Income Tax Calculator - New Tax Regime Calculator

An income tax calculator is a simple online tool. Using it, you can calculate how much income tax you need to pay for the Financial Year 2025–26 (Assessment Year 2026–27). The calculator:

• Is based on the new tax regime for FY 2025–26 and
• Has been incorporated with revised income tax slabs (announced in the Union Budget 2025).

This tool is completely free and easy to use. To make accurate tax calculations, all you need to do is enter your:

• Annual income
• Home loan interest
• Principal repayments

After this, the calculator instantly shows your tax liability per the latest income tax slabs. Whether you're a salaried employee, freelancer, or self-employed, you can use this calculator to estimate your income tax liability for FY 2025–26.

Benefits of using the new tax regime calculator

By using an online income tax calculator, you can avoid manual calculations and digitally estimate your income tax liability. This lets you remain compliant and pay the right taxes, which avoids future income tax notices.

For more clarity, let’s see four major reasons why you should use it:

1. Gives results based on the latest law

Usually, manual calculations are confusing and often lead to mistakes. An income tax calculator does all the math for you correctly. It applies the latest income tax slabs and rules. Thus, you get the exact tax amount you must pay.

2. Saves your time and reduces effort

Instead of spending hours on complex calculations, you can use this tool to estimate your income tax liability within seconds. It is quick and convenient. You can use it from your phone or computer at any time.

3. Easy to use

The calculator is designed in a user-friendly way. You just need to enter your income, home loan details, and other basic information. The tool will do the rest and show your tax amount instantly.

4. Lets you do smart tax planning

When you know your tax liability in advance, you can plan your finances better. For example, you can strategically choose between the old and new regimes or invest in tax-saving options (like ELSS, PPF, or NPS).
Moreover, there is no need for expert knowledge! The calculator is simple and can be used by anyone:

• Salaried employees
• Freelancers
• Business owners

How to calculate income tax of a salaried employee?

Calculating income tax is usually confusing for salaried employees. That’s because your salary includes various components like basic pay, HRA, and allowances. On top of it, you may also have deductions or investments that can reduce your taxable income.

Finding it tough? You can estimate your accurate income tax liability by following these five simple steps:

Step 1: Calculate gross income

Gross income is your total earnings before any tax deductions. It includes your:

• Basic salary
• House Rent Allowance (HRA)
• Leave Travel Allowance (LTA)
• Bonuses
• Other allowances

Please note that some parts of your salary (like HRA and LTA) can be exempt from tax if certain conditions are met. If we specifically talk about HRA, the exempt amount is the least of the following:

• Actual HRA received from your employer
• Rent paid minus 10% of your basic salary + DA
• 50% of your basic salary (if you live in a metro city)
• 40% of your basic salary (if you live in a non-metro city)

Now, subtract this exempt amount from your salary. Also, subtract the standard deduction of Rs. 75,000 (new regime) or Rs. 50,000 (old regime).

Once these deductions are done, add income from other sources (like interest from fixed deposits or rental income). The amount you get is your gross income.

Step 2: Calculate net taxable income

After knowing your gross income, now reduce it further using deductions allowed under the old tax regime. If you choose the new tax regime, most deductions are not allowed except for a few, like NPS (employer contribution) and Section 80CCD(2).

But if you are using the old tax regime, here are the major deductions you can claim:

Section 80C

You can claim deductions up to Rs. 1.5 lakh under this section. It includes:

• Public Provident Fund (PPF)
• Life insurance premiums
• ELSS mutual funds
• EPF (employee contribution)
• Principal repayment of a home loan
• Tuition fees for children

Section 80CCD

An extra Rs. 50,000 deduction is available for investments in the National Pension System (NPS). This is over and above the Rs. 1.5 lakh limit of Section 80C.

Section 80D

You can claim deductions for health insurance premiums:

• Rs. 25,000 for your family (self, spouse, children)
• Extra Rs. 25,000 for parents (if below 60 years)
• Rs. 50,000 for senior citizen parents

The maximum deduction you can claim under this section is Rs. 1,00,000.

Section 80DD

It covers medical expenses for disabled dependents. You can claim up to Rs. 1.25 lakh based on the severity of the disability.

Section 80E

It covers interest paid on an education loan. This deduction can be claimed for up to 8 years.

Now, add all these eligible deductions and subtract the total from your gross income. By doing so, you get your net taxable income.

Step 3: Apply income tax slabs

In this step, apply the correct income tax slab to your net taxable income. You can choose between the old tax regime and the new tax regime. Be aware that each has different rules and slabs:

• The old regime allows deductions (like 80C, 80D, 80E).
• The new regime has lower tax rates but fewer deductions.

