Income Tax Calculator (India)
Basic Information
Deductions
Limited deductionsRegime Comparison Summary
Old Regime
₹1,01,400
Tax Payable
New Regime
₹54,600
Tax Payable
New Regime saves you:
₹46,800
Old Regime Breakdown
| Gross Income | ₹12,00,000 |
| Deductions | -₹2,75,000 |
| Taxable Income | ₹9,25,000 |
Tax Slabs:
| 0% | ₹0 |
| 5% | ₹12,500 |
| 20% | ₹85,000 |
| + Cess (4%) | ₹3,900 |
| Final Tax | ₹1,01,400 |
| Monthly Tax | ₹8,450 |
New Regime Breakdown
| Gross Income | ₹12,00,000 |
| Deductions | -₹75,000 |
| Taxable Income | ₹11,25,000 |
Tax Slabs:
| 0% | ₹0 |
| 5% | ₹20,000 |
| 10% | ₹32,500 |
| + Cess (4%) | ₹2,100 |
| Final Tax | ₹54,600 |
| Monthly Tax | ₹4,550 |
About This Tool
Understanding Income Tax in India
Income tax is a direct tax levied by the Government of India on individuals, Hindu Undivided Families (HUFs), companies, firms, and other entities based on their annual income. The Income Tax Department, governed by the Income Tax Act of 1961, manages tax collection and regulations. For salaried individuals and businesses, understanding tax liability is crucial for financial planning and compliance.
India follows a progressive tax system where tax rates increase with income levels. The financial year (FY) runs from April 1 to March 31, and taxpayers must file returns by July 31 (for individuals) of the assessment year. With the introduction of the New Tax Regime in 2020 and its subsequent updates, taxpayers now have the flexibility to choose between two systems based on their deductions and investments.
Old Tax Regime vs New Tax Regime
Old Tax Regime: The traditional system allows taxpayers to claim various deductions and exemptions under sections like 80C (₹1.5 lakh for investments), 80D (health insurance), HRA (House Rent Allowance), LTA (Leave Travel Allowance), and standard deduction (₹50,000). This regime suits individuals with significant investments and expenses eligible for tax benefits. However, tax rates are higher compared to the new regime.
New Tax Regime: Introduced to simplify taxation, the new regime offers lower tax rates but eliminates most deductions and exemptions. Only the standard deduction of ₹50,000 is allowed. For FY 2024-25, the tax slabs are more favorable with a higher exemption limit (₹3 lakh) and lower rates across brackets. This regime benefits those with minimal deductions or younger professionals without substantial investments.
Key Difference: The new regime is now the default option from FY 2023-24 onwards. Taxpayers must actively opt for the old regime if they wish to claim deductions. Use our calculator to compare both regimes and determine which saves you more tax based on your actual income and deductions.
Tax Slabs for FY 2024-25
New Tax Regime (Default):
- Up to ₹3,00,000: 0% (No tax)
- ₹3,00,001 to ₹7,00,000: 5%
- ₹7,00,001 to ₹10,00,000: 10%
- ₹10,00,001 to ₹12,00,000: 15%
- ₹12,00,001 to ₹15,00,000: 20%
- Above ₹15,00,000: 30%
Old Tax Regime (For individuals below 60 years):
- Up to ₹2,50,000: 0%
- ₹2,50,001 to ₹5,00,000: 5%
- ₹5,00,001 to ₹10,00,000: 20%
- Above ₹10,00,000: 30%
Senior Citizens (60-80 years): Basic exemption limit is ₹3,00,000 in the old regime.
Super Senior Citizens (80+ years): Basic exemption limit is ₹5,00,000 in the old regime.
Popular Deductions Under Old Regime
Section 80C (Maximum ₹1,50,000): The most commonly used deduction covering investments in Employee Provident Fund (EPF), Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), National Savings Certificate (NSC), life insurance premiums, principal repayment of home loans, children's tuition fees, and 5-year tax-saving fixed deposits.
Section 80D (Health Insurance): Deduction up to ₹25,000 for health insurance premiums paid for self, spouse, and children. An additional ₹25,000 (or ₹50,000 for senior citizen parents) is allowed for parents' health insurance. Senior citizens can claim up to ₹50,000 for their own insurance.
Section 80TTA/80TTB: Interest income from savings accounts is deductible up to ₹10,000 under Section 80TTA for individuals below 60 years. Senior citizens can claim up to ₹50,000 under Section 80TTB for interest from savings, fixed deposits, and recurring deposits.
HRA (House Rent Allowance): Salaried individuals living in rented accommodation can claim exemption on HRA received from employers. The exemption is calculated as the minimum of: actual HRA received, rent paid minus 10% of salary, or 50% of salary (metro cities) / 40% of salary (non-metro).
Standard Deduction: A flat deduction of ₹50,000 is available to all salaried individuals and pensioners under both old and new regimes, reducing gross income before calculating taxable income.
Section 87A Rebate
Section 87A provides a rebate for resident individuals with lower incomes. Under the New Tax Regime, if your taxable income is up to ₹7,00,000, you can claim a rebate of up to ₹25,000 on your tax liability. This effectively means zero tax for incomes up to ₹7 lakh (before cess).
Under the Old Tax Regime, the rebate limit is ₹5,00,000 with a rebate of up to ₹12,500. However, this rebate is only available if your taxable income (after all deductions) is within the limit. The rebate is applied on the tax amount calculated, not on income.
