Income Tax Calculator FY 2025-26: Old vs New Regime
With the latest Budget for FY 2025-26, the New Tax Regime is incredibly attractive. The tax-free limit has been effectively raised to ₹12 Lakhs (for salaried individuals) via an increased rebate, and the tax slabs have been simplified. The Standard Deduction remains at ₹75,000 for the New Regime.
New Tax Regime Slabs (FY 2025-26)
| 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% |
Note: Under Section 87A, if your Net Taxable Income is up to ₹12 Lakhs, you pay ZERO tax.
Old Tax Regime Slabs
| Income Range | Tax Rate |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 - ₹5,00,000 | 5% |
| ₹5,00,001 - ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
Old vs New Regime: Which is Better?
For most taxpayers earning up to ₹15-20 Lakhs, the New Regime (FY 25-26) is significantly better due to lower slabs and high rebate limits.
- Choose New Regime if: Your income is under ₹12 Lakhs (0 Tax) or if you have limited investments.
- Choose Old Regime if: You have very high deductions (e.g., HRA + Home Loan + 80C > ₹4 Lakhs).
Frequently Asked Questions (FAQs)
What is Standard Deduction?
It is a flat deduction from your salary income. For FY 2025-26, it is ₹75,000 for the New Regime and ₹50,000 for the Old Regime.
How is Surcharge calculated?
If your income exceeds ₹50 Lakhs, a surcharge is levied on the tax amount. The rates vary from 10% to 25% depending on income levels.
Is 80C available in New Regime?
No, deductions under Section 80C (PPF, LIC, ELSS, EPF) are NOT available in the New Tax Regime.
Can I switch regimes every year?
Yes, salaried individuals can switch between Old and New regime annually when filing ITR. Business owners can switch only once.
What is Section 87A rebate?
Section 87A provides full tax rebate. In New Regime, if taxable income ≤ ₹12L, entire tax is waived. In Old Regime, rebate applies up to ₹5L.