You can use an income tax calculator to enter your net taxable income. It will apply the correct tax rate based on the slab you fall into. This gives you your basic tax amount.

Step 4: Calculate the tax payable

Now that you know your tax slab and base tax amount, add 4% Health and Education Cess to the amount. For example,

• Say your tax comes to Rs. 50,000.
• Now, cess would be Rs. 2,000 (4% of Rs. 50,000)
• This makes your total tax Rs. 52,000.

The income tax calculator does this automatically. You just need to check your total tax payable as shown by the tool.

Step 5: Consolidate and apply tax rebate (if eligible)

per the Income Tax Act, you are also eligible for a tax rebate under Section 87A. Let’s see how it differs under both old and new regimes:

The income tax calculator checks the eligibility for a tax rebate automatically. If you're eligible, it subtracts the rebate from your total tax and shows your final tax payable.

Income Tax Calculator FY 2026-2027: Calculate your taxes per slab rate after Budget 2026; New Tax Regime vs. Old Tax Regime

Use an income tax calculator to estimate your tax liability for FY 2026–2027 based on slab rates announced in Budget 2026. It compares old and new tax regimes for incomes from Rs 6 lakh to Rs 1 crore without considering deductions.

Income tax calculator (Old Tax Regime vs. New Tax Regime) for FY 2025-26

Budget 2026 income tax highlights: Changes in taxation

Finance Minister Nirmala Sitharaman, in the Union Budget 2026, introduced several important updates for taxpayers. While the tax slabs and standard deduction remain unchanged for FY 2026–2027, a number of procedural and compliance-related changes have been announced. These updates aim to simplify taxation, improve transparency, and reduce the burden on taxpayers. Below are the key highlights you should know.

1. New Income Tax Act effective from April 1, 2026

A new Income Tax Act will come into effect from 01 April 2026. The government plans to introduce simplified rules and redesigned forms to make tax filing easier and more user-friendly for individuals, reducing confusion and improving compliance.

2. Reduction of TCS rates

Budget 2026 has reduced Tax Collected at Source (TCS) rates in key areas. TCS on international tour packages is now set at a flat 2%. Similarly, remittances under the Liberalised Remittance Scheme for education and medical needs will attract a reduced TCS rate of 2%.

3. Extension of revised ITR filing deadline

Taxpayers now have more time to correct their filed returns. The deadline to submit a revised income tax return has been extended from 31 December to 31 March, subject to payment of a small fee.

4. No change in income tax slabs

There is no change in income tax slab rates for FY 2026–2027. The government has retained the existing structure under both tax regimes, ensuring continuity and predictability for taxpayers across all income groups.

A. New Income Tax Regime slab for FY 2026–27

Under the new regime, tax rates are uniform for all individuals, regardless of age. Income up to Rs 4,00,000 is tax-free. Rates increase gradually from 5% to 30% for higher income brackets. Tax rebate under Section 87A ensures zero tax up to Rs 12 lakh taxable income, along with a standard deduction of Rs 75,000 for salaried individuals.

B. Old Income Tax Regime slab for FY 2026-27

The old regime continues to offer different exemption limits based on age. Individuals below 60 years, senior citizens, and super senior citizens have varying tax-free thresholds. Tax rates range from 5% to 30%, depending on income levels.

5. PAN-based TDS for NRI property sales

For property transactions involving non-resident sellers, TDS can now be deducted using the buyer’s PAN. This removes the need for obtaining a separate TAN, making the process simpler for resident buyers.

6. Taxation of Sovereign Gold Bonds (SGBs)

Tax exemption on maturity proceeds of Sovereign Gold Bonds will continue only for bonds bought during the original issue. Bonds purchased from the secondary market will now attract tax on gains at maturity.

7. Buyback of shares

Income from share buybacks will now be treated as capital gains in the hands of investors. Tax rates will vary depending on whether the shareholder is a corporate or non-corporate entity, helping reduce tax avoidance opportunities.

8. Customs duty on personal imports

Customs duty on imported goods meant for personal use has been reduced from 20% to 10%. This change is expected to make personal imports more affordable for individuals.

9. Securities transaction tax (STT) on futures & options

STT rates on derivatives trading have been revised. Futures transactions will attract higher tax, while options trading will also see an increase in tax on premiums and exercise, slightly raising trading costs.

10. Automated process of getting NIL deduction certificate

A new automated system will allow eligible taxpayers to obtain lower or NIL TDS certificates without manual intervention. This rule-based process removes the need to approach tax officers, making it faster and more efficient.

