Income Tax Calculator

What is an Income Tax Calculator?

An income tax calculator helps you in estimating your tax liability using basic details, like income, eligible deductions, and exemptions. Taxpayers need to provide the financial details as per the regime they opt for, which is either the old regime or the new regime. 

The tax calculator provides you with accurate results, unlike manual calculation, which avoids the risk of errors. 

How to Use Income Tax Calculator Online for FY 2025-26 & AY 2026-27?

The tax calculation in India depends mainly on particular slabs and may vary based on the taxpayer's annual income. These slabs specify the tax rate. The tax bracket will differ if the income earned in a year exceeds the income earned in the previous year.

To file the income tax returns, you can opt for two tax regimes, i.e., the old tax regime and the new tax regime, and both regimes have different tax slabs. The taxpayer is classified based on their age under the old tax regime. The classification is as follows:

• Resident and Non-Resident Taxpayer: Individual taxpayer aged under 60 years. 
• Senior Citizens (Residents): Taxpayers aged 60 years or above but not more than 80 years. 
• Super Senior Citizens (Residents): Taxpayers aged 80 years or more. 

Each group has different tax slab rates and exemptions. However, under the new tax regime, the slab rates for FY 25-26 (AY 26-27) are fixed and not age-related. Individuals, HUFs (Hindu Undivided Families), companies, and partnership firms have different income tax slab rates. 

Income Tax Rates for New and Old Regimes

There is a significant difference in the income tax rates for the new and old regimes. Under the new tax regime, several exemptions and deductions are not provided, which are available in the old tax regime. However, the tax rates are lower in the new tax regime.

Taxpayers can calculate their tax liability under both regimes and can file the returns under the regime that offers more benefits to them. The table below lists the tax rates for both the old and new tax regimes:

Tax Rates for FY 2025-26 (AY 2026-27)

Income Tax Slab	Old Tax Regime Tax Rate for AY 2026-27	Income Tax Slab	New Tax Regime Tax Rate for AY 2026-27
Up to Rs. 2,50,000	Nil	Rs. 4,00,000	Nil
Rs. 2,50,001 upto Rs. 5,00,000	5%	Rs. 4,00,001 upto Rs. 8,00,000	5%
Rs. 5,00,001 up to Rs. 10,00,000	20%	Rs. 8,00,001 upto Rs. 12,0,000	10%
Above Rs 10,00,000	30%	Rs. 10,00,001 upto Rs. 16,00,000	15%
-	-	Rs. 16,00,001 upto Rs. 20,00,000	20%
-	-	Rs. 20,00,001 upto Rs. 24,00,000	25%
-	-	Above Rs. 24,00,000	30%

Under the old tax regime, the tax rates for all categories remain uniform. 

How to Calculate Gross Income from Different Sources of Income?

You need to know the five different sources (or heads) of income to compute gross income from different income sources using an income tax calculator online. Here are the different heads of income under the Income Tax Act, 1961:

Income from Salary

Consider elements like basic salary, dearness allowance, gratuity, travel, house rent allowance, and others to calculate the gross income of salaried individuals. Exemption for HRA and leave travel allowance is not available in the new tax regime. However, under the Union Budget 2025, the standard deduction of Rs. 50,000 is increased to Rs. 75,000, which qualifies for exemption. 

Income from Business or Profession

To calculate gross income from a business or profession, consider income earned from all business activities or a profession. 

Income from House Property

Consider rental income earned from residential and commercial properties. The TDS deduction threshold limit has been increased from Rs. 2.40 lakhs (FY 2024-25) to Rs. 6.00 lakhs (FY 2025-26).

Income from Capital Gains 

Profits received through gains from selling an asset fall under this category. It includes the sale of property, stocks, gold, mutual funds, etc. The gains are classified as either short-term capital gains or long-term capital gains. Earlier, the tax rate for short-term capital assets was 15% and 20% for long-term capital assets. 

