Income Tax Calculator India

Assessment Year (AY) 2025-26 corresponds to Financial Year (FY) 2024-25 — income earned between 1 April 2024 and 31 March 2025. AY 2026-27 corresponds to FY 2025-26 — income earned between 1 April 2025 and 31 March 2026. The Tax Year (TY) is sometimes used interchangeably with AY in modern usage following the Income Tax Bill 2025.

Under New Regime AY 2025-26, the basic exemption is ₹3 lakh, slabs go up to 30% above ₹15 lakh, and 87A rebate is up to ₹25,000 making tax zero up to ₹7 lakh taxable income. Under New Regime AY 2026-27 (Budget 2025 changes), the basic exemption was raised to ₹4 lakh, an additional 25% slab was introduced between ₹20-24 lakh, and the rebate u/s 87A was raised to ₹60,000 — making tax zero up to ₹12 lakh taxable income.

The Old Regime slabs and deductions remain unchanged across AY 2025-26 and AY 2026-27. Both regimes get a standard deduction (₹75,000 New, ₹50,000 Old) on salary income, and 80CCD(2) employer NPS contributions remain deductible in both regimes.

House Rent Allowance (HRA) exemption under Section 10(13A) is the LEAST of three amounts: (1) actual HRA received from your employer; (2) rent paid minus 10% of (Basic + DA); (3) 50% of (Basic + DA) for metros (Mumbai, Delhi, Chennai, Kolkata) or 40% for other cities. This calculator computes all three and applies the minimum automatically.

HRA exemption is only available in the Old Regime. If you opt for the New Regime, the entire HRA received becomes taxable as part of salary. For most metro tenants paying realistic market rent, HRA exemption can save ₹50,000-2,00,000 of tax annually, which often tips the scale toward the Old Regime.

Important nuance: the rent agreement must be in your name, and rent above ₹1 lakh per year requires the landlord's PAN. Rent paid to parents is allowed but must be genuine — declared as their income — and supported by bank transfers, not cash.

Equity Short Term Capital Gains (STCG under Sec 111A) on listed shares and equity mutual funds held under 12 months are taxed at a flat 20% (raised from 15% effective transactions on or after 23 July 2024). This rate is independent of your income slab and is not eligible for the 87A rebate.

Equity Long Term Capital Gains (LTCG under Sec 112A) on listed shares and equity mutual funds held over 12 months are taxed at 12.5% (raised from 10%) on the amount exceeding the ₹1.25 lakh annual exemption (raised from ₹1 lakh). Other LTCG (property, debt funds, etc.) are taxed at 12.5% without indexation, with a one-time choice of 20% with indexation for property bought before 23 July 2024.

Surcharge on capital gains income under sections 111A, 112, 112A and on dividend income is capped at 15% even when the rest of your income falls in a higher surcharge bracket — this calculator applies the cap automatically.

Surcharge is an additional tax on tax for high incomes. New Regime surcharge: 10% on income ₹50L-1Cr, 15% on ₹1Cr-2Cr, and 25% above ₹2Cr (no 37% slab — it was abolished for the New Regime). Old Regime continues with 10/15/25/37% across the same boundaries with the maximum 37% kicking in above ₹5Cr.

Marginal Relief ensures you do not lose more in tax than the income increase that triggered the higher surcharge. For example, if your income just crosses ₹50 lakh, the surcharge increase cannot exceed the extra income above ₹50 lakh. The calculator computes this automatically at every threshold (₹50L, ₹1Cr, ₹2Cr, ₹5Cr) using the strict legal formula based on slab tax at the threshold value.

Health & Education Cess of 4% applies on the sum of (income tax + surcharge) under both regimes. It is not optional and is collected to fund education and healthcare. Total tax payable = base tax − 87A rebate + surcharge (regular + capped CG) − marginal relief + 4% cess.

Salaried individuals in India can use this calculator by entering gross annual salary including basic pay, dearness allowance (DA), house rent allowance (HRA), special allowance, leave travel allowance (LTA), and bonus. The standard deduction of ₹75,000 (New Regime) or ₹50,000 (Old Regime) is applied automatically — you do not need to subtract it manually.