11. Clarification of TDS provisions for manpower supply services

TDS rules for manpower services have been clarified by bringing them under contractor payments. This ensures uniform application of TDS rates and removes confusion regarding applicable provisions.

12. Depositories to accept Form 15G/15H

Depositories will now be allowed to collect Form 15G and Form 15H on behalf of investors and share them with companies. This eliminates the need to submit these forms multiple times across different institutions.

13. Individual ITR due dates remain unchanged

The due date for filing individual income tax returns remains 31 July. However, certain entities such as businesses not requiring audit and trusts may get time until 31 August to file their returns.

14. Foreign asset disclosure scheme

A one-time foreign asset disclosure scheme has been introduced for a period of six months. It is aimed at small taxpayers, including students and professionals with overseas exposure.

Under this scheme, individuals who have not disclosed foreign income or assets up to Rs 1 crore can regularise them by paying applicable tax and an additional amount in place of penalties, with protection from prosecution.

For those who have declared income but missed reporting assets up to Rs 5 crore, immunity from penalties and legal action is available upon payment of a fixed fee.

Latest income tax slab and rates for FY 2025-26 (AY 2026-27)

The new tax regime offers lower tax rates but does not allow most deductions and exemptions like 80C, 80D, 80E, etc. In Budget 2023, the government made the new regime the default option from FY 2023–24 onwards. It also allowed a standard deduction of Rs. 50,000 and gave a tax rebate on income up to Rs. 7 lakh.

In the Union Budget 2025, the government made more changes. They particularly revised the tax slabs for FY 2025–26. Now, the top 30% tax rate will apply only when your income exceeds Rs. 24 lakh (compared to Rs. 15 lakh earlier).

For more clarity, let’s check out the new tax regime slabs for FY 2025–26 (AY 2026–27) in the table below:

Additionally, those earning up to Rs. 12 lakh can get a rebate of up to Rs. 60,000 under Section 87A. This can bring your final tax to zero (depending on your exact income and calculations).

Benefits of using income tax calculator

By using an online income tax calculator, you can avoid manual calculations and digitally estimate your income tax liability. This lets you remain compliant and pay the right taxes, which avoids future income tax notices.

For more clarity, let’s see four major reasons why you should use it:

1. Gives results based on the latest law

Usually, manual calculations are confusing and often lead to mistakes. An income tax calculator does all the math for you correctly. It applies the latest income tax slabs and rules. Thus, you get the exact tax amount you must pay.

2. Saves your time and reduces effort

Instead of spending hours on complex calculations, you can use this tool to estimate your income tax liability within seconds. It is quick and convenient. You can use it from your phone or computer at any time.

3. Easy to use

The calculator is designed in a user-friendly way. You just need to enter your income, home loan details, and other basic information. The tool will do the rest and show your tax amount instantly.

4. Lets you do smart tax planning

When you know your tax liability in advance, you can plan your finances better. For example, you can strategically choose between the old and new regimes or invest in tax-saving options (like ELSS, PPF, or NPS).
Moreover, there is no need for expert knowledge! The calculator is simple and can be used by anyone:

• Salaried employees
• Freelancers
• Business owners

How to calculate income tax of a salaried employee?

Calculating income tax is usually confusing for salaried employees. That’s because your salary includes various components like basic pay, HRA, and allowances. On top of it, you may also have deductions or investments that can reduce your taxable income.

Finding it tough? You can estimate your accurate income tax liability by following these five simple steps:

Step 1: Calculate gross income

Gross income is your total earnings before any tax deductions. It includes your:

• Basic salary
• House Rent Allowance (HRA)
• Leave Travel Allowance (LTA)
• Bonuses
• Other allowances

Please note that some parts of your salary (like HRA and LTA) can be exempt from tax if certain conditions are met. If we specifically talk about HRA, the exempt amount is the least of the following:

• Actual HRA received from your employer
• Rent paid minus 10% of your basic salary + DA
• 50% of your basic salary (if you live in a metro city)
• 40% of your basic salary (if you live in a non-metro city)

Now, subtract this exempt amount from your salary. Also, subtract the standard deduction of Rs. 75,000 (new regime) or Rs. 50,000 (old regime).

Once these deductions are done, add income from other sources (like interest from fixed deposits or rental income). The amount you get is your gross income.

Step 2: Calculate net taxable income

After knowing your gross income, now reduce it further using deductions allowed under the old tax regime. If you choose the new tax regime, most deductions are not allowed except for a few, like NPS (employer contribution) and Section 80CCD(2).

