Tax Calculator 2025

How We Calculate Your Tax

Our calculator follows these steps to compute your tax liability:

1. Income Processing
   • Your entered income is rounded to the nearest ₹10 for consistency
   • For example: ₹1,23,456 becomes ₹1,23,460
2. Standard Deduction
   • Old Regime: ₹50,000 is deducted
   • New & Latest Regime: ₹75,000 is deducted
   • This gives us your taxable income
3. Tax-Free Income Check
   • Latest Regime: No tax if taxable income is below ₹12,00,000
   • Other regimes: Continue to slab calculation
4. Slab-wise Tax Calculation
   • Your taxable income is divided into applicable slabs
   • Each slab's portion is taxed at its specific rate
   • Tax amounts from all slabs are summed up
5. Surcharge Calculation
   • 10% surcharge on tax if income > ₹50 lakh
   • 15% surcharge on tax if income > ₹1 crore
   • 25% surcharge on tax if income > ₹2 crore
   • 37% surcharge on tax if income > ₹5 crore
6. Health and Education Cess
   • 4% of (tax + surcharge) is added as cess
7. Final Rounding
   • Total tax (including surcharge and cess) is rounded to nearest ₹10

Additional Features

• All calculations are shown step-by-step in the detailed breakdown
• The calculator automatically compares all three regimes
• The most beneficial regime is highlighted with a "Best Option" indicator
• For other regimes, the additional tax burden is shown

Union Budget 2025

The Union Budget 2025, presented by Finance Minister Nirmala Sitharaman, introduced significant changes to India's income tax structure for the financial year 2025-26. Here are the key updates:

New Income Tax Slabs

The revised income tax slabs under the new tax regime are as follows:

Income Range (Rs)	Tax Rate (%)
Up to 4,00,000	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

Notably, individuals earning up to ₹12 lakh will not have any income tax liability due to a combination of the new slab rates and available rebates.

Key Features of the New Tax Regime

• Standard Deduction Increase: The standard deduction for salaried individuals has been raised from ₹50,000 to ₹75,000. This effectively allows taxpayers with an income of up to ₹12.75 lakh to pay no tax.
• Tax Rebate Under Section 87A: Taxpayers with taxable income up to ₹7 lakh will benefit from a full rebate under this section.
• Changes in Capital Gains Tax: The tax on short-term capital gains has increased from 15% to 20%, while long-term capital gains tax has risen from 10% to 12.5% for listed shares and equity mutual funds. The exemption threshold for long-term capital gains has also been raised from ₹1 lakh to ₹1.25 lakh.

Additional Provisions

• Homeowners Benefit: Tax relief has been extended for homeowners; now both self-occupied properties can be exempt from taxation on notional rental income.
• Senior Citizens: The deduction limit on interest income for senior citizens has been doubled from ₹50,000 to ₹1 lakh.

These changes aim to simplify tax compliance and provide significant relief to middle-class taxpayers while encouraging savings and investments within the economy.

Comparision with old regime

Old Income Tax Regime (Applicable for FY 2025-26)

Income Range (Rs)	Tax Rate (%)
Up to 2,50,000	Nil
2,50,001 to 5,00,000	5
5,00,001 to 10,00,000	20
Above 10,00,000	30

Key Differences

• Tax-Free Threshold:

  • New Regime: Income up to ₹4 lakh is tax-free; effective exemption extends to ₹12 lakh with standard deduction.
  • Old Regime: Income up to ₹2.5 lakh is tax-free.

• Higher Tax Brackets:

  • New Regime: The maximum tax rate of 30% applies only on income exceeding ₹24 lakh.
  • Old Regime: The maximum tax rate of 30% applies on income above ₹10 lakh.

• Standard Deduction:

  • New Regime: Standard deduction of ₹75,000 is applicable.
  • Old Regime: Standard deductions are not applicable; taxpayers can claim various exemptions and deductions.

Considerations for Taxpayers

1. Choosing Between Regimes:

   • Taxpayers with a gross income over ₹24.75 lakh should evaluate their total deductions under the old regime. If deductions exceed ₹8 lakh (excluding standard deduction), the old regime may be more beneficial.

2. Impact on Middle-Class Taxpayers:

   • The new regime significantly benefits middle-class taxpayers by raising the effective tax-free income threshold and reducing overall tax liability for those earning up to ₹12 lakh.