your employer of your chosen regime at the start of the financial year (this determines TDS); you can switch at ITR filing time if it results in lower tax.
Under the new regime, most deductions are removed. The key deductions still available are: Standard deduction of ₹75,000 for salaried employees and pensioners; employer's NPS contribution (Section 80CCD(2)) — up to 14% of salary for central government employees, 10% for others; Section 80JJAA for new employment; family pension standard deduction (₹15,000 or 1/3rd of pension). All other major deductions — 80C, 80D, HRA, home loan interest, 80G — are not available.
Section 87A provides a tax rebate that effectively makes certain income tax-free. Under the new regime for FY 2025-26: if your total income does not exceed ₹12 lakh, the entire tax liability (before cess) is rebated — making ₹12 lakh income effectively tax-free (combined with ₹75,000 standard deduction, this means ₹12.75 lakh gross salary = zero tax). Under the old regime: rebate of ₹12,500 applies if total income is ₹5 lakh or below. The rebate does not apply on special rate income like LTCG at 12.5%.
Advance tax is required if your total estimated tax liability for the year exceeds ₹10,000 (after TDS). It applies to salaried employees with significant other income (interest, rental, capital gains), freelancers, and business owners. Instalments: 15% by 15 June, 45% by 15 September, 75% by 15 December, 100% by 15 March. Non-payment or under-payment attracts interest under Sections 234B and 234C. Salaried employees with only salary income rarely need to pay advance tax as TDS by the employer covers it.
Under Section 24(b), interest on a home loan for a self-occupied property is deductible up to ₹2 lakh per year. For a let-out property, the full interest is deductible (no cap), but the net loss from house property (after rental income) that can be set off against salary is capped at ₹2 lakh — the excess loss is carried forward for 8 years. The principal repayment (not interest) qualifies under Section 80C within the ₹1.5 lakh limit. This double benefit (80C for principal + 24b for interest) is one of the key reasons the old regime remains beneficial for home loan borrowers.
For incomes up to ₹7–8 lakh with modest deductions, the new regime is usually better due to the 87A rebate making it effectively zero-tax up to ₹12 lakh gross salary. For incomes of ₹12–25 lakh with high deductions (80C + NPS + HRA + home loan = ₹4–6 lakh), the old regime often saves ₹15,000–₹40,000 more. Above ₹25 lakh, the new regime's 30% flat rate above ₹15 lakh competes closely with the old regime only if deductions are very large (₹7 lakh+). The break-even point depends entirely on your individual deduction profile — use this calculator to compare both for your exact numbers.
This calculator provides a planning estimate based on the inputs you provide. For the actual ITR filing, use your Form 16 (employer-issued TDS certificate), Form 26AS (tax credit statement), and AIS (Annual Information Statement) from the Income Tax portal. The actual tax payable in your ITR may differ if you have income or deductions not captured here — such as capital gains, perquisites, carry-forward losses, or special rate income. For complex cases, consult a chartered accountant.