Income Tax Calculator India FY 2025-26: New vs Old Regime, Budget 2025 Slabs
Budget 2025 brought significant changes to India's income tax structure — most notably making income up to ₹12 lakh effectively tax-free under the new regime. If you haven't revisited your tax planning since February 2025, you may be paying more tax than necessary. This guide explains the new slabs and helps you decide which regime is better for you.
Try Income Tax Calculator Free →New Regime Tax Slabs FY 2025-26 (Budget 2025)
₹0–4L: Nil | ₹4–8L: 5% | ₹8–12L: 10% | ₹12–16L: 15% | ₹16–20L: 20% | ₹20–24L: 25% | Above ₹24L: 30%. Plus ₹75,000 standard deduction for salaried employees. The 87A rebate makes income up to ₹12L (after standard deduction, so gross salary up to ₹12.75L) effectively tax-free.
Old Regime Tax Slabs FY 2025-26
₹0–2.5L: Nil | ₹2.5–5L: 5% | ₹5–10L: 20% | Above ₹10L: 30%. Standard deduction ₹50,000, plus deductions under 80C (₹1.5L), 80D, HRA, Section 24b (home loan), NPS (80CCD), and others. The 87A rebate applies for taxable income up to ₹5L.
Who Benefits from the New Regime?
The new regime benefits anyone whose deductions (80C + HRA + home loan + NPS etc.) are less than approximately ₹3.75L annually. For most salaried employees without a home loan and living in company accommodation, the new regime is now better. The ₹75K standard deduction (vs ₹50K old) also helps.
Who Should Stick to the Old Regime?
If you have significant deductions — home loan interest (Section 24b up to ₹2L), NPS contributions (80CCD 1B up to ₹50K), HRA exemption, and full 80C (₹1.5L) — the old regime may still save more, especially for incomes between ₹10–20L with large deductions.
Understanding Surcharge and Cess
Surcharge applies on the base tax: 10% for income ₹50L–1Cr, 15% for ₹1–2Cr, 25% for ₹2–5Cr (new regime cap), 37% for above ₹5Cr (old regime only). Health and Education Cess is 4% on (base tax + surcharge) for all taxpayers.
Section 87A Rebate
If your taxable income (after all deductions) is ≤ ₹12L under the new regime (or ≤ ₹5L under old), you get a full rebate on your tax — meaning zero tax payable. This is a rebate, not a deduction, so it applies after computing tax on slabs.
How to Use the Formly Income Tax Calculator
Enter your annual gross salary and any other income. For the old regime, fill in your deductions (80C, 80D, HRA, home loan interest). Toggle between new and old regime to see the comparison. The calculator shows the better option and how much you save by choosing it.
Frequently Asked Questions
Is ₹12 lakh income really tax-free in 2025-26?⌄
Yes, under the new regime. After the ₹75K standard deduction, your taxable income becomes ₹11.25L if gross is ₹12L. The computed tax on that is fully covered by the 87A rebate. So effective tax = ₹0.
Should I switch to new regime?⌄
For most salaried taxpayers without a home loan, the new regime is now better. Use the calculator to compare both regimes with your actual numbers before deciding.
When is the last date to switch regimes?⌄
Salaried employees can switch between regimes every financial year when filing their ITR. Inform your employer by April about your regime choice to avoid excess TDS deductions.
What is the NPS deduction under new regime?⌄
Under the new regime, employer NPS contribution (Section 80CCD(2)) is still deductible — up to 14% of basic for government employees and 10% for others. Employee contribution (80CCD(1B)) is NOT available in new regime.
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