What Is an Income Tax Calculator?
An income tax calculator is a web-based utility that computes the estimated tax liability for an individual based on their earnings, applicable deductions, and tax slabs. Whether you are salaried or self-employed, if your annual income exceeds the tax-free threshold, you are liable to pay income tax. You can also choose between the old and new tax regimes, each with distinct benefits.
Tax payments can be made via Tax Deducted at Source (TDS) through salary or by filing returns on the official income tax portal managed by the Central Board of Direct Taxes (CBDT). An online tax calculator helps ensure accuracy and clarity in understanding your tax obligations—whether from salary, rent, investments, or other sources.
This calculator is updated in accordance with the latest provisions introduced in the Union Budget for Financial Year 2025–26 and Assessment Year 2026–27.
Budget 2025: Key Income Tax Updates
The Union Budget for 2025 introduced several updates to the Indian income tax framework:
Rebate Increase: The income tax rebate has been increased from ₹25,000 to ₹60,000. This means individuals with income up to ₹12 lakh under the new regime are not required to pay any tax.
TDS on Rent: The threshold for tax deduction on rent has been raised to ₹50,000 per month.
Senior Citizen Benefit: Tax deduction on interest income for senior citizens has increased from ₹50,000 to ₹1,00,000.
TCS Threshold Raised: Under RBI’s Liberalized Remittance Scheme (LRS), the TCS threshold has been raised from ₹7 lakh to ₹10 lakh. TCS has also been waived for education loans taken through specified institutions.
New Income Tax Slabs (FY 2025–26, AY 2026–27)
| Income Range | Tax Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
How to Use the Income Tax Calculator
To determine your tax liability with the online calculator:
Select the Assessment Year (e.g., AY 2026–27 for FY 2025–26).
Choose your age group to apply the correct exemptions.
Enter your income details, including:
Gross annual salary
Income from house property or other sources
Interest income from savings or deposits
Provide deductions under various sections:
87A, 80C, 80CCD(1B), 80D, 80G, 80E, 80TTA, 80TTB, 80GG, etc.
Enter HRA details: Basic salary, HRA received, and total rent paid.
Specify whether you live in a metro city, which can impact HRA exemption.
Click ‘Calculate’ to instantly view your estimated tax liability under both tax regimes.
Example: Income Tax Calculation (New Regime)
Let’s consider an individual with an annual income of ₹18,00,000 and an additional income of ₹35,000 from other sources.
Calculation:
| Category | Amount |
|---|---|
| Gross Salary | ₹18,00,000 |
| Standard Deduction | ₹75,000 |
| Net Salary After Deduction | ₹17,25,000 |
| Other Income | ₹35,000 |
| Total Taxable Income | ₹17,60,000 |
Tax Liability Under New Regime:
| Tax Slab | Rate | Tax Amount |
|---|---|---|
| Up to ₹4,00,000 | 0% | ₹0 |
| ₹4L to ₹8L | 5% | ₹20,000 |
| ₹8L to ₹12L | 10% | ₹40,000 |
| ₹12L to ₹16L | 15% | ₹60,000 |
| ₹16L to ₹17.6L | 20% | ₹32,000 |
| Total Tax | ₹1,52,000 | |
| Health & Education Cess (4%) | ₹6,080 | |
| Total Tax Payable | ₹1,58,080 |
Benefits of Using an Income Tax Calculator
Accurate: Eliminates errors in manual tax calculations.- Quick & Convenient: Instant results without needing in-depth tax knowledge.
- User-Friendly: Easy interface, accessible anytime.
- Financial Planning: Helps in timely investment planning and savings.
- Privacy-Protected: Keeps your income data secure and confidential.