Standard Tax Calculation for age below 60 years | Old Tax Regime | New Tax Regime |
|---|---|---|
| Total Annual Salary | ₹ 20,00,000 | ₹ 20,00,000 |
| Gross Total Income | ₹ 20,00,000 | ₹ 20,00,000 |
| Less: Standard Deduction | – ₹ 50,000 | – ₹ 75000 |
| Less: Deductions under Section 80c | N/A | |
| Less: Deductions under Section 80D | N/A | |
| Less: Deductions under Section 80D | N/A | |
| Less: House Rent Allowance | N/A | |
| Less: Leave Travel Allowance | N/A | |
| Total Taxable Income | ₹ 19,50,000 | ₹19,25,000 |
| Total Tax Payable | ₹ 4,13,400 | ₹ 2,67,500 |
How do Retirement Calculators work?
Individuals with total annual income exceeding the basic exemption limit are required to file income tax return. This works out to up to Rs. 2.5 lakhs p.a. for those below 60 years. old; up to Rs. 3 lakhs p.a. for senior citizens between 60-80 years old; up to Rs. 5 lakhs p.a. for super seniors above 80 years of age under Old Tax regime.
Deduction available under section 80TTA/80TTB.
Deduction for entertainment allowance.
Deduction for Professional tax paid
Leave Travel Allowance.
Tax benefit on interest paid on housing loan taken for a self-occupied or vacant house property.
Deduction of Rs 15000 allowed from family pension under clause (iia) of section 57.
Deductions under section 80C claimed for provident fund contributions, life insurance premium, school tuition fee for children and
various specified investments such as ELSS, NPS, PPF etc.
Deduction claimed for medical insurance premium under section 80D
Tax benefits for disability under sections 80DD and 80DDB.
Tax break on interest paid on education loan under section 80.
Tax break on donations to charitable institutions available under section 80G.
All deductions under chapter VIA (like section 80C, 80CCC, , 80D, 80DD, 80DDB, 80E, 80EE, 80EEA, 80EEB, 80G, 80GG, 80GGA, 80GGC, 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc.) except deduction u/s 80CCD(2)/80CCH/80JJAA
The Union Budget 2025 introduced significant changes to India's income tax system. The income tax exemption limit has been raised to ₹4 lakh, and the standard deduction for salaried individuals is now ₹75,000. The new tax regime offers revised slabs, with up to ₹12.75 lakh income being tax-free. The tax rebate under Section 87A has also been enhanced, offering a 100% rebate for taxpayers earning up to ₹7 lakh. These reforms aim to reduce the tax burden on middle-income groups, simplify the tax system, and encourage savings, fostering economic growth and compliance.
The simplest, economical, and most efficient way to file your Income Tax Return (ITR) is through E-fling. Keep your Form 16, provided by your employer, PAN card, and any proof of investments ready. Then register on the site, https://www.incometax gov.in/ and follow the steps. The portal can also be used to check the refund, deductions, applicable forms, and the process to file the ITR.
Professional tax is a direct tax deducted from income earned from any profession, trade, or employment. As it is levied by the state government, it may vary from state to state. The tax is calculated basis predetermined slabs and typically ranges between Rs. 200 to Rs. 2500.
Here’s a breakdown of how to calculate income tax on salary under both the new tax regime and old tax regime.
New Tax Regime: This regime offers lower tax rates but doesn’t allow exemptions or deductions (like HRA or 80C). Tax is calculated on your gross income, with the following tax slabs:
For those with higher incomes, surcharge and 4% Health and Education Cess apply on the tax amount. As per the Union Budget 2025, if your income is below ₹12.75 lakhs, you may benefit from an exemption, reducing your overall tax liability.
Old Tax Regime: This system allows you to claim deductions and exemptions, like HRA, 80C, and others. The tax slabs are:
Surcharge and Health and Education Cess apply here as well. By claiming deductions, you can reduce your taxable income, resulting in a lower tax liability.
Online Income Tax calculators are extremely useful in both regimes. These online tools simplify the process of calculating your tax by allowing you to input your income details and deductions, providing a quick and accurate estimate of your tax liability. They help you make informed decisions without needing to manually calculate the entire process.
If you are 60 years old but less than 80 years old at any time during the previous year, you are considered a “senior citizen”. Those who are 80 years old or above at any time during the previous year are “super seniors citizen”. The age of senior citizens and super seniors citizen is calculated from April 1st of the financial year for the income tax calculator.
Any salaried or self-employed can calculate income tax online using the income tax calculator. It is a simple, effective tool that guides you through the process. Once you fill in the details, it gives you an estimation of the taxable income and tax payable.
Certain incomes, such as agricultural income, interest earned from tax-free bonds, and gifts received within specified limits, are exempt from income tax. These exemptions aim to provide relief and incentivise savings and investments.
For individuals below 60 years, the non-taxable income limit is ₹2,50,000. The limit increases to ₹3,00,000 for senior citizens (60–80 years) and ₹5,00,000 for super senior citizens (80+ years). Upon the selection of the new regime for income within ₹12 lakhs(plus ₹75,000 standard deduction), the taxpayer would earn a full exemption on their tax liability as per the budget announcement of 2025, starting financial year 2025-26.
Under the old regime, a ₹10 lakh salary incurs ₹1,12,500 in taxes after applying the applicable slabs and exemptions. Under the new regime starting financial year 2025-26, there would be no tax payable for an income of up to ₹12 lakhs (plus ₹75,000 standard deduction), unless any separately taxable elements are involved.
Any income exceeding ₹2,50,000 annually requires citizens to file income tax returns.
However, the minimum salary to pay income tax depends on the income tax regime and available exemptions or deductions. Under the new tax regime (as per the Union Budget 2025), if your income is up to ₹12.75 lakhs, you are not required to pay income tax. For incomes above this threshold, tax is calculated based on specified slabs. Under the old tax regime, taxpayers can claim exemptions like HRA and deductions under 80C, which can lower the taxable income. If your total income is below ₹2.5 lakhs (after exemptions and deductions), you won’t need to pay any income tax.
Simply enter all your details on the income tax calculator and select the calculator old regime to get a quick and easy basic tax calculation.
The suitability of a tax regime depends on your income composition and eligibility for deductions. Comparing both regimes using an income tax calculator can help you determine the more beneficial option. Whether you choose the old or the new regime, income tax calculators are a helpful and free tool allowing you to see the bigger picture.
Yes, salaried taxpayers can switch between regimes annually during ITR filing. However, individuals with business income can switch only once to the new tax regime and must adhere to that choice in subsequent years.
The 80C exemption is not available under the new tax regime. However, it remains applicable under the old regime for investments such as ELSS, PPF, and life insurance premiums.
To calculate your income tax return, aggregate your income from all sources, subtract eligible deductions, and apply the appropriate tax slab rates. Using an online income tax calculator simplifies this process and ensures accuracy.
Yes, an online income tax calculator allows you to input earnings from salary, house property, business, capital gains, and other sources. It ensures accurate tax calculations for complex income streams.
The old tax regime offers deductions and exemptions, while the new tax regime has lower tax rates but disallows most deductions. The choice depends on your income structure and investment habits.