Under the Union Budget 2024, the rates changed and have been the same for FY 2025-26 (AY 2026-27). A rate of 12.5% has been fixed for long-term capital assets, and 20% for short-term capital assets. Also, the indexation benefits have been eliminated for all assets. 

For long-term capital gains from listed equity shares and mutual funds, the exemption threshold limit has been increased to Rs. 1.25 lakh from Rs. 1.00 lakh. Additionally, the holding periods of 12,24, and 36 months have also been changed to 12 and 24 months. 

Income From Other Sources

Dividends, royalties, interests, gifts, etc., must be considered under this category. No Changes were made under the Union Budget 25 for taxation rules under these categories. However, the TDS threshold limit was increased:

• For senior citizens: From Rs. 50,000 to Rs. 1,00,000
• For dividend income: From Rs. 5,000 to Rs. 10,000
• In case of interest income: From 40,000 to Rs. 50,000
• Royalties: No changes were made

How to Calculate Income Tax of a Salaried Employee?

The process to calculate income tax for salaried employees is detailed. You can either do it yourself, seek help from a professional, or use an income tax calculator online to calculate taxes for a salaried employee. Follow the steps below to calculate income tax for a salaried employee:

Start by Calculating Your Gross Income

In the Income Tax Calculator, enter your total income, including allowances. Certain allowances are exempt from taxation, so they are not included in your total salary. The two main components of your salary are leave travel allowance (LTA) and house rent allowance (HRA). These will not be included in your gross income, subject to certain conditions. To compute HRA, take the lowest value among the following:

• House rent allowance provided by your employer
• The actual rent must be 10% of the basic pay + DA (dearness allowance), monthly salary. 
• If your workplace is in a non-metro city, 40% of your basic salary. For metro cities, 50% of your basic salary. 

Also, mention income received from different sources, such as capital gains or deposits, and the result will be your gross income. You can estimate your gross pay by entering all your income details in the online income tax calculator. 

Calculate Your Net Taxable Income

Add all applicable deductions under Chapter VI-A of the Income Tax Act to calculate your taxable income. Include all deductions available under Section 80C to Section 80U. The old tax regime allows most of these deductions, while the new tax regime allows you to choose only a few of them.

You can also claim a standard deduction of Rs. 50,000 from your annual salary for FY 2023-24, applicable only to salaried employees. Here are some points to provide you with an idea of the tax-saving instruments specified in this section:

• Mutual fund
• Life insurance
• Public Provident Fund (PPF)
• Unit Linked Insurance Plan (ULIP)
• Equity Linked Savings Scheme (ELSS)
• National Pension Savings Scheme (NPS)

Here are the sections in the Income Tax Act that permit you to avail of different tax deductions:

• Section 80C

This section allows both HUF and individual Indian citizens to claim deductions of up to Rs. 1.5 lakh in a financial year. You can avail of this benefit by investing in instruments like life insurance policies (LIC), public provident funds, national savings certificates, ELSS, and home loan repayment. 

• Section 80CCD (1B)

Under this section, both salaried and self-employed citizens of India can avail an additional tax deduction of Rs. 50,000. To avail a total maximum deduction of Rs. 2 lakh per year, you can combine the benefits of this section with Section 80C. You can also calculate the NPS deduction from your taxable amount by providing your NPS contribution. 

• Section 80CCD (1)

This deduction is for individuals contributing towards retirement through the National Pension Scheme. The Section 80CCD (1) offers a tax deduction for your NPS investment. According to this section, if a salaried employee's gross salary is under Rs. 1.5 lakh, they will recieve a tax deduction of 10%. 

• Section 80E

Under this section, individuals paying interest on education loans can avail themselves of the tax deductions. However, the tax deductions can be enjoyed only for a limited period of 8 years under Section 80E.

• Section 80DD

Individuals and HUFs can claim deductions for covering the medical expenses of their dependents or disabled family members. However, you can enjoy a tax benefit of up to Rs. 1.25 lakh based on the person's disability. 