But if you are using the old tax regime, here are the major deductions you can claim:

Section 80C

You can claim deductions up to Rs. 1.5 lakh under this section. It includes:

• Public Provident Fund (PPF)
• Life insurance premiums
• ELSS mutual funds
• EPF (employee contribution)
• Principal repayment of a home loan
• Tuition fees for children

Section 80CCD

An extra Rs. 50,000 deduction is available for investments in the National Pension System (NPS). This is over and above the Rs. 1.5 lakh limit of Section 80C.

Section 80D

You can claim deductions for health insurance premiums:

• Rs. 25,000 for your family (self, spouse, children)
• Extra Rs. 25,000 for parents (if below 60 years)
• Rs. 50,000 for senior citizen parents

The maximum deduction you can claim under this section is Rs. 1,00,000.

Section 80DD

It covers medical expenses for disabled dependents. You can claim up to Rs. 1.25 lakh based on the severity of the disability.

Section 80E

It covers interest paid on an education loan. This deduction can be claimed for up to 8 years.

Now, add all these eligible deductions and subtract the total from your gross income. By doing so, you get your net taxable income.

Step 3: Apply income tax slabs

In this step, apply the correct income tax slab to your net taxable income. You can choose between the old tax regime and the new tax regime. Be aware that each has different rules and slabs:

• The old regime allows deductions (like 80C, 80D, 80E).
• The new regime has lower tax rates but fewer deductions.

You can use an income tax calculator to enter your net taxable income. It will apply the correct tax rate based on the slab you fall into. This gives you your basic tax amount.

Step 4: Calculate the tax payable

Now that you know your tax slab and base tax amount, add 4% Health and Education Cess to the amount. For example,

• Say your tax comes to Rs. 50,000.
• Now, cess would be Rs. 2,000 (4% of Rs. 50,000)
• This makes your total tax Rs. 52,000.

The income tax calculator does this automatically. You just need to check your total tax payable as shown by the tool.

Step 5: Consolidate and apply tax rebate (if eligible)

As per the Income Tax Act, you are also eligible for a tax rebate under Section 87A. Let’s see how it differs under both old and new regimes:

The income tax calculator checks the eligibility for a tax rebate automatically. If you're eligible, it subtracts the rebate from your total tax and shows your final tax payable.

Income tax calculation salaried employees: Understand income tax calculation under both old and new tax regimes

Understanding how income tax is calculated for salaried individuals becomes much easier when you break it down step by step. Under the new tax regime, salary structure, exemptions, deductions, and applicable tax rates together determine your final tax liability. Below is a clear explanation using a practical example, along with tables to help you visualise the calculation under both the old and new tax regimes.

What counts as income from salary

Your salary income usually includes multiple components. These commonly consist of basic salary, house rent allowance (HRA), special allowance, transport allowance, and other allowances paid by your employer. While most of these are fully taxable, certain components may be partly or fully exempt, depending on the conditions.

Some reimbursements, such as telephone bill reimbursements or leave travel allowance (LTA), may qualify for tax exemption if specific rules are met. If you receive HRA and live in a rented house, you can claim an HRA exemption based on rent paid, salary, and city of residence. The exempt portion can be worked out using an HRA calculator.

In addition, a standard deduction is available to salaried individuals. Under the old tax regime, the standard deduction is Rs. 50,000, while under the new tax regime, it is Rs. 75,000.

To understand this better, let us look at an example.

Example: Salary details of Nidhi

Nidhi earns a basic salary of Rs. 1,00,000 per month. She also receives HRA of Rs. 50,000 per month, a special allowance of Rs. 21,000 per month, and LTA of Rs. 20,000 in a year. She lives in Delhi and pays a monthly rent of Rs. 40,000.

Table 1: Salary breakup and taxable income

Additional income and deductions: Nidhi also earns interest income of Rs. 8,000 from a savings account and Rs. 12,000 from fixed deposits. She has made tax-saving investments such as PPF, ELSS, and LIC premiums, and has paid medical insurance premiums. These deductions are allowed only under the old tax regime.

Table 2: Deductions claimed under old tax regime

Table 3: Tax calculation – Old tax regime

Table 4: Tax calculation – New tax regime

This comparison clearly shows how the availability of exemptions and deductions impacts your taxable income and overall tax payable under each regime.

The data generated herein is completely and solely based on the information/ details provided by you in response to the questions specified by Bajaj Finserv Limited. These questions and the calculations thereon resulting in specific data are developed and based on certain tools and calculators that are made available to Bajaj Finserv Limited and are based on predetermined presumptions/ assumptions. Such information and the resultant data are provided only for user's convenience and information purposes.