If you receive HRA and pay rent, switch to Old Regime to claim HRA exemption under Section 10(13A). Enter your annual Basic + DA, HRA received, rent paid, and select metro/non-metro. The calculator applies the least-of-three rule (HRA received / rent − 10% of Basic+DA / 50% or 40% of Basic+DA) automatically. For most metro renters, HRA exemption alone saves ₹50,000-₹2,00,000 of tax per year.

After entering salary, add any 80C investments (EPF, PPF, ELSS, life insurance, principal repayment, tuition fees) up to ₹1.5 lakh, an additional ₹50,000 NPS contribution under 80CCD(1B), medical insurance premiums under 80D (₹25,000 self+family + ₹25,000 parents, or ₹50,000 each if senior citizen), and home loan interest up to ₹2 lakh under Section 24(b). The calculator instantly compares both regimes and tells you which one delivers higher in-hand salary.

Senior citizens aged 60 to 79 enjoy a higher basic exemption of ₹3 lakh under Old Regime (vs ₹2.5 lakh for individuals below 60). Super senior citizens aged 80 and above get ₹5 lakh exemption under Old Regime — no tax up to ₹5 lakh income. Use the age toggle in the Profile section to apply the correct slab automatically.

Senior citizens can also claim Section 80TTB deduction of up to ₹50,000 on bank/post office interest income (vs ₹10,000 under 80TTA for non-seniors). Health insurance premium deduction under 80D goes up to ₹50,000 for self if senior + ₹50,000 for senior parents — total possible ₹1 lakh under 80D. Section 80DDB allows deduction up to ₹1 lakh for specified critical illnesses for seniors.

Senior citizens with only pension and interest income aged 75+ may be exempt from filing returns altogether under Section 194P if income is verified by the bank. The New Regime rates and standard deduction (₹75,000) apply identically to all age groups — Old Regime is the only regime where age-based slabs differ.

To claim HRA exemption you need: (1) you must actually pay rent and have a valid rent agreement, (2) you cannot claim HRA on a property you own, (3) for annual rent above ₹1 lakh, the landlord's PAN is mandatory in Form 12BB. Rent paid to parents is allowed if it is genuine and they declare it in their ITR.

Switch this calculator to Old Regime, then enter Basic + DA (annual), HRA received (annual), rent paid (annual), and your city type. The calculator returns the exempt portion which is auto-deducted from your taxable salary. The actual HRA exempt is the LEAST of the three: actual HRA / rent paid − 10% Basic+DA / 50% Basic+DA (metro) or 40% (non-metro).

Example: Basic+DA ₹6,00,000, HRA received ₹2,40,000, rent paid ₹3,00,000, metro city. Option 1 = ₹2,40,000. Option 2 = ₹3,00,000 − ₹60,000 = ₹2,40,000. Option 3 = 50% × ₹6,00,000 = ₹3,00,000. Exempt = ₹2,40,000 (least of the three).

Tax slabs, rates, rebates, surcharge, and cess used in this calculator are sourced from the official Income Tax Department of India calculator at incometaxindia.gov.in/Pages/tools/income-tax-calculator.aspx, the Income Tax e-filing portal at incometax.gov.in, and validated against ClearTax (cleartax.in/s/income-tax-slabs) and Referencer.in. Capital gains rates reflect Budget 2024 changes effective 23 July 2024.

Methodology: slab tax is computed on taxable income (after standard deduction, HRA exemption, and Chapter VI-A deductions). 87A rebate is applied with marginal relief. STCG 111A and LTCG 112A are computed separately and added. Surcharge applies the regular rate on slab tax and a 15%-capped rate on capital gains tax. Marginal relief on surcharge uses the strict formula based on slab tax at the exact threshold (₹50L / ₹1Cr / ₹2Cr / ₹5Cr).

Disclaimer: This calculator gives a close estimate for planning purposes. Always verify your final tax liability with a qualified Chartered Accountant (CA) or the official Income Tax e-filing portal before filing your ITR. State taxes, professional tax, employer-specific deductions, and edge cases (carry-forward losses, foreign income, agricultural income aggregation) are not modelled.