Income Tax Calculator for FY 2025-26
14 Jun, 2025
By Online Legal India
Published On 14 Jun 2025
Category Income Tax
Income tax in India is a direct charge on a person’s or organisation’s income, imposed by the government. Frequent changes in tax rules and slabs often create confusion in calculating the exact amount payable. Accurate tax calculation plays a key role in avoiding penalties and ensuring better financial planning. Online tax calculators serve as essential tools that offer quick, simple, and reliable estimates. These tools allow taxpayers to stay informed and manage their finances more efficiently.
In this blog, you will learn about the income tax calculator, how it works, key benefits, and more.
An Income Tax Calculator is a simple online tool made available by the Government of India through its official e-Filing portal. It helps taxpayers estimate their total tax payable under both the old and new tax regimes for a given financial year, such as FY 2025–26. This tool follows the latest provisions of the Income-tax Act, along with updated rules and government notifications, offering accurate and reliable results for better tax planning and informed financial decisions.
Here are the budget updates on Income Tax:
The government increases the tax rebate under Section 87A to Rs. 60,000. This benefit applies to individuals with taxable income up to Rs. 12 lakh under the new tax regime. As a result, people with taxable income up to Rs. 12 lakh do not pay any tax. This change helps middle-income salaried individuals and pensioners save more money compared to previous years. The earlier rebate was Rs. 25,000 for income up to Rs. 7 lakh.
The limit for Tax Deducted at Source (TDS) on rent increases to Rs. 50,000 per month. This means a person does not need to deduct TDS if the monthly rent is Rs. 49,000 or lower. This change eases the burden for tenants who rent homes at higher rates, especially in metro cities. Earlier, the TDS applied if the annual rent crossed Rs. 2.4 lakh. Now, the annual threshold stands at Rs. 6 lakh.
Senior citizens now enjoy a higher limit for interest income exemption. The new limit under Section 80TTB is Rs. 1,00,000, replacing the previous cap of Rs. 50,000. This applies to interest earned from savings accounts, fixed deposits, and recurring deposits held in banks or post offices. This update increases savings for retirees who depend on interest as their main source of income.
Under the Liberalized Remittance Scheme (LRS) of the Reserve Bank of India, the TCS (Tax Collected at Source) threshold now increases from Rs. 7 lakh to Rs. 10 lakh per financial year. If a person sends money abroad up to Rs. 10 lakh, no TCS applies. This helps families send funds for travel, medical treatment, or education abroad. It reduces the upfront tax cost and improves cash flow.
When a person takes an education loan from an approved financial institution and remits the funds under LRS, the government removes the TCS requirement. Earlier, TCS applied even if the funds came through an education loan. Now, students who borrow from authorized banks or lenders do not face extra tax collection while transferring funds abroad for studies. This measure supports students and reduces the financial pressure on families.
Here are the latest income tax slabs for FY2025–26 (Assessment Year 2026–27):
Under the new regime, the following tax rates apply to individual taxpayers:
|
Annual Income Range |
Applicable Tax Rates |
|
Income up to Rs. 4,00,000 |
Nil (No tax) |
|
Rs. 4,00,001 to Rs. 8,00,000 |
5% |
|
Rs. 8,00,001 to Rs. 12,00,000 |
10% |
|
Rs. 12,00,001 to Rs. 16,00,000 |
15% |
|
Rs. 16,00,001 to Rs. 20,00,000 |
20% |
|
Rs. 20,00,001 to Rs. 24,00,000 |
25% |
|
Income above Rs. 24,00,000 |
30% |
The government has increased the income tax rebate under the new tax regime from 25,000 to 60,000. As a result, individuals with an annual income of up to 12 lakh will have no tax liability. Additionally, salaried taxpayers are now entitled to a standard deduction of 75,000, which means those earning up to 12.75 lakh annually will not be required to pay any income tax under the revised structure.