• Section 80D

Under Section 80D, you can recieve deductions for the premium amount paid for your health insurance. Consider the following points to compute the maximum amount of tax deduction under this section:

• Medical Insurance for self, spouse, or children: A deduction of Rs. 25,000 is available. 
• Health insurance for parents aged under 60 years: Additional deduction of Rs. 25,000 is allowed. 
• Self and parents in the age group of more than 60 years: Additional deduction of Rs. 50,000. 

Keep in mind that the overall tax deduction must not exceed Rs. 1 lakh under Section 80D. Additionally, make sure to make the payments of your premium online to avail tax benefits under this section. 

Choose the Tax Slab Based on Your Net Income

For the old regime, the tax slabs for FY 2023-24 have been uniform. However, under the Budget 2023, some changes have been made to the income tax slab in the new regime. In which the basic limit for exemption has been increased to Rs. 3 lakh and the rebate under Section 87A has been doubled.

After subtracting deductions from your annual income, check your net taxable income under any of these regimes. Then, estimate the result with the existing tax slab rates to know the income tax category you fall in. You can use an online income tax calculator to know your correct tax slab rate. 

Calculate the Tax

Below are two examples of how you can calculate tax under both the old and new tax regimes:

1. Old Tax Regime

Jatin chose to file the Income Tax returns under the old tax regime. The details he provided are as follows:

• Basic Salary: Rs. 12.00 lakh per annum
• HRA: Rs. 5,40,000 per annum
• LTA: Rs. 20,000 per annum
• Deductions under 80C: Public Provident Fund Rs. 1.20 lakhs
• Deductions under 80D: Rs. 40,000 (maximum eligible for him is Rs. 25,000 + Rs. 50,000)

Here's how the gross income under the old tax regime is calculated:

Income Nature	Amount	Exemptions/Deductions	Taxable Income
Basic Salary	12,00,000	-	12,00,000
HRA	5,40,000	-	5,40,000
LTA	20,000	20,000 (bills produced)	-
Standard Deduction	-	50,000	Less: 50,000
Gross Total Income from Salary	-	-	16,90,000 (after standard deduction)

• Deductions under 80C = Rs. 1.20 lakhs
• Deductions under 80D = Rs. 40,000
• Taxable income = 16,90,000 - 1,60,000 = 15,30,000

Tax payable according to the slab rates for FY 2025-26:

• Up to Rs. 2,50,000 - Nil
• Rs. 2,50,000 to Rs. 5,00,000 - 5% for above Rs. 2,50,000 = Rs. 12,500.
• Rs. 5,00,000 to Rs. 10,00,000 - 12,500 + 20% above Rs. 5,00,000 = 12,500 + 1,00,000 = Rs. 1,12,500.
• Above Rs. 10,00,000 = 1,12,500 + 30% above Rs. 10,00,000 = 1,12,500 + 1,59,000 = 2,71,500. 
• Cess at 4% = 10,860
• Total tax payable = 2,71,500 + 10,860 = 2,82,360 (Surcharge applies to annual salary over Rs. 50.00 lakhs)

2. New Tax Regime

Vikas has chosen to file taxes under the new tax regime, and he provided the following details:

• Basic Salary: Rs. 9.00 lakhs per annum
• HRA: Rs. 7.20 lakhs per annum
• Special allowance: Rs. 2.52 lakhs per annum
• Rent: Rs. 6.00 lakhs per annum

Income Nature	Amount	Exemptions/ Deductions	Total taxable income
Basic Salary	Rs. 9,00,000	-	Rs. 9,00,000
HRA	Rs. 7,20,000	-	Rs. 7,20,000
Special Allowance	Rs. 2,52,000	-	Rs. 2,52,000
Standard Deduction	-	Rs. 75,000	Less: 75,000
Total Gross Income	-	-	Rs. 17,97,000

• Taxable income = 17,97,000
• Tax payable according to the slab rates
• Up to Rs. 4.00 lakhs: Nil
• Rs. 4.00 lakhs to Rs. 8.00 lakhs: 5% above Rs. 4.00 lakhs = Rs. 20,000. 
• Rs. 12.00 lakhs to Rs. 16.00 lakhs: 60,000 + 15% above Rs. 12.00 lakhs = 60,000 + 60,000 = 1,20,000.
• Above Rs. 16.00 lakhs: 1,20,000 + 20% above Rs. 16,00,000 = 1,20,000 + 39,400 = 1,59,400. 
• Cess at 4% = Rs.6,376
• Total tax payable = 1,59,400 + Rs. 6,376 = Rs. 1,65,776.

