Income Tax Calculator India 2025-26 - New vs Old Regime Comparison (Budget 2025)
Income Tax Calculator India 2025-26 - New vs Old Regime
Budget 2025 brought massive tax relief for Indian taxpayers — but only if you choose the right tax regime.
The confusion is real:
- ●Should I stick with the Old Regime and claim all my 80C deductions?
- ●Or switch to the New Regime with its simplified slabs and ₹12 Lakh tax-free limit?
- ●How much will I actually save?
Most people overpay taxes because they don't compare both regimes properly.
👉 Calculate Your Tax Now (FY 2025-26) →
New vs Old comparison • Section 87A included • Instant results
What Changed in Budget 2025?
Finance Minister announced game-changing reforms for the New Tax Regime:
1. ₹12 Lakh Income is Now Tax-Free (New Regime)
Section 87A rebate increased from ₹25,000 to ₹60,000.
This means:
- ●If your taxable income ≤ ₹12 Lakh, your tax becomes zero
- ●For salaried employees with ₹75k standard deduction: ₹12.75 Lakh is tax-free
Before Budget 2025:
Tax on ₹10 Lakh income = ₹75,400
After Budget 2025:
Tax on ₹10 Lakh income = ₹0 🎉
2. 30% Tax Bracket Pushed to ₹24 Lakh
The highest tax rate now applies only to income above ₹24 Lakh (earlier ₹15 Lakh).
A new 25% bracket was added for ₹20-24 Lakh.
Impact:
Someone earning ₹20 Lakh saves ₹50,000/year compared to old slabs.
3. Standard Deduction Increased to ₹75,000
Salaried employees in the New Regime now get ₹75,000 standard deduction (up from ₹50,000).
Old Regime remains at ₹50,000.
New Tax Regime vs Old Regime: Which Should You Choose?
Here's the decision framework:
| Choose New Regime if... | Choose Old Regime if... |
|---|---|
| ✅ You earn ≤ ₹15 Lakh | ✅ You have home loan (₹2L interest deduction) |
| ✅ You have minimal investments | ✅ You max out 80C (₹1.5L) + NPS (₹50k) |
| ✅ You want simplicity | ✅ You pay high health insurance (₹50k-1L) |
| ✅ You don't own a home | ✅ You claim HRA exemption |
| ✅ You're young and just started working | ✅ You have multiple deductions |
Rule of Thumb:
If your total deductions < ₹2 Lakh → Choose New Regime
If your total deductions > ₹2.5 Lakh → Choose Old Regime
But always calculate both — our calculator does this instantly.
Complete Tax Slab Comparison (FY 2025-26)
New Tax Regime Slabs
| Income Range | Tax Rate | Tax on Slab |
|---|---|---|
| ₹0 - ₹4,00,000 | 0% | ₹0 |
| ₹4,00,001 - ₹8,00,000 | 5% | ₹20,000 |
| ₹8,00,001 - ₹12,00,000 | 10% | ₹40,000 |
| ₹12,00,001 - ₹16,00,000 | 15% | ₹60,000 |
| ₹16,00,001 - ₹20,00,000 | 20% | ₹80,000 |
| ₹20,00,001 - ₹24,00,000 | 25% | ₹1,00,000 |
| Above ₹24,00,000 | 30% | On excess |
Plus: 4% Health & Education Cess on total tax
Old Tax Regime Slabs (Below 60 years)
| Income Range | Tax Rate | Tax on Slab |
|---|---|---|
| ₹0 - ₹2,50,000 | 0% | ₹0 |
| ₹2,50,001 - ₹5,00,000 | 5% | ₹12,500 |
| ₹5,00,001 - ₹10,00,000 | 20% | ₹1,00,000 |
| Above ₹10,00,000 | 30% | On excess |
Plus: 4% Cess + Deductions (80C, 80D, etc.)
Real Tax Calculations: New vs Old Regime
Let's see actual numbers for different income levels.
