Tax season can often feel overwhelming, but with the right tools, calculating your tax liability can be a seamless process. The Income Tax Calculator for FY 2025-26 helps individuals estimate their taxes accurately while comparing the benefits of both old and new tax regimes.
Key Highlights of Budget 2025
- No income tax for individuals earning up to Rs. 12 lakhs due to a rebate of Rs. 60,000 under the new regime.
- Revised tax slabs under the new regime:
- Up to Rs. 4,00,000 – NIL
- Rs. 4,00,001 – Rs. 8,00,000 – 5%
- Rs. 8,00,001 – Rs. 12,00,000 – 10%
- Rs. 12,00,001 – Rs. 16,00,000 – 15%
- Rs. 16,00,001 – Rs. 20,00,000 – 20%
- Rs. 20,00,001 – Rs. 24,00,000 – 25%
- Above Rs. 24,00,000 – 30%
What is the Income Tax Calculator?
The Income Tax Calculator is an easy-to-use tool that allows individuals to determine their tax liability based on their income details. This calculator provides a comparative analysis of the old and new tax regimes to help taxpayers make informed financial decisions.
How to Use the Income Tax Calculator?
Follow these steps to calculate your tax liability:
- Select the financial year for which taxes need to be calculated.
- Choose your age group (since the old tax regime has different slabs based on age).
- Enter your salary details after adjusting for exemptions (HRA, LTA, etc.).
- Include additional income sources (rental income, interest from savings, digital assets, etc.).
- Input tax-saving investments under Sections 80C, 80D, 80G, etc. (for the old regime).
- Click ‘Calculate’ to compare tax liabilities under both regimes.
Example: Tax Calculation for FY 2025-26
Let’s consider Neha, who earns Rs. 12,00,000 per year as her basic salary and receives additional benefits such as HRA, Special Allowance, and LTA.
Old Regime Calculation:
- Gross Income: Rs. 16,50,000
- Exemptions & Deductions (HRA, 80C, 80D, etc.): Rs. 1,70,000
- Taxable Income: Rs. 15,00,000
- Tax Payable (including cess): Rs. 2,73,000
New Regime Calculation:
- Gross Income: Rs. 19,97,000
- Standard Deduction: Rs. 75,000
- Taxable Income: Rs. 19,42,000
- Tax Payable (including cess): Rs. 2,83,504
Key Takeaways:
- The new regime offers lower tax rates but fewer deductions.
- The old regime benefits those with high investments in tax-saving instruments.
- The new rebate of Rs. 60,000 eliminates tax for incomes up to Rs. 12 lakhs.
Choosing Between the Old and New Regimes
- Opt for the new regime if you prefer lower tax rates without the hassle of multiple deductions.
- Stick with the old regime if you have significant tax-saving investments under Section 80C, 80D, etc.
Conclusion
With the revised Income Tax Slabs for FY 2025-26, taxpayers now have greater flexibility in tax planning. Using an Income Tax Calculator can simplify the process, ensuring accurate tax computation and better financial decision-making. Whether you opt for the old or new tax regime, staying informed is key to maximizing your tax savings.
