Income Tax Calculator FY 2025-26: Old vs New Regime
With the latest Budget for FY 2025-26, the government has made the New Tax Regime 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)
The New Regime is the default tax regime. It offers lower tax rates but disallows most exemptions. Here are the latest slabs:
| 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
The Old Regime allows you to claim deductions like Section 80C (up to ₹1.5L), 80D (Medical Insurance), HRA, and Home Loan Interest. This regime is beneficial only if your total deductions are very high.
| 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.