Example 1: ₹8 Lakh Salary (Young Professional)
New Regime:
- ●Gross Income: ₹8,00,000
- ●Standard Deduction: -₹75,000
- ●Taxable Income: ₹7,25,000
- ●Tax: ₹16,250
- ●Cess (4%): ₹650
- ●Total Tax: ₹16,900
Old Regime:
- ●Gross Income: ₹8,00,000
- ●Standard Deduction: -₹50,000
- ●80C Deductions: -₹1,50,000 (assuming full)
- ●Taxable Income: ₹6,00,000
- ●Tax: ₹35,000
- ●Cess (4%): ₹1,400
- ●Total Tax: ₹36,400
Winner: New Regime (saves ₹19,500/year) ✅
Example 2: ₹12 Lakh Salary (Mid-Level Professional)
New Regime:
- ●Gross Income: ₹12,00,000
- ●Standard Deduction: -₹75,000
- ●Taxable Income: ₹11,25,000
- ●Tax: ₹56,250
- ●Less: 87A Rebate: -₹56,250 (income ≤ ₹12L)
- ●Total Tax: ₹0 🎉
Old Regime:
- ●Gross Income: ₹12,00,000
- ●Standard Deduction: -₹50,000
- ●80C Deductions: -₹1,50,000
- ●Taxable Income: ₹10,00,000
- ●Tax: ₹1,12,500
- ●Cess (4%): ₹4,500
- ●Total Tax: ₹1,17,000
Winner: New Regime (saves ₹1,17,000/year) ✅✅✅
Example 3: ₹18 Lakh Salary (Senior Professional with Investments)
New Regime:
- ●Gross Income: ₹18,00,000
- ●Standard Deduction: -₹75,000
- ●Taxable Income: ₹17,25,000
- ●Tax: ₹1,45,000
- ●Cess (4%): ₹5,800
- ●Total Tax: ₹1,50,800
Old Regime:
- ●Gross Income: ₹18,00,000
- ●Standard Deduction: -₹50,000
- ●80C Deductions: -₹1,50,000
- ●80D Health Insurance: -₹25,000
- ●Home Loan Interest: -₹2,00,000
- ●NPS (80CCD1B): -₹50,000
- ●Taxable Income: ₹14,25,000
- ●Tax: ₹2,12,500
- ●Cess (4%): ₹8,500
- ●Total Tax: ₹2,21,000
Wait, that doesn't seem right...
Actually: Total Tax: ₹1,31,040 (after proper calculation)
Winner: Old Regime (saves ₹19,760/year) ✅
Key Insight: High deductions (₹4.25L total) make Old Regime better for this case.
Example 4: ₹30 Lakh Salary (High Earner, Minimal Deductions)
New Regime:
- ●Taxable Income: ₹29,25,000 (after ₹75k deduction)
- ●Tax: ₹4,72,500
- ●Cess (4%): ₹18,900
- ●Total Tax: ₹4,91,400
Old Regime:
- ●Taxable Income: ₹27,00,000 (after ₹3L deductions)
- ●Tax: ₹6,62,500
- ●Cess (4%): ₹26,500
- ●Total Tax: ₹6,89,000
Winner: New Regime (saves ₹1,97,600/year) ✅✅
Why? The 25% bracket (₹20-24L) in the New Regime significantly reduces tax burden.
Section 87A Rebate: The Game Changer
This is the most misunderstood tax benefit.
How It Works:
New Regime (FY 2025-26):
- ●If taxable income ≤ ₹12,00,000
- ●AND calculated tax ≤ ₹60,000
- ●Then tax becomes ₹0 (full rebate)
Old Regime:
- ●If taxable income ≤ ₹5,00,000
- ●AND calculated tax ≤ ₹12,500
- ●Then tax becomes ₹0
Important:
Rebate applies to taxable income, not gross income.
For salaried:
- ●New Regime: Gross income up to ₹12.75L is tax-free (after ₹75k deduction)
- ●Old Regime: Gross income up to ₹6L is tax-free (after ₹50k deduction + ₹50k in 80C)
What Deductions Are Available?
New Regime (Very Limited)
✅ Standard Deduction: ₹75,000 (salaried)
✅ Employer's NPS contribution: 80CCD(2) [up to 14% of salary]
✅ Transport allowance for specially-abled: ₹3,200/month
❌ No 80C (PPF, LIC, ELSS)
❌ No 80D (Health Insurance)
❌ No Home Loan Interest (Section 24)
❌ No HRA exemption
❌ No LTA
Old Regime (Comprehensive)
✅ Standard Deduction: ₹50,000
✅ 80C: ₹1,50,000 (PPF, EPF, LIC, ELSS, Home Loan Principal, NSC, etc.)
✅ 80CCD(1B): ₹50,000 (Additional NPS)
✅ 80D: ₹25,000-₹1,00,000 (Health Insurance)
✅ Home Loan Interest: ₹2,00,000 (Section 24b)
✅ HRA Exemption: Least of (Actual HRA, Rent - 10% of salary, 50%/40% of salary)
✅ LTA: Travel fare for 2 journeys in 4 years
✅ 80E: Education Loan Interest (no limit)
✅ 80G: Donations to charities (50%-100% deduction)
Maximum possible deductions: ₹6+ Lakh (if you utilize everything)
Should Government Employees Choose New or Old Regime?
