Income Tax Calculator for FY 2025-26: Complete Guide
Income Tax Calculator helps you calculate your tax liability for Financial Year 2025-26
(Assessment Year 2026-27). With the introduction of the new tax regime, taxpayers now have the option to
choose between old and new tax structures. Our calculator compares both regimes and recommends the best
option to minimize your tax burden.
Old vs New Tax Regime: Which is Better?
The choice between old and new tax regime depends on your total deductions. Here's a detailed comparison:
Old Tax Regime
Tax Slabs:
- Up to ₹2.5 lakhs: Nil
- ₹2.5L - ₹5L: 5%
- ₹5L - ₹10L: 20%
- Above ₹10L: 30%
Key Features:
- Standard deduction: ₹50,000
- All deductions available (80C, 80D, HRA, etc.)
- Section 87A rebate: Up to ₹12,500 for income ≤ ₹5 lakhs
- Better for those with high deductions (₹2.5L+)
New Tax Regime (FY 2025-26)
Tax Slabs:
- Up to ₹3 lakhs: Nil
- ₹3L - ₹7L: 5%
- ₹7L - ₹10L: 10%
- ₹10L - ₹12L: 15%
- ₹12L - ₹15L: 20%
- Above ₹15L: 30%
Key Features:
- Standard deduction: ₹75,000
- No other deductions allowed (except employer NPS contribution)
- Section 87A rebate: Makes income up to ₹7 lakhs tax-free
- Lower tax rates across all slabs
- Better for those with minimal deductions
Section 80C: Maximum Tax Savings
Section 80C allows deduction up to ₹1,50,000 from taxable income. Here are eligible investments:
Popular 80C Investments
- PPF (Public Provident Fund): 7.1% interest, 15-year lock-in, tax-free returns
- ELSS (Equity Linked Savings Scheme): Market-linked returns, 3-year lock-in
- EPF (Employee Provident Fund): 8.25% interest, retirement corpus
- Life Insurance Premium: Term/endowment plans
- NSC (National Savings Certificate): Fixed returns, 5-year tenure
- Tax Saver FD: 5-year fixed deposit
- Home Loan Principal: Repayment of principal amount
- Tuition Fees: For 2 children's education
- Sukanya Samriddhi Yojana: For girl child, high interest
- NPS (Tier-1): Additional ₹50,000 under 80CCD(1B)
Section 80D: Health Insurance Deduction
Claim deductions for health insurance premiums paid:
- Self, Spouse, Children: Up to ₹25,000
- Parents (below 60 years): Additional ₹25,000
- Parents (above 60 years): Additional ₹50,000
- Maximum Total: ₹1,00,000 (if both you and parents are senior citizens)
- Preventive Health Checkup: ₹5,000 (included in above limits)
HRA (House Rent Allowance) Exemption
HRA exemption is calculated as the minimum of:
- Actual HRA received from employer
- Rent paid minus 10% of basic salary
- 50% of basic salary (metro cities) or 40% (non-metro)
Example: Basic salary ₹50,000/month, HRA ₹20,000/month, Rent ₹15,000/month (Metro)
- Option 1: ₹20,000 (Actual HRA)
- Option 2: ₹15,000 - ₹5,000 (10% of basic) = ₹10,000
- Option 3: ₹25,000 (50% of basic)
- HRA Exemption: ₹10,000/month = ₹1,20,000/year
Note: HRA exemption is only available in old tax regime.
Home Loan Tax Benefits
Section 24: Interest Deduction
- Self-occupied Property: Up to ₹2,00,000 per year
- Let-out Property: Entire interest amount (no limit)
- Under Construction: Pre-construction interest deductible in 5 equal installments
Section 80C: Principal Repayment
- Principal repayment qualifies under Section 80C
- Maximum ₹1,50,000 (combined with other 80C investments)
- Available only after possession
Section 80EE: First-time Home Buyers
- Additional ₹50,000 deduction on interest
- Loan sanctioned between April 1, 2016 - March 31, 2017
- Property value ≤ ₹50 lakhs, Loan amount ≤ ₹35 lakhs
NPS (National Pension System) Tax Benefits
- Section 80CCD(1): Up to ₹1.5 lakhs (within 80C limit)
- Section 80CCD(1B): Additional ₹50,000 (over and above 80C)
- Section 80CCD(2): Employer contribution up to 10% of basic (no limit)
- Total Possible Deduction: ₹2 lakhs + employer contribution
Other Important Deductions
Section 80E: Education Loan Interest
- Entire interest paid on education loan
- No maximum limit
- Available for 8 years or till loan is repaid
- For higher education in India or abroad
Section 80G: Donations
- 50% or 100% of donation amount
- Donations to approved charitable institutions
- Subject to 10% of adjusted gross total income
Section 80TTA/TTB: Interest on Savings
- 80TTA (Below 60 years): ₹10,000 on savings account interest
- 80TTB (Senior Citizens): ₹50,000 on bank/post office deposits
Tax Saving Strategies for FY 2025-26
For Salaried Employees
- Maximize Section 80C (₹1.5L) through PPF, ELSS, EPF
- Invest additional ₹50,000 in NPS (80CCD(1B))
- Pay health insurance premium (₹25K-₹1L under 80D)
- Claim HRA exemption if paying rent
- Utilize home loan benefits if applicable
- Keep medical bills for reimbursement
- Claim LTA (Leave Travel Allowance)
For Self-Employed/Business Owners
- Maintain proper books of accounts
- Claim all business expenses
- Depreciation on assets
- Professional tax deduction
- Rent paid for office space
- Employee salaries and benefits
- Interest on business loans
Frequently Asked Questions
Can
I switch between old and new tax regime every year?