In a further relief measure for elderly taxpayers, the tax deduction limit for senior citizens has been doubled, from 50,000 to 1 lakh.
According to the Finance Minister, these tax reforms are expected to lead to a revenue loss of 1 lakh crore in direct taxes and 2,600 crore in indirect taxes for the government.
The old income tax regime follows a structured slab system based on the age of the taxpayer. The tax rates remain unchanged from the previous year.
Common Provisions:
A 4% Health and Education Cess applies to the total tax. Surcharge applies if income exceeds specified thresholds. Marginal relief ensures that the increase in tax due to surcharge does not exceed the increase in income.
Who Can Use an Income Tax Calculator?
Here is a detailed explanation:
The Income Tax Calculator is open to everyone. A person does not need to create an account or log in to use the basic version. The calculator sits on the official e-Filing website under the "Quick Links" section. It works for any Indian citizen, regardless of age, income level, or profession. The tool gives instant results based on the details a person enters.
Salaried taxpayers use the calculator to check how much tax they owe. They enter their annual salary, HRA, standard deduction, and deductions under sections like 80C or 80D. The tool gives a comparison of tax under both the old and new regimes. This helps them choose the regime that saves more tax.
Freelancers, doctors, consultants, and other professionals use the calculator to plan their tax liability. They enter income from professional services, allowable deductions, and expenses. The calculator helps them check if they need to pay advance tax and how much they can save using deductions under Section 44ADA or other sections.
People who run a business use the calculator to estimate tax on their business profits. They enter net income, depreciation, eligible deductions, and any carried-forward losses. The calculator supports tax estimation under the presumptive scheme under Section 44AD. It helps them plan tax payments and avoid penalties.
Retired individuals use the calculator to compute tax on pension and interest income. The tool includes a higher exemption limit for senior citizens. It also considers deductions like 80TTB and 80D, which are relevant to this age group. This helps them know their tax savings clearly.
NRIs can also use the calculator to estimate tax on income earned in India. The calculator asks for residential status, which determines tax treatment. They enter income from property, capital gains, or other Indian sources. The tool does not calculate tax on foreign income, as that is not taxable in India for NRIs.
The basic calculator suits people with a single source of income like salary or pension. It asks for simple inputs such as income, deductions, and age. It gives a quick summary of tax payable under both regimes. It is ideal for someone who wants a fast and simple estimate.
The advanced calculator suits people with complex income sources. It includes detailed inputs like salary, house property, capital gains, and business income. It also includes TDS, advance tax, and interest under Sections 234A, 234B, and 234C. It helps in accurate tax planning and filing.
People use the calculator at the start of the financial year to plan investments and avoid excess tax. It helps them decide where to invest and how much to save under various sections. It also helps avoid surprises at the time of filing the return.
The Income Tax Calculator is a government-provided service. It is free, secure, and available at the Income tax portal. It follows the latest rules from the Income Tax Act. It does not require log in or any personal verification for basic use.
Here is the step-by-step process to use the Income tax calculator:
Step 1: Visit the Official Portal
Go to the Income Tax Department’s e-Filing website. Click on ‘Income and Tax Calculator’ under the Quick Links section. This opens the government-approved calculator used for tax estimation.
Step 2: Choose the Calculator Type
The page shows two options: Basic Calculator and Advanced Calculator. The Basic Calculator allows you to enter your total income and total deductions in a single step. The Advanced Calculator allows you to enter income and deductions under different heads like salary, house property, and capital gains. Choose one based on your requirements.
Step 3: Select Assessment Year
Pick the correct Assessment Year. For income earned in FY 2025–26, select AY 2026–27. This ensures the tool applies the latest tax rules and slabs applicable for that period.
Step 4: Fill Personal Information
Enter your age, taxpayer category (such as individual or HUF), and residential status. The calculator uses this information to apply age-specific tax slabs and other relevant tax provisions.