Benefits of Using an Income Tax Calculator

An income tax calculator is an online tool designed to ease tax calculations and make the process easier and more accurate. Here are some key benefits of using an online income tax calculator:

• User-Friendly

Income tax calculators are made user-friendly so that individuals who are not familiar with technical or financial knowledge can also use them easily. To make it even easier, the tool offers a user-friendly interface, clear instructions, and step-by-step guides. The calculator tool can be found and used online, without even needing to download any additional software. 

• Privacy of Data

The security of the users' data is kept as a priority on such income tax calculators. The tool doesn't save any sensitive data; instead, it performs all the calculations locally or through secure servers. This helps you calculate your taxability confidently without stressing about the misuse of your financial information. 

• Accuracy

While calculating taxes, several factors are considered, like income source, exemption, deduction, and applicable tax rates. When you calculate the taxes manually, there are chances of error, resulting in underpayment or overpayment of taxes. Using an income tax calculator ensures accurate and precise results by automating the process and calculating the tax using the most recent tax slabs and regulations. It can be very useful while filing income tax returns, as it minimizes the risk of fines for inaccurate tax reporting. 

• Enhanced Money Management and Tax Planning

Apart from a tool for calculating tax, an income tax calculator is also useful for financial planning. It helps people determine their income after paying tax by providing information regarding their tax obligations. Additionally, several calculations also offer you advice on ways to lower taxes, like deductions under Section 80C or 80D of the Income Tax Act. 

• Easy and Fast

Calculating taxes can be very stressful and time-consuming, particularly for people who have less knowledge about the tax laws. The income tax calculator expedites the process by providing results instantly. Once you enter your income details, any relevant deductions, or other required data, the tool will calculate your tax liability in just a few seconds. 

How to Calculate Total Income Tax Liability with the Calculator for New and Old Regimes?

Follow the steps below to calculate the tax liability using an online income tax calculator under both the old and new tax regimes:

Old Tax Regime

• Use a trusted income tax calculator online.
• Choose the financial year for which you need to file taxes.
• From the dropdown, choose your age.
• Enter income details, like income from salary, rental income, interest on home loan for self-occupied or rented property, and other income. 
• Fill in the deduction details under 80C 80CCD, 80D, 80EEA, 80CCD (2), 80TTA, 80G, and other available deduction. Also, mention the applicable rebate under 87A.
• Click on the calculate button to check the results. 

New Tax Regime

• Access a reliable income tax calculator.
• Choose the year for which you wish to calculate taxes
• From the dropdown menu, select your age
• Enter your income details and applicable deductions, i.e, the standard deduction and deduction under 80CCD(2). Ensure to consider the rebate under Section 87A as well. 
• Click on the calculate button, and the screen will display the result.

For FY 2025-26 (AY 2026-27), Income Tax Returns must be filed before the 31st of July 2026. The following interest and penalty will be charged for late filing:

• If you file after the due date, interest under Section 234A at 1% per month, or a part of it, on the payable tax from the due date until the filing date will be charged. 
• A penalty of Rs. 5000 will be levied under Section 234F. However, for individuals having a total annual income under Rs. 5.00 lakhs, the penalty will be Rs. 1,000. 

Budget 2026 Updates on Income Tax

Several changes have been made in India's Union Budget 2026, presented in January 2026, effective mostly from April 1, 2006, for FY 2026-27. The modifications focus on simplification and compliance. The key changes include the rollout of the new Income Tax Act 2005 and the rationalization of TCS rates. However, no changes have been made to core tax slabs. 

