What is Income Tax in India?

Income tax is a direct tax levied by the Government of India on individuals and entities based on their annual income. For FY 2025-26, taxpayers can choose between the old tax regime (with deductions) or the new tax regime (with lower rates but limited deductions). Our calculator helps you compare both and find which saves you more money.

How to Use This Tax Calculator

1. Enter your annual gross salary or total income
2. Add any additional income (rent, interest, capital gains, etc.)
3. Enter deductions under Section 80C (max ₹1.5 lakhs)
4. Add other deductions (80D, home loan interest, etc.)
5. Select your age category (below 60, 60-80, above 80)
6. Click calculate to see tax under both old and new regimes
7. Compare and choose the regime that minimizes your tax

Income Tax Slabs FY 2025-26

New Tax Regime (Default)

• ₹0 - ₹3,00,000: Nil (Tax rebate under 87A)
• ₹3,00,001 - ₹7,00,000: 5%
• ₹7,00,001 - ₹10,00,000: 10%
• ₹10,00,001 - ₹12,00,000: 15%
• ₹12,00,001 - ₹15,00,000: 20%
• Above ₹15,00,000: 30%
• Standard deduction: ₹50,000

Old Tax Regime (Optional)

• ₹0 - ₹2,50,000: Nil (₹3L for senior citizens, ₹5L for super senior)
• ₹2,50,001 - ₹5,00,000: 5%
• ₹5,00,001 - ₹10,00,000: 20%
• Above ₹10,00,000: 30%
• Standard deduction: ₹75,000
• Plus all exemptions and deductions (80C, 80D, HRA, etc.)

Note: Health and Education Cess of 4% applies on total tax in both regimes.

Popular Tax-Saving Deductions

• Section 80C (max ₹1.5L): PPF, ELSS, LIC, EPF, home loan principal, NSC, Sukanya Samriddhi
• Section 80D (max ₹25K-1L): Health insurance premiums for self and parents
• Section 24(b) (max ₹2L): Home loan interest for self-occupied property
• Section 80CCD(1B) (max ₹50K): Additional NPS contribution
• Section 80E: Education loan interest (no limit, 8 years)
• Section 80G: Donations to eligible charities (50% or 100%)
• HRA Exemption: If paying rent (least of three calculations)
• LTA: Leave Travel Allowance for domestic travel

Old Regime vs New Regime - Which is Better?

Smart Tax Planning Tips

• Start tax planning at the beginning of financial year, not at the end
• Split investments across family members to reduce tax burden
• Invest in ELSS for dual benefit of 80C deduction + market returns
• Maximize employer-provided tax-free allowances (food, phone, etc.)
• Consider NPS for additional ₹50,000 deduction under 80CCD(1B)
• Keep all investment proofs and bills organized for filing
• File ITR on time to avoid penalties and interest
• Use tax-saving FDs if you prefer guaranteed returns

Important Tax Dates to Remember

• March 31: Financial year end, last date for tax-saving investments
• July 31: ITR filing deadline for salaried individuals
• October 31: ITR filing deadline for those requiring audit
• December 31: Last date for revised return filing
• Quarterly: Advance tax payment dates (June 15, Sept 15, Dec 15, March 15)

Common Tax Filing Mistakes to Avoid

• Not filing return even if tax is nil (filing gives you refund and is useful for loans)
• Forgetting to report all income sources (interest, freelancing, etc.)
• Claiming deductions without proper documentation
• Not linking PAN with Aadhaar (makes PAN inoperative)
• Missing the filing deadline and paying penalties
• Selecting wrong ITR form for your income type
• Not verifying return within 30 days of filing

Disclaimer: This calculator provides estimates based on current tax laws and standard deductions. Actual tax liability may vary based on your specific circumstances, additional income sources, and applicable exemptions. Tax laws are subject to change. Always verify calculations and consult a qualified chartered accountant or tax advisor for accurate tax planning and filing.