Step 5: Enter Income Details
If you choose the Basic Calculator, just enter your total income in the provided space. If you select the Advanced Calculator, fill in details separately for each income type such as salary, house property, capital gains, business or professional income, and other sources. This detailed entry ensures a more accurate calculation of your total taxable income and the tax you need to pay.
Step 6: Enter Deduction Details
Add details of tax-saving deductions allowed under the Income Tax Act, such as:
These deductions reduce your total taxable income.
Step 7: Choose the Tax Regime
The calculator displays tax details for both the Old and New Tax Regimes (under Section 115BAC). If you are using the Basic Calculator, you can click on 'View Comparison' to check your tax liability under each regime. In the Advanced Calculator, you can directly choose your preferred regime. This helps you pick the option that offers better tax savings.
Step 8: Review Tax Summary
Once you provide all the information, the calculator shows a clear summary that includes:
The summary gives a full breakdown so you can understand how the tax is calculated.
Step 9: Download or Save the Result
After reviewing the summary, click the download button to save the tax report in PDF format. This report includes all the details you enter along with the tax calculation and can be used while filing your ITR.
Step 10: Use for Planning Purposes
Remember that this calculator shows an estimated tax liability based on your input. It helps in advance planning, but you must file your return using accurate figures from Form 16, Form 26AS, AIS, and other documents.
A salaried individual earns Rs. 15,00,000 annually. Under the new regime, the government allows a standard deduction of Rs. 75,000. This brings the taxable income down to Rs. 14,25,000. The tax is calculated in slabs:
The total tax before cess is Rs. 93,750. The individual also qualifies for a rebate under Section 87A since the taxable income remains below Rs. 15,00,000. The rebate amount is Rs. 25,000. After this rebate, the net tax becomes Rs. 68,750. A 4% health and education cess applies, which adds Rs. 2,750. The final tax payable is Rs. 71,500.
Here are the key benefits of using an Online Tax Calculator:
An online tax calculator follows the latest budget updates. It includes revised tax slabs, applicable cess, standard deductions, and rebates. The tool applies current rules under the Income Tax Act, which helps avoid manual errors. It ensures that the taxpayer gets the exact tax payable based on their income and claims.
The calculator shows tax liability under both the old and new regimes. It gives a side-by-side comparison, which helps identify which regime results in lower taxes. This comparison helps make better decisions based on income type and eligible deductions.
The user enters salary, deductions, and other details once. The calculator instantly displays the tax amount. This removes the need to refer to tax tables or compute manually, saving time and reducing confusion.
The calculator runs on phones, tablets, and computers. Anyone can use it without installing software. As long as there is an internet connection, it works smoothly from home, office, or while traveling.
It shows how savings, investments, and expenses affect the final tax. The user can adjust inputs like rent, insurance, or PPF contributions to check outcomes. This helps plan finances within the financial year and avoid unnecessary tax burdens.
The Income Tax Department’s official calculator does not store or misuse user data. No sign-up or login is required. The taxpayer retains full control over the information they enter.
After the calculation, the user can download a detailed tax summary. It includes a breakdown of income, deductions, and regime-based comparison. This document proves helpful during income tax return filing and financial reporting.
The calculator separates all components of tax, including base tax, surcharge, and health and education cess. It explains how deductions or exemptions affect taxable income.
The user can change figures like salary, HRA, or Section 80C amounts to see how tax changes. This helps explore multiple financial situations and choose the best option.
Since the new regime is now the default, the calculator helps decide whether to continue with it or opt for the old one. It gives a clear tax outcome for both and helps to make the right choice.
Conclusion
In today's evolving tax landscape, an online income tax calculator serves as a valuable tool for estimating tax liability precisely. It enables individuals to compare old and new regimes, plan deductions effectively, and avoid last-minute surprises. Updated tax rules are integrated into the system to ensure accuracy and save time. Regular use of this government-approved tool supports better financial management and informed tax planning throughout the financial year.
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