Income Tax Calculator FY 2025-26

The honest answer is: it depends on your deductions. The new regime offers lower slab rates, which benefits people who have few or no deductions to claim. The old regime lets you reduce your taxable income through 80C investments, health insurance, HRA, home loan interest, and NPS. If those deductions add up to more than roughly Rs.3 to Rs.3.75 lakh for a Rs.15 lakh income, the old regime usually wins. Below that threshold, the new regime's lower rates save more. The problem is that most people guess instead of calculating. Put your actual numbers into both columns above. The calculator shows the result directly. Salaried employees switch between regimes every year. There is no permanent lock-in.

Section 87A is a rebate applied directly to your final tax amount, not a deduction from your income. In the old regime, if your taxable income is Rs.5 lakh or less, you get a full rebate of Rs.12,500, which wipes out the entire tax bill. In the new regime for FY 2025-26, the rebate is Rs.60,000 and applies if taxable income is Rs.12 lakh or less. For salaried employees, the Rs.75,000 standard deduction brings that threshold up to Rs.12.75 lakh in gross salary. The catch: cross Rs.12 lakh in taxable income by even a rupee and the entire Rs.60,000 rebate is gone instantly. At Rs.12.01 lakh taxable income, you suddenly owe the full tax on the entire amount.

Section 80C allows a deduction of up to Rs.1.5 lakh per year, and it covers a wider range of investments than most people realise. PPF contributions, ELSS mutual fund SIPs, life insurance premiums, home loan principal repayment, NSC, Sukanya Samriddhi Yojana deposits, tax-saving FDs with a 5-year lock-in, and children's school tuition fees all count toward this limit. Over and above the Rs.1.5 lakh 80C ceiling, Section 80CCD(1B) gives you an additional Rs.50,000 specifically for NPS contributions. That takes the combined deduction potential to Rs.2 lakh. None of this applies in the new tax regime, which is the key trade-off you are making when you choose it.

Financial Year is when you earn the money: April of one year through March of the next. Assessment Year is when you report it: the full year following the FY. FY 2024-25 means income earned from April 2024 through March 2025. The ITR for that income is filed in AY 2025-26, with a deadline of July 31, 2025. The ITR form itself asks for the Assessment Year, not the Financial Year. Entering the wrong year gets the return rejected or filed under the wrong period. AY is always FY plus one year.

Advance tax applies when your total tax liability for the year crosses Rs.10,000. Instead of paying it all in one shot at year-end, the government requires you to pay in quarterly instalments: 15% of the estimated liability by June 15, 45% by September 15, 75% by December 15, and the remaining 100% by March 15. Missing these deadlines or underpaying attracts 1% monthly interest under Sections 234B and 234C. For most salaried employees whose employer deducts TDS on salary every month, this is largely handled automatically. It becomes relevant when you have significant additional income: rental income, capital gains from stock sales, or freelance earnings that fall outside your regular TDS.

Under the old regime, the tax treatment improves meaningfully with age. Senior citizens between 60 and 80 years old get a basic exemption of Rs.3 lakh instead of Rs.2.5 lakh, and their Section 80D deduction limit for health insurance rises to Rs.50,000. Super senior citizens above 80 get a Rs.5 lakh basic exemption, which means zero tax on income up to that amount. The new regime does not make any age-based distinction. All individuals get the same Rs.4 lakh basic exemption from FY 2025-26, regardless of age. For most senior citizens living on pension income with limited deductions to claim, the old regime's higher basic exemption and better 80D limits typically make it the better option.

Salaried employees have full flexibility: switch between old and new every financial year. At the start of each year, tell your employer which regime you want for TDS deduction purposes. If you change your mind before filing the return, you choose the other regime in the ITR itself. The practical timeline: run the comparison in January when you have a good sense of the year's deductions, inform your employer by February so they adjust the remaining months' TDS, and use March to make any last-minute 80C investments if you are staying in the old regime. People with business or professional income do not get this annual flexibility. They switch from old to new only once.

The Rs.75,000 standard deduction is one of the few deductions available under both regimes. It was increased from Rs.50,000 in Budget 2024 and applies from FY 2024-25. Every salaried employee and pensioner gets it automatically, with no documentation or proof required. Your employer applies it when computing TDS, and it shows up in Form 16. When you upload Form 16 data to the ITR portal, the standard deduction is already factored in. It is not something you need to separately claim or fill in.

The full stack for the old regime: Rs.1.5 lakh under 80C (PPF or ELSS is the most flexible), Rs.50,000 under 80CCD(1B) for NPS, Rs.25,000 to Rs.50,000 under 80D depending on whether parents are senior citizens, Rs.2 lakh under Section 24(b) for home loan interest, and HRA exemption if you pay rent. Together, this stack reduces taxable income by Rs.5 to Rs.6 lakh. At the 30% bracket, that translates to Rs.1.5 to Rs.1.8 lakh saved in tax every year. Under the new regime, none of these apply except the Rs.75,000 standard deduction and employer NPS contributions under 80CCD2. The choice of regime is effectively the choice between this savings stack and the lower slab rates.

The consequences of not filing are specific and compounding. A late-filing penalty of Rs.5,000 applies (reduced to Rs.1,000 if your income is below Rs.5 lakh). Section 234A charges 1% monthly interest on any unpaid tax from the due date. Capital losses and business losses cannot be carried forward to offset future income if the return is not filed on time. Any refund due stays unclaimed. Visa applications and loan approvals often require the last two to three years of ITRs. The deadline for salaried employees is July 31. A belated return is possible until December 31 with the penalty. After December 31, you lose the option entirely for that assessment year.

Salary restructuring is about shifting parts of your CTC into tax-efficient components without changing the total. Under the old regime, useful restructuring moves include: increasing HRA to 40 to 50% of basic salary if you pay rent, adding meal coupons at Rs.2,200 per month which are exempt under Section 10, including LTA which is exempt twice in a block of four calendar years typically worth Rs.25,000 to Rs.30,000, and having your employer contribute to NPS on your behalf, which is deductible under 80CCD2 with no cap regardless of the Rs.1.5 lakh 80C ceiling. These changes together shift Rs.1 to Rs.2 lakh of your income out of the taxable bracket. The right time to ask for this is during appraisals, job switches, or when your employer opens a general CTC restructuring window. Under the new regime, none of these restructuring moves provide any tax benefit.

Exemptions and deductions both reduce your tax, but they work at different stages of the calculation. An exemption under Section 10, which covers HRA, LTA, gratuity, and maternity pay among others, removes income from the gross total before anything else is computed. That amount is simply never counted as taxable income. A deduction under Chapter VI-A, which covers 80C, 80D, 80CCD, and similar provisions, is applied after gross income is calculated to arrive at the net taxable figure. Exemptions come earlier in the sequence, which is why they are sometimes more valuable. Under the new regime, most of both categories are unavailable, which is the fundamental trade-off the regime makes in exchange for lower slab rates.