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Frequently asked questions
Is the new tax regime better than the old regime?
It depends on your deductions. The New regime has lower slab rates but disallows most deductions (HRA, 80C, 80D). The Old regime has higher rates but lets you claim them. If your total deductions are large (HRA + full 80C + 80D + home loan), the Old regime often wins; otherwise the New regime usually does. This calculator computes both and tells you which saves more.
What are the income tax slabs for FY 2025-26 under the new regime?
FY 2025-26 New regime slabs: up to ₹4 lakh nil, ₹4–8 lakh 5%, ₹8–12 lakh 10%, ₹12–16 lakh 15%, ₹16–20 lakh 20%, ₹20–24 lakh 25%, and above ₹24 lakh 30%. A standard deduction of ₹75,000 applies to salaried individuals, plus 4% cess.
Is income up to ₹12 lakh tax-free in the new regime for FY 2025-26?
Yes. Under the Section 87A rebate for FY 2025-26, a taxable income up to ₹12,00,000 results in zero tax in the New regime. For salaried individuals, the ₹75,000 standard deduction effectively makes income up to about ₹12.75 lakh tax-free.
How is HRA exemption calculated?
HRA exemption (Old regime only) is the least of: (1) actual HRA received, (2) rent paid minus 10% of basic salary, and (3) 50% of basic salary for metro cities or 40% for non-metro cities.
Can I claim 80C and HRA in the new tax regime?
No. The New regime does not allow 80C, HRA, 80D, or home-loan interest deductions. It only allows the standard deduction and the employer's NPS contribution under 80CCD(2). To claim 80C and HRA, choose the Old regime.
Can freelancers and business owners use this calculator?
Yes. Switch to Business / Freelancer mode at the top of the form. It supports the presumptive schemes — Section 44ADA (50% of professional receipts) and 44AD (8% of turnover, or 6% for digital receipts) — plus net business income entered directly. Business income is taxed at the normal slab rates with no standard deduction, and unlike salary it has no monthly TDS: you pay it as quarterly advance tax.
Can I calculate tax on capital gains along with my salary?
Yes. Under Add income, tick Capital gains and enter your equity short-term gains (Section 111A) and long-term gains (Section 112A). The calculator taxes them at the special rates — LTCG at 12.5% above the ₹1.25 lakh annual exemption, STCG at 20% — separately from your slab income, and it correctly keeps them out of the Section 87A rebate. For property, gold, debt or crypto, use the dedicated Capital Gains calculator.
What is Section 87A marginal relief in the new regime?
If your taxable income is just above the ₹12 lakh new-regime rebate limit for FY 2025-26, marginal relief caps your tax so it never exceeds the amount by which your income crosses ₹12 lakh. For example, at ₹12.10 lakh taxable income the tax is limited to about ₹10,000 (the amount over the limit) instead of the full slab tax of around ₹61,500. This calculator applies and explains the relief automatically.
Why might my ITR or CA show a slightly different tax?
Your filed ITR can differ because of capital gains or dividend timing, ESOPs, a different regime chosen at filing, advance-tax interest (234B / 234C), TDS / AIS / Form 26AS mismatches, or carried-forward losses set off during the year. This tool applies the Finance Act slabs, the 87A rebate with marginal relief, surcharge and 4% cess (rounded to the nearest ₹10 under Section 288B); the portal reconciles the rest. Always confirm with a Chartered Accountant before filing.