Indian Income Tax Calculator

FY 2025-26

Compare Old vs New Tax Regime and optimize your tax savings

What's This All About?

In India, taxpayers can choose between two tax regimes - the Old Tax Regime with higher tax rates but various deductions, or the New Tax Regime with lower tax rates but fewer deductions.

This calculator helps you determine which regime will result in lower taxes for your specific financial situation.

Old Tax Regime

Old Tax Regime Features

Higher tax rates but allows multiple deductions like HRA, 80C, 80D, home loan interest, etc.

Tax Slabs
  • Up to ₹2.5 lakh: Nil
  • ₹2.5-5 lakh: 5%
  • ₹5-10 lakh: 20%
  • Above ₹10 lakh: 30%

Plus 4% Health & Education Cess

Higher tax rates with multiple deductions & exemptions

  • HRA Exemption
  • 80C Investments (₹1.5 lakh)
  • 80D Health Insurance
  • Home Loan Benefits
  • LTA, Other Exemptions

New Tax Regime

New Tax Regime Features

Lower tax rates with more slabs but minimal deductions. Only standard deduction of ₹75,000 for salaried individuals.

Tax Slabs
  • Up to ₹4 lakh: Nil
  • ₹4-8 lakh: 5%
  • ₹8-12 lakh: 10%
  • ₹12-16 lakh: 15%
  • ₹16-20 lakh: 20%
  • ₹20-24 lakh: 25%
  • Above ₹24 lakh: 30%

Plus 4% Health & Education Cess

Tax rebate up to ₹12.75 lakh for salaried individuals

Lower tax rates with minimal deductions

  • Standard Deduction (₹75,000)
  • Higher Basic Exemption (₹4 lakh)
  • More Tax Slabs
  • Rebate up to ₹12.75 lakh
  • No other major deductions

Step 1: Your Income Details

Step 2: Deductions & Exemptions (Applicable for Old Regime)

House Rent Allowance (HRA)

HRA Exemption

HRA exemption is calculated as the least of:

  1. Actual HRA received
  2. 50% of basic salary (for metro cities) or 40% of basic salary (for non-metro cities)
  3. Actual rent paid minus 10% of basic salary

You must be paying rent to claim this exemption.

Section 80C Investments

Section 80C Deductions (Max ₹1.5 lakh)

Includes investments and expenses like:

  • EPF (Employee Provident Fund)
  • PPF (Public Provident Fund)
  • ELSS (Equity Linked Saving Scheme)
  • Life Insurance Premium
  • Tax Saving Fixed Deposits (5-year lock-in)
  • Home Loan Principal Repayment
  • Tuition Fees for Children
  • National Savings Certificate (NSC)
  • Sukanya Samriddhi Yojana

Maximum deduction under this section is ₹1,50,000 per year.

Total 80C (Max ₹1,50,000): ₹0

Health Insurance Premium (Section 80D)

Section 80D Deductions

Deduction for health insurance premiums:

  • For self, spouse & children: Up to ₹25,000
  • For parents below 60 years: Up to ₹25,000
  • For parents above 60 years: Up to ₹50,000

Maximum possible deduction: ₹75,000 (if you and your spouse are below 60 years and parents are senior citizens)

Home Loan Interest (Section 24B)

Home Loan Interest Deduction

Deduction for interest paid on home loans:

  • For self-occupied property: Up to ₹2,00,000
  • For let-out property: No limit (can set off against rental income)

Principal repayment is covered under Section 80C (above)

For joint home loans, each co-borrower can claim this deduction separately based on their share.

Other Deductions

Additional Tax-Saving Options

Various other deductions available under Income Tax Act:

  • Section 80CCD(1B): Additional ₹50,000 for NPS contribution (over and above 80C limit)
  • Section 80TTA: Interest from savings account (up to ₹10,000)
  • Section 80G: Donations to charitable organizations (50-100% deduction based on the organization)
  • Section 80E: Interest on education loan (no upper limit)

Understanding Income Tax in India

This section provides educational information about income tax in India to help you make informed decisions.