The new regime slabs remains unfiorm, with a rebate of up to Rs. 60,000 under Section 87A. It made an income of up to Rs. 12 lakh tax-free. Here are the key changes made in Budget 2026:

• The new Income Tax Act 2025 replaces the 1961 Act. It introduced simplified rules, redesigned forms, and uniform 'Tax Year' terminology. 
• For non-adult cases, the ITR-2 and ITR-4 filing deadline extends to the 31st of August. Filing of revised returns is allowed until the 31st of March, with a fee for filing after the 31st of December. 
• On remittances under LRS for education/medical, overseas tours, scrap, timber, and minerals, the TCS rates are reduced to a flat 2%. 
• TDS on property purchased from NRIs under Section 194-IA can be deposited using the buyer's PAN, eliminating the need to obtain a TAN. 
• Interest from motor accident claims tribunals (MACT) is now fully exempt from income tax. 
• Securities Transaction Tax (STT) on Futures & Options (F&O) has been significantly increased. For example, STT on futures rises from 0.02% to 0.05% (a 150% increase), raising transaction costs for traders. 
• Instead of dividends, proceeds received from share buyback will be taxed as capital gains (30% for individuals). 

Income Tax Exemptions for Salaried Individuals Under the Old Tax Regime

The income tax exemptions for salaried individuals are:

• Standard deduction: Rs. 50,000
• Professional tax: Applicable as per the state laws
• Leave travel allowances: Expenses incurred for travel within India under Section 10(5)
• Interest on Home Loans: Up to Rs. 2.00 lakhs on interest paid for home loans under Section 24(b), applicable only to self-occupied properties. 
• House Rent Allowance for Rented Accommodation: Exemption under Section 10(13A) up to actual rent paid minus 10% of salary or the actual HRA provided by the employer. For non-metro cities, 40% of the salary, and for metro cities, 50% of the salary. 
• Deductions Under Section 80CCD (1B): An additional benefit of Rs. 50,000 for NPS contributions. 
• For donations made to charitable institutions, deductions under section 80G are subject to certain limits. 
• For interest paid on education loans, deductions under Section 80E are available for only 8 years.
• For health insurance premiums, deductions available under Section 80(D) are:
  • For self and family: Up to Rs. 25,000
  • For parents below 60 years: Up to Rs. 25,000
  • For parents aged above 60 years: Rs. 50,000
• Deductions under Section 80C are available for investments in the following, up to Rs. 1.50 lakhs
  • Life insurance premiums (LIC)
  • Tax Saver Fixed Deposits 
  • Public Provident Fund (PPF)
  • Employees Provident Fund (EPF)
  • Equity Linked Savings Scheme (ELSS)
  • Principal repayment of Home Loans

*Note: Remember that these deductions apply only to the old tax regime. The new tax regime has lower tax rates. Also, it allows deductions only for the employer's contributions to NPS and the standard deduction. You can choose between the old and new tax regimes based on your overall tax liability and whichever is more beneficial for you. 

Income Tax Exemptions Under the New Tax Regime

Several deductions that apply to the old regime are not available under the new regime. However, under the new tax regime, the following income is tax-exempt:

• Standard Deduction: Increased to Rs. 75,000 from Rs. 50,000
• Deduction Under Family Pension: Increased from Rs. 25,000 to Rs. 15,000
• Deductions Under Section 80CCD (2): NPS contribution made by the employer up to 14%. 
• Employees' Provident Fund: Interest earned on the account balance for annual contributions up to Rs. 2.5 lakhs. 
• Gratuity Payout at Retirement: Government employees are fully exempt, while other employees are limited to a maximum of Rs. 20.00 lakhs. 
• Other Exemptions: 
  • Gifts of up to Rs. 50,000
  • Life insurance plans' maturity proceeds under Section 10(10D), subject to conditions. 
  • Employer allowance for conducting official duties, including travel expenses, food coupons, and tour allowances.