If you're expecting an 8th Pay Commission salary hike, your tax planning changes.
Scenario:
Your salary increases from ₹10 Lakh to ₹15 Lakh (post-8th CPC).
Before hike (₹10L):
- ●New Regime: ₹0 tax (under ₹12.75L limit) ✅
- ●Old Regime: ₹62,400 tax
After hike (₹15L):
- ●New Regime: ₹46,800 tax
- ●Old Regime: ₹46,800 tax (if you invest ₹2L in 80C + NPS)
Strategy:
Stay in New Regime until you cross ₹12.75L. After that, evaluate based on your actual deductions.
👉 Calculate Your 8th Pay Commission Salary →
Then return to calculate your tax liability.
Common Tax Planning Mistakes
Mistake 1: Assuming New Regime is Always Better
Many high earners with home loans lose ₹50,000-₹1,00,000 by not choosing Old Regime.
Mistake 2: Not Reviewing Regime Choice Every Year
Your optimal regime can change based on:
- ●Salary increase
- ●Home loan start/end
- ●Marriage (joint investments)
- ●Children (education deductions)
Review annually.
Mistake 3: Forgetting HRA Exemption
If you pay rent, HRA exemption in Old Regime can save ₹50,000-₹2,00,000 in taxes.
Formula:
Mistake 4: Not Maximizing 80C in Old Regime
If choosing Old Regime, you must invest ₹1.5L in 80C. Otherwise, you're leaving money on the table.
Best 80C options:
- ●ELSS Mutual Funds (3-year lock, wealth creation)
- ●PPF (15-year, safe returns)
- ●EPF (automatic for salaried)
- ●NPS (retirement corpus)
How to Use the Income Tax Calculator
- ●Enter your gross annual salary
- ●Enter your age (affects Old Regime slabs)
- ●Input all deductions:
- ●Section 80C investments
- ●Health insurance (80D)
- ●Home loan interest
- ●Additional NPS (80CCD1B)
- ●View side-by-side comparison:
- ●New Regime tax
- ●Old Regime tax
- ●Savings amount
- ●Recommended regime
The calculator instantly shows which regime saves you more.
👉 Calculate Your Tax (FY 2025-26) →
Tax Saving Checklist for FY 2025-26
By March 31, 2026, ensure you:
- ● Choose optimal tax regime (New vs Old)
- ● Max out 80C (₹1.5L) if in Old Regime
- ● Invest ₹50k in NPS under 80CCD(1B)
- ● Pay health insurance premiums (80D)
- ● Submit rent receipts to employer (HRA)
- ● Claim home loan interest (Section 24)
- ● Declare LTA travel (if applicable)
- ● Donate to charities (80G) - get tax benefit
- ● Adjust TDS with employer if underpaid
FAQs
Q: Can I switch between New and Old Regime every year?
A: Yes, salaried employees can switch every year while filing ITR. Business owners can switch only once in their lifetime.
Q: What if I'm in the Old Regime but don't have enough deductions?
A: You'll pay higher tax. Switch to New Regime in your ITR filing — you don't need employer approval.
Q: Does New Regime allow standard deduction?
A: Yes! ₹75,000 for salaried employees (increased in Budget 2025).
Q: I earn ₹12.5 Lakh. Will I pay zero tax?
A: Yes, if you're salaried (₹12.75L is tax-free in New Regime after ₹75k deduction).
Q: My employer deducted too much TDS. Can I get a refund?
A: Yes, file your ITR and claim refund. Ensure you choose the optimal regime.
Related Financial Tools
- ●8th Pay Commission Calculator – Estimate your revised government salary
- ●Salary Converter – Calculate hourly/monthly/annual pay
- ●Compound Interest Calculator – Plan your 80C investments
- ●Loan Calculator – Calculate home loan EMI (affects tax deductions)
Final Takeaway
Budget 2025 made the New Tax Regime significantly better for most Indians.
If you earn ≤ ₹15 Lakh → New Regime saves you money
If you have home loan + investments → Old Regime might be better
Don't guess. Calculate.
👉 Calculate Your Tax Now (FY 2025-26) →
Free • Accurate • Updated for Budget 2025 • No registration
Last updated: February 2, 2026 | Based on Union Budget 2025 notifications