Yes, salaried individuals can switch between regimes every year while filing ITR.
However, individuals with business income can switch only once in their lifetime. Choose the regime that
minimizes your tax liability each year.
What
is the last date to file ITR for FY 2025-26?
For individuals (non-audit cases), the last date is July 31, 2026. For businesses
requiring audit, it's October 31, 2026. Late filing attracts penalty of ₹5,000 (₹1,000 if income < ₹5
lakhs).
Is TDS deducted on salary refundable?
Yes, if TDS deducted exceeds your actual tax liability, you'll get a refund when
filing ITR. Ensure you claim all eligible deductions and exemptions to reduce tax liability and
maximize refund.
What happens if I don't file ITR?
Not filing ITR when required attracts penalty up to ₹10,000, interest on unpaid
tax, and you cannot carry forward losses. You may also face difficulty in loan applications, visa
processing, and government tenders.
Can I claim both HRA and home loan benefits?
Yes, you can claim both if you're living in a rented house while owning a home
in a different city. HRA exemption for rent paid and home loan interest deduction (Section 24) for
owned property are both allowed.
What is Section 87A rebate?
Section 87A provides tax rebate for low-income taxpayers. In old regime, rebate
of up to ₹12,500 for income ≤ ₹5 lakhs. In new regime, income up to ₹7 lakhs is completely tax-free
due to this rebate.
How is capital gains tax calculated?
Short-term capital gains (STCG) on equity: 15%. Long-term capital gains (LTCG)
on equity: 10% on gains above ₹1 lakh. For debt funds and other assets, gains are added to income
and taxed as per slab rates.
What is advance tax and who should pay it?
If your tax liability exceeds ₹10,000 in a year, you must pay advance tax in
four installments (June 15, Sept 15, Dec 15, March 15). Failure to pay attracts interest under
Section 234B and 234C.
Common Tax Filing Mistakes to Avoid
- Wrong ITR Form: Using incorrect form leads to rejection
- Not Reporting All Income: Include salary, interest, rental, capital gains
- Incorrect Bank Details: Wrong account number delays refund
- Missing Form 16: Verify TDS details with Form 26AS
- Not Claiming Deductions: Claim all eligible deductions
- Ignoring Notices: Respond to IT department notices promptly
- Not Verifying ITR: E-verify within 30 days of filing
- Mismatch in Details: Ensure PAN, Aadhaar, bank details match
Tax Planning Calendar for FY 2025-26
April - June
- Plan tax-saving investments for the year
- Review salary structure with employer
- Submit investment declaration to employer
- Pay first advance tax installment (June 15)
July - September
- File ITR for previous year (July 31)
- Invest in ELSS, PPF, NPS
- Pay second advance tax installment (Sept 15)
October - December
- Review tax-saving investments made
- Pay health insurance premium
- Pay third advance tax installment (Dec 15)
January - March
- Complete all tax-saving investments by March 31
- Submit investment proofs to employer
- Pay fourth advance tax installment (March 15)
- Receive Form 16 from employer
Technical Performance & Accessibility
Our Income Tax Calculator is built with modern web technologies:
- Instant Calculations: Real-time tax computation with Chart.js
- Mobile-Optimized: Responsive design for all devices
- Print-Ready: Generate PDF tax reports
- Accessible: WCAG AA compliant
- Privacy-First: All calculations happen locally
- Fast Loading: Optimized for Core Web Vitals
- Accurate: Updated with FY 2025-26 tax slabs