Important: Health and Education Cess at 4% is applicable on the final tax amount even after rebate. The cess cannot be reduced by Section 87A rebate.
How to Choose the Right Tax Regime
The decision between old and new regime depends entirely on your deductions. If your total deductions (80C + 80D + HRA + LTA + other allowances) exceed approximately ₹2-2.5 lakh, the old regime typically results in lower tax liability. This is common for individuals with home loans, substantial insurance premiums, or high HRA.
Conversely, if you have minimal investments or are in the early stages of your career without significant deductions, the new regime with its lower tax rates is usually more beneficial. Young professionals, those without home loans, or individuals preferring simplicity over deduction management often find the new regime advantageous.
Our Income Tax Calculator automatically compares both regimes based on your inputs and highlights which one saves you more tax. You can experiment with different deduction amounts to understand break-even points and optimize your tax planning strategy. Remember, you can switch between regimes every financial year (for salaried individuals), so annual review is recommended.
Tax Planning Tips
- Maximize Section 80C: Invest the full ₹1.5 lakh limit in tax-saving instruments like ELSS, PPF, or EPF to reduce taxable income significantly.
- Claim Health Insurance (80D): Purchase comprehensive health insurance for yourself and parents to claim deductions up to ₹75,000-₹1,00,000 depending on age.
- Maintain HRA Documentation: Keep rent receipts and rental agreements to claim HRA exemption. If rent exceeds ₹1 lakh annually, ensure your landlord's PAN is submitted.
- Plan Investments Early: Spread investments throughout the year rather than last-minute rush in March to make informed decisions.
- Review Annually: Tax laws and personal finances change yearly. Compare regimes each April to select the optimal option for that financial year.
- Consider NPS (80CCD(1B)): Additional ₹50,000 deduction beyond 80C is available for National Pension System contributions, useful for retirement planning.
- File on Time: Avoid penalties by filing your ITR before the July 31 deadline. Utilize our calculator to prepare accurate tax projections beforehand.
Practical Examples
Example 1: Young Professional (Annual Income: ₹8,00,000)
Deductions: 80C (₹50,000), 80D (₹15,000), Standard Deduction (₹50,000)
Old Regime: Taxable Income = ₹6,85,000 → Tax ≈ ₹40,950
New Regime: Taxable Income = ₹7,50,000 → Tax ≈ ₹37,500 ✓ Better
Example 2: Mid-Career Professional with Home Loan (Annual Income: ₹15,00,000)
Deductions: 80C (₹1,50,000), 80D (₹25,000), HRA (₹2,00,000), Standard Deduction (₹50,000)
Old Regime: Taxable Income = ₹10,75,000 → Tax ≈ ₹1,54,250
New Regime: Taxable Income = ₹14,50,000 → Tax ≈ ₹2,00,000 ✗ Old Better
Frequently Asked Questions
Can I switch between regimes every year?
Yes, salaried individuals can switch between old and new regimes every financial year. However, individuals with business income can switch only once.
Is tax on salary different from tax on business income?
The tax slabs are the same, but salaried individuals get standard deduction (₹50,000) while business owners can claim business expenses as deductions.
What if I forget to claim deductions while filing?
You can file a revised return within the deadline (December 31 of the assessment year) to claim missed deductions and get a refund.
Frequently Asked Questions
Yes, Income Tax Calculator (India) is totally free :)
Yes, you can install the webapp as PWA.
Yes, any data related to Income Tax Calculator (India) only stored in your browser (if storage required). You can simply clear browser cache to clear all the stored data. We do not store any data on server.
The Old Tax Regime allows various deductions and exemptions (like Section 80C, HRA, LTA) with higher tax rates, while the New Tax Regime offers lower tax rates but with minimal deductions. The New Regime is simplified with fewer exemptions, making it beneficial for those with limited investments. You can choose the regime that results in lower tax based on your deductions.
Section 87A provides a tax rebate for individuals with taxable income up to ₹7,00,000 (FY 2023-24 onwards under New Regime) and ₹5,00,000 under Old Regime. The rebate amount is up to ₹25,000 under New Regime and ₹12,500 under Old Regime. This means if your taxable income is within these limits, your final tax liability could be zero after applying the rebate.
Section 80C allows deductions up to ₹1,50,000 for investments in Employee Provident Fund (EPF), Public Provident Fund (PPF), Equity Linked Savings Scheme (ELSS), National Savings Certificate (NSC), life insurance premiums, principal repayment of home loan, children's tuition fees, and tax-saving fixed deposits. These deductions are only available under the Old Tax Regime.
Health and Education Cess is charged at 4% on the total income tax amount (before cess). For example, if your income tax is ₹1,00,000, the cess would be ₹4,000 (4% of ₹1,00,000), making your total tax liability ₹1,04,000. This cess is applicable under both Old and New Tax Regimes.
Standard deduction of ₹50,000 is available to salaried individuals under both Old and New Tax Regimes. This deduction is automatically applied to reduce your gross income before calculating taxable income. It replaced the earlier transport allowance and medical reimbursement benefits.
The choice depends on your deductions. If you have significant investments under Section 80C (₹1.5 lakh), home loan interest, HRA, or other deductions exceeding ₹2-2.5 lakh, the Old Regime typically saves more tax. If you have minimal deductions, the New Regime with lower tax rates is usually better. Use our calculator to compare both regimes and see which one results in lower tax for your specific situation.