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What is an Income Tax Calculator?

Whether you are salaried, self-employed, or receiving returns from investments or rent, income tax is mandatory for everyone earning an income. While it may seem complicated, the income tax calculator shows you how to calculate income tax online in just a few clicks!

 

The Income Tax Calculator India is an accurate and updated tool to help you determine your tax liability for the year and maximize your tax savings.

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How to use Income Tax Calculator

Step 1

To calculate income tax, simply enter your details on the IndiaFirst Life tax calculator online.

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Step 2

Enter your age and the financial year.

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Step 3

Enter your gross income from all sources, i.e., salary or business, short-term and long-term investments, FD interest, rents received on property, taxable gifts and others.

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Step 4

Add the details of all the available deductions.

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Step 5

The income tax calculator will calculate income tax online on the basis of both, the old and new tax regime as per the latest regulations.

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Step 6

This will give you an estimate of your tax savings which can be reinvested in IndiaFirst Life’s tax-saving life insurance plans.

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How to Calculate Income Tax for FY 2024-25 (AY 2025-26)?

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 80cN/A 
Less: Deductions under Section 80DN/A 
Less: Deductions under Section 80DN/A 
Less: House Rent AllowanceN/A 
Less: Leave Travel AllowanceN/A 
Total Taxable Income₹ 19,50,000₹19,25,000
Total Tax Payable₹ 4,13,400₹ 2,67,500

Benefits of Filing Income Tax Online

The tax calculator online calculates taxes quickly and easily and offers multiple benefits.

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Enables faster tax refunds

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Provides instant confirmation of filing and status updates

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Offers safety and security

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Pay at your convenience to avoid any late fee or penalty

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Provides eligibility to offset losses against present and future investment gains

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IT Return serves as income and address proof required for visa, loan and insurance application

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How do Retirement Calculators work?

How to calculate income tax on salary?

Here is an easy formula that shows you how to calculate income tax on salary based on the old tax regime.

Taxable Income = Gross Income from Salary (Basic + HRA + Special Allowance + Any other allowance + Perquisites) – Standard deduction, Chapter VI-A Deductions & Professional Taxes

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Frequently Asked Questions

What is the eligibility criteria for filing Income Tax Returns

Answer

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.

What are the exemptions/ deductions that are not allowed under the new tax regime

Answer
  • 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.

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    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

What are the new developments for Income Tax announced in the Union Budget 2025

Answer

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.

What are some tips on how to prepare for filing your income tax return according to the new regime income tax slab

Answer

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.

What is professional tax in India?

Answer

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.

How to calculate income tax on salary?

Answer

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:

  • ₹0 – ₹2.5 lakhs: 0%
  • ₹2.5 lakhs – ₹5 lakhs: 5%
  • ₹5 lakhs – ₹7.5 lakhs: 10%
  • ₹7.5 lakhs – ₹10 lakhs: 15%
  • ₹10 lakhs – ₹12.5 lakhs: 20%
  • ₹12.5 lakhs – ₹15 lakhs: 25%
  • Above ₹15 lakhs: 30%

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:

  • ₹0 – ₹2.5 lakhs: 0%
  • ₹2.5 lakhs – ₹5 lakhs: 5%
  • ₹5 lakhs – ₹10 lakhs: 20%
  • Above ₹10 lakhs: 30%

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.

 

How to calculate the age of senior citizen for income tax?

Answer

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.

How to calculate income tax?

Answer

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.

Which income is not taxable in India?

Answer

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.

What is the maximum non-taxable income limit?

Answer

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.

How much income tax do I pay on a ₹10 lakh salary?

Answer

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.

What is the minimum salary to pay income tax?

Answer

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.

How to calculate income tax on salary with old regime?

Answer

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.

Which tax regime is better for me?

Answer

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.

Can I switch between tax regimes?

Answer

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.

Has the 80C exemption been scrapped?

Answer

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.

How do you calculate income tax return?

Answer

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.

Can I use the income tax calculator if I have income from multiple sources?

Answer

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.

What is the difference between the old and new tax regimes?

Answer

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.