Income Tax Calculator
Calculate your exact income tax from salary, exemptions and deductions for the new or old regime (FY 2025-26).
Formula last reviewed 15 September 2026 · How we verify our calculators
Total tax payable (new regime)
- Taxable income
- ₹11,25,000
- Income tax (after 87A rebate)
- ₹0
- Surcharge
- ₹0
- Health & education cess (4%)
- ₹0
- Effective tax rate
- 0.0%
- Annual take-home
- ₹12,00,000
- Monthly take-home
- ₹1,00,000
Updates live as you type
Frequently asked questions
Two provisions combine. The standard deduction of 75,000 brings a 12,00,000 salary down to 11,25,000 of taxable income, on which the new regime slabs charge 52,500. The Section 87A rebate then applies, because taxable income is at or below 12,00,000, and it covers up to 60,000 — wiping out the whole 52,500. This is why the effective zero-tax point under the new regime sits at 12,75,000 of gross salary rather than at 12,00,000.
Marginal relief protects you. The 87A rebate disappears entirely once taxable income exceeds 12,00,000, so without a corrective mechanism a small raise could cost far more in tax than it delivered in income. Marginal relief caps the tax at the amount by which your income exceeds the threshold. At 12,10,000 of taxable income the tax works out to 10,400 including cess rather than the much larger figure the slabs alone would produce.
The new regime has been the default since FY 2023-24. If you do nothing, it applies. Electing the old regime is now an active choice, made by informing your employer at the start of the year and, where applicable, filing Form 10-IEA. This is a reversal of how the choice worked when the new regime was introduced, and it still catches people who assume their long-standing old-regime deductions are being applied automatically.
If you have only salary income, yes — every year, and you can even switch at filing time regardless of what you told your employer in April. The only consequence of a mismatch is that your TDS was calculated on the other basis, producing a refund or a balance due. Taxpayers with business or professional income are treated differently: they may switch from old back to new once, and after that the choice is locked.
Through six steps. Salary exemptions such as HRA come off first under the old regime; the standard deduction follows at 75,000 in the new regime or 50,000 in the old; other income is added to give gross total income; Chapter VI-A deductions come off to give total income; slab tax is charged band by band and reduced by the 87A rebate; then surcharge above 50 lakh and 4% cess are added. Each step feeds the next, which is why a single wrong figure early on propagates through the whole calculation.
No, and this is probably the most widespread misunderstanding about Indian income tax. Slab rates are marginal: only the portion of income falling inside a band is taxed at that band's rate. Someone with 25,00,000 of taxable income pays nil on the first 4,00,000, 5% on the next 4,00,000, and so on, reaching 30% only on the amount above 24,00,000. Their effective rate across the whole income is closer to 18% than to 30%.
75,000 under the new regime and 50,000 under the old. It applies automatically to salary and pension income with no investment, receipt or proof required, and it is the single largest reason the new regime performs well at middle incomes. Note that it is a deduction from salary specifically — it is not available against business income, rental income or capital gains.
Almost none, with one meaningful exception. Section 80CCD(2), covering employer contributions to NPS up to 14% of basic plus DA, remains deductible under the new regime. Since 80C, 80D, HRA, LTA and home loan interest on a self-occupied property are all withdrawn, restructuring salary to include an employer NPS contribution is effectively the only remaining tax-planning lever for new-regime taxpayers, and it is widely overlooked.
Not to gains taxed at special rates. Capital gains under Sections 111A and 112A are charged at their own rates outside the slab system, and the rebate cannot be used to offset that tax. So a taxpayer with 11,00,000 of salary and 3,00,000 of equity gains does not reach a nil liability — the salary portion may be rebated, but the tax on the gains stands. This calculator handles salary and slab-rate income; use the capital gains calculator for the rest.
Why a ₹12 lakh salary can attract zero tax
Earn ₹12,00,000 a year and, under the new regime for FY 2025-26, your income tax is ₹0. Not a small amount — nothing. The standard deduction of ₹75,000 brings taxable income to ₹11,25,000, the slabs charge ₹52,500 on that, and the Section 87A rebate then wipes the whole ₹52,500 out.
Earn ₹12,50,000 and the rebate vanishes entirely, because it is available only up to ₹12,00,000 of taxable income. Without a corrective mechanism a ₹50,000 raise would have cost far more in tax than it delivered in salary — which is why marginal relief exists, capping the extra tax at the extra income. Understanding these two provisions explains most of the surprising results people get near this threshold.
Income tax in India is charged on your total income for a financial year running 1 April to 31 March, using slab rates that rise in bands. Since FY 2023-24 the new regime is the default; you must actively opt for the old one. The new regime offers wider, lower slabs and a larger standard deduction but withdraws almost every exemption and deduction. The old regime keeps them all but taxes at higher rates in narrower bands.
The six steps between gross salary and tax paid
Every income tax calculation, however complicated the inputs, runs the same sequence.
1. Salary exemptions come off first. Under the old regime, HRA exemption under Section 10(13A) and LTA are removed at the salary stage. Under the new regime they are not available at all.
2. Standard deduction. ₹75,000 in the new regime, ₹50,000 in the old. It is automatic and requires no proof.
3. Add other heads of income. Interest, rent, capital gains, business or professional income. What remains is gross total income.
4. Chapter VI-A deductions. Sections 80C, 80D, 80CCD(1B), 80E, 80G and the rest — old regime only, with the narrow exception of 80CCD(2) for employer NPS contributions, which survives in both. The result is total income, the figure the slabs actually apply to.
