How to Use the Income Tax Calculator?
Using the income tax calculator is simple and efficient. Follow these steps:
Use this estimate for financial planning and tax-saving strategies.
Enter your annual salary in the provided input field.
Click on the ‘Calculate Tax’ button.
The calculator will automatically apply the new tax regime rates and display your total income tax payable.
Adjust your salary input as needed to see different tax amounts based on your income.
Income Tax Calculator (India 2025)
Income tax is a direct tax levied by the Government of India on the earnings of individuals, businesses, and other entities. It is mandatory for eligible taxpayers to file their income tax returns annually. The Union Budget 2025 introduced revised tax slabs under the new tax regime, providing taxpayers with an alternative to the traditional system of deductions and exemptions.
New Tax Regime (Union Budget 2025)
The new tax regime is structured to offer lower tax rates with minimal deductions. The revised tax slabs are as follows:
- Up to ₹4,00,000 - No tax (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%
A standard deduction of ₹75,000 is applicable for all salaried individuals and pensioners, reducing their taxable income.
Old Tax Regime vs. New Tax Regime
Taxpayers can choose between the old tax regime, which offers multiple exemptions and deductions (such as HRA, 80C, 80D), or the new tax regime, which offers lower tax rates but eliminates most deductions.
| Criteria | Old Tax Regime | New Tax Regime |
|---|---|---|
| Lower Tax Rates | ❌ No | ✅ Yes |
| Deductions & Exemptions | ✅ Yes | ❌ No |
| Flexibility | ✅ Yes (if deductions are high) | ✅ Yes (if no deductions needed) |
How to Calculate Your Income Tax?
To determine your tax liability under the new regime:
- Subtract the standard deduction (₹75,000) from your annual salary.
- Apply the tax slabs to the remaining taxable income.
- Compute the total tax payable.
The new tax regime is ideal for individuals who do not claim multiple deductions and want a simpler, lower-tax structure. However, those benefiting from exemptions (like home loan interest, LIC, PF, etc.) may find the old tax regime more beneficial.
The introduction of the new tax regime under the Union Budget 2025 provides an alternative to taxpayers looking for lower tax rates with fewer compliance requirements. Taxpayers must evaluate their financial situation and choose the regime that best suits their needs.
For precise calculations, you can use our Income Tax Calculator to estimate your tax liability under the new tax regime.