Old vs New Tax Regime: Who Should Choose What?

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Old Tax Regime is generally better for:

  • Individuals with significant investments in tax-saving instruments
  • People paying high rent or having home loans
  • Those with high insurance premiums
  • People with substantial deductions under various sections

New Tax Regime is generally better for:

  • Individuals with few or no investments in tax-saving instruments
  • People with income below ₹12.75 lakh (due to high rebate)
  • Those who prefer simplicity over tax planning
  • Individuals who don't pay rent or don't have home loans

Common Tax-Saving Investments Explained

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  • Public Provident Fund (PPF)

    A government-backed long-term savings scheme with tax benefits. 15-year lock-in period with extensions available in blocks of 5 years. Interest rate is fixed quarterly (usually around 7-8%).

  • Employee Provident Fund (EPF)

    Retirement savings scheme for salaried employees. Both employer and employee contribute (typically 12% of basic salary each). Tax-free interest and eligible for Section 80C deduction.

  • Equity Linked Saving Scheme (ELSS)

    Tax-saving mutual funds that invest primarily in equity markets. Shortest lock-in period (3 years) among all 80C options. Potential for higher returns but with market risks.

  • National Pension System (NPS)

    Voluntary retirement savings scheme. Offers tax benefits under Section 80C (₹1.5 lakh) and additional deduction of ₹50,000 under Section 80CCD(1B). Partial withdrawal allowed, and 60% of corpus can be withdrawn tax-free at maturity.

  • 5-Year Tax Saving Fixed Deposit

    Fixed deposit with a lock-in period of 5 years. Offers fixed returns (typically 6-7%) with eligible Section 80C deduction. Interest earned is taxable.

Understanding HRA Exemption

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House Rent Allowance (HRA) exemption is one of the most significant tax benefits for salaried individuals who live in rented accommodation.

How HRA Exemption Works:

The exemption is calculated as the least of the following three amounts:

  1. Actual HRA received from the employer
  2. 50% of basic salary (for metro cities) or 40% of basic salary (for non-metro cities)
  3. Actual rent paid minus 10% of basic salary

Example:

Let's say your:

  • Basic Salary: ₹50,000 per month (₹6,00,000 per year)
  • HRA Received: ₹20,000 per month (₹2,40,000 per year)
  • Rent Paid: ₹25,000 per month (₹3,00,000 per year)
  • Location: Metro city

The calculation would be:

  1. Actual HRA: ₹2,40,000
  2. 50% of Basic (metro): ₹3,00,000
  3. Rent paid - 10% of Basic: ₹3,00,000 - ₹60,000 = ₹2,40,000

The exemption would be ₹2,40,000 (the least of the three).

Important Notes:

  • You need to actually pay rent to claim this exemption
  • If annual rent exceeds ₹1,00,000, your landlord's PAN details are required
  • HRA exemption is not available under the New Tax Regime

Home Loan Tax Benefits

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Home loans offer dual tax benefits - on both principal repayment and interest payment.

Principal Repayment (Section 80C):

  • Principal portion of your EMI qualifies for deduction under Section 80C
  • Maximum deduction: ₹1.5 lakh (combined with other 80C investments)
  • Property should not be sold within 5 years of possession, or the benefit will be reversed

Interest Payment (Section 24B):

  • Interest portion of your EMI qualifies for deduction under Section 24B
  • For self-occupied property: Up to ₹2 lakh per year
  • For let-out property: No limit (full interest can be claimed)

Joint Home Loan Benefits:

If you've taken a joint home loan with a family member:

  • Each co-borrower can claim deductions separately based on their share
  • Each can claim up to ₹2 lakh for interest and up to ₹1.5 lakh for principal
  • This effectively multiplies the tax benefit

Additional Benefit for First-Time Home Buyers (Section 80EE):

  • Additional deduction of up to ₹50,000 for interest paid
  • Loan should be sanctioned between April 1, 2016, and March 31, 2017
  • Loan amount should be up to ₹35 lakh
  • Property value should not exceed ₹50 lakh