5. Slab tax, then the Section 87A rebate. Tax is charged band by band, not at a single rate on the whole amount. The rebate then reduces it: up to ₹60,000 if taxable income is ₹12,00,000 or less (new regime), or up to ₹12,500 if it is ₹5,00,000 or less (old).
6. Surcharge and cess. Surcharge applies above ₹50,00,000 of total income, then 4% health and education cess on everything.
The slabs for FY 2025-26, new regime:
- Up to ₹4,00,000 — nil
- ₹4,00,001 to ₹8,00,000 — 5%
- ₹8,00,001 to ₹12,00,000 — 10%
- ₹12,00,001 to ₹16,00,000 — 15%
- ₹16,00,001 to ₹20,00,000 — 20%
- ₹20,00,001 to ₹24,00,000 — 25%
- Above ₹24,00,000 — 30%
Old regime, under 60: nil to ₹2,50,000, then 5% to ₹5,00,000, 20% to ₹10,00,000, and 30% above.
A ₹12 lakh salary, worked through both regimes
Take the calculator's defaults: gross salary ₹12,00,000, basic ₹8,00,000, HRA received ₹2,00,000, rent paid ₹1,80,000 in a metro, plus 80C of ₹1,50,000, 80D of ₹25,000 and other deductions of ₹50,000.
New regime.
Salary ₹12,00,000 − standard deduction ₹75,000 = ₹11,25,000 taxable. No other deduction applies.
Slab by slab: the first ₹4,00,000 is nil. The next ₹4,00,000 at 5% = ₹20,000. The remaining ₹3,25,000 at 10% = ₹32,500. Total ₹52,500.
Taxable income is under ₹12,00,000, so the 87A rebate applies — up to ₹60,000, here covering the full ₹52,500. Tax after rebate: ₹0. No cess on nothing. Total tax: ₹0.
Old regime.
HRA exemption is the least of: HRA received ₹2,00,000; rent minus 10% of basic (₹1,80,000 − ₹80,000) = ₹1,00,000; 50% of basic = ₹4,00,000. The least is ₹1,00,000.
Salary ₹12,00,000 − ₹1,00,000 HRA − ₹50,000 standard deduction = ₹10,50,000. Less Chapter VI-A deductions of ₹2,25,000 = ₹8,25,000 total income.
Slab by slab: nil to ₹2,50,000. Next ₹2,50,000 at 5% = ₹12,500. Remaining ₹3,25,000 at 20% = ₹65,000. Total ₹77,500. Add 4% cess = ₹3,100. Total tax: ₹80,600.
The new regime is better here by ₹80,600 — and note how it wins. It is not that the old regime's deductions are small; they total ₹3,25,000 including HRA. It is that the new regime's zero-tax threshold has risen far enough that ₹12 lakh escapes tax entirely.
When to run this
Before the April declaration. Most employers ask you to choose a regime at the start of the year and deduct TDS accordingly. Choosing badly means an over- or under-deduction you carry all year.
Whenever your rent, home loan or 80C position changes materially. Those are the inputs that move the old regime's case.
Before a bonus or a raise near ₹12,00,000. This is where marginal relief and the rebate interact in ways that are genuinely unintuitive.
Before filing. You may switch regimes at filing if you have only salary income, whatever you told your employer in April.
Reading the result
The figure is your liability for the year, not what you still owe. Subtract the TDS already deducted on your payslips and any advance tax paid to see where you stand.
The comparison between regimes is only as good as the deductions you actually claim. People routinely enter the ₹1,50,000 80C maximum when their real contributions are ₹60,000 — which flatters the old regime and can flip the recommendation. Enter what you will genuinely invest and document.
Two things this calculation deliberately does not cover: surcharge above ₹50,00,000, which is applied here in simplified form without the full marginal relief workings at each threshold, and capital gains taxed at special rates, which sit outside the slab system altogether and are not reduced by the 87A rebate.
Where people go wrong
Assuming the whole income is taxed at the top slab rate. Reaching the 30% band does not mean paying 30% on everything — only on the portion above the threshold. Someone with ₹25,00,000 of taxable income pays an effective rate closer to 18%.
Forgetting the new regime is the default. Doing nothing means the new regime applies. If the old one suits you, you must say so.
Believing the regime choice is permanent. Salaried taxpayers may switch each year at filing. Those with business income get one switch back to the new regime and then are locked.
Entering aspirational deductions. 80C at its ceiling, 80D you never paid, rent without receipts — all inflate the old regime's case and none survive scrutiny.
Missing 80CCD(2). Employer NPS contributions up to 14% of basic remain deductible in the new regime, and it is the only meaningful deduction that does.
Overlooking that the rebate cannot offset special-rate tax. Capital gains taxed under Sections 111A or 112A are outside the rebate, so a taxpayer with ₹11,00,000 of salary and ₹3,00,000 of equity gains does not get a nil bill.
Ignoring the advance tax schedule. If your liability after TDS exceeds ₹10,000, advance tax is due in four instalments, and interest under Sections 234B and 234C accrues on shortfalls.
Assuming the financial year and assessment year are the same thing. Income earned between 1 April 2025 and 31 March 2026 belongs to FY 2025-26, which is assessed in AY 2026-27. Return forms, tax-payment challans and the e-filing portal all ask for the assessment year, so selecting the financial year instead is a routine error — and one that deposits your money against the wrong year, producing a demand for the year you thought you had paid.
Sources
- Income Tax Department, Government of India — slab rates and Section 87A rebate, FY 2025-26
- Union Budget 2025-26 — new tax regime slab and standard deduction changes