Prepared by: FreeBytes Editorial Team · Reviewed by: FreeBytes Research Team
Methodology: We cross-check formulas, slabs, and examples against published government, regulator, lender, and scheme documentation before updating the page.
Calculations use the latest available Indian tax slabs, interest rates, and government rules. This tool is for informational purposes only and does not constitute financial or tax advice. Consult a qualified Chartered Accountant or financial advisor for decisions specific to your situation.
Income Tax Calculator — Old vs New Regime
Compare your tax liability under both regimes for FY 2025-26. New regime is tax-free up to ₹12 lakh (₹12.75L for salaried).
Enter Your Income & Deductions
Income Tax Slabs — FY 2025-26
New Regime (Default)
| Income Range | Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4L – ₹8,00,000 | 5% |
| ₹8L – ₹12,00,000 | 10% |
| ₹12L – ₹16,00,000 | 15% |
| ₹16L – ₹20,00,000 | 20% |
| ₹20L – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
87A Rebate: ₹60,000 — zero tax if taxable income ≤ ₹12L
Standard deduction: ₹75,000 (salaried) → effective tax-free salary ₹12.75L
Old Regime (Opt-in)
| Income Range | Below 60 | Senior (60–80) | Super Senior (80+) |
|---|---|---|---|
| Up to ₹2.5L | Nil | Nil | Nil |
| ₹2.5L – ₹3L | 5% | Nil | Nil |
| ₹3L – ₹5L | 5% | 5% | Nil |
| ₹5L – ₹10L | 20% | 20% | 20% |
| Above ₹10L | 30% | 30% | 30% |
87A Rebate: Up to ₹12,500 if taxable income ≤ ₹5L
Standard deduction: ₹50,000 (salaried) + 80C, HRA, 80D, etc.
Note: Health & Education Cess of 4% applies on tax + surcharge for both regimes.
When is the Old Regime Better?
The old regime is beneficial only when your total deductions (80C + 80D + HRA + home loan interest + others) are high enough to reduce your taxable income below the new regime's effective tax burden. For most salaried individuals earning below ₹15L with limited deductions, the new regime is more tax-efficient.
Key Deductions Available Under Old Regime Only
- Section 80C: Up to ₹1.5 lakh — EPF, PPF, ELSS, NSC, LIC, Tax-saving FD
- Section 80D: ₹25,000–₹1 lakh — Health insurance premiums
- HRA Exemption: For salaried employees in rented accommodation
- Section 24b: Up to ₹2 lakh — Home loan interest (self-occupied)
- NPS (80CCD(1B)): Additional ₹50,000 over 80C limit
- Section 80E: Education loan interest (no upper limit)
Important Notes
- The new tax regime is the default from FY 2023-24 onwards; opt out explicitly for old regime
- Salaried employees can switch regime every year at the time of filing ITR
- TDS and advance tax payments are not considered in this calculation
- Surcharge applies for income above ₹50 lakh; consult a CA for high-income scenarios
Worked Example: Old vs New Regime
Consider a salaried person earning ₹12,00,000 a year who can claim ₹1.5 lakh under 80C, ₹1.2 lakh of HRA, and ₹25,000 under 80D. Under the old regime, after the ₹50,000 standard deduction and these ₹2.95 lakh of deductions, taxable income falls to about ₹8.05 lakh, giving tax of roughly ₹74,000. Under the new regime, with only the ₹75,000 standard deduction, taxable income is ₹11.25 lakh and tax works out to about ₹65,000. Here the new regime wins — but if this person had a home loan adding ₹2 lakh of Section 24b interest, the old regime would become cheaper. The best regime depends entirely on how many deductions you actually claim.
How to Choose Your Regime
As a rule of thumb, the new regime favours those with few deductions — younger employees, those without a home loan, or anyone who does not invest heavily in 80C instruments. The old regime rewards those who maximise deductions: a home loan, full 80C, HRA, NPS, and health insurance together can push your tax below the new-regime figure. Calculate both ways each year, because salaried taxpayers are allowed to switch regimes annually at filing time.
Marginal vs Effective Tax Rate
India uses a slab system, so reaching the 30% slab does not mean you pay 30% on your whole income — only the portion above the slab threshold is taxed at that rate. Your effective rate (total tax ÷ total income) is always lower than your top slab rate. The ₹12 lakh earner above pays an effective rate of only about 5–6%, not 20%, because the lower slabs and rebate apply to the earlier portions of income.
Frequently Asked Questions — Income Tax Calculator
Under the new tax regime for FY 2025-26, income up to ₹12 lakh is fully tax-free via Section 87A rebate of ₹60,000. Salaried individuals also get a ₹75,000 standard deduction, making the effective tax-free salary ₹12.75 lakh.
The new regime slabs for FY 2025-26 are: Up to ₹4L — Nil; ₹4L–₹8L — 5%; ₹8L–₹12L — 10%; ₹12L–₹16L — 15%; ₹16L–₹20L — 20%; ₹20L–₹24L — 25%; Above ₹24L — 30%. A 4% health & education cess applies on the final tax.
The old regime allows deductions like 80C (up to ₹1.5L), HRA, 80D, home loan interest, etc., but has higher slab rates with a basic exemption of ₹2.5L (below 60), ₹3L (60–80 yrs), or ₹5L (80+). The new regime offers lower rates, a ₹12L tax-free limit via rebate, and is the default regime.
Section 80C allows deductions up to ₹1.5 lakh per year for PPF, ELSS mutual funds, EPF contributions, NSC, 5-year tax-saving FDs, life insurance premiums, home loan principal repayment, Sukanya Samriddhi Yojana, and children's tuition fees.
Under the new tax regime, individuals with taxable income up to ₹12 lakh receive a rebate of ₹60,000 under Section 87A, resulting in zero tax. Under the old regime, the rebate is up to ₹12,500 for taxable income ≤ ₹5 lakh.
The standard ITR filing due date for salaried individuals is July 31st of the assessment year. For taxpayers requiring a tax audit, the due date is October 31st. Filing after the due date incurs a late fee of ₹1,000 (income ≤ ₹5 lakh) or ₹5,000.