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
Under the new tax regime, tax slab has been revised. Further, under new tax regime rebate is up to Rs. 25,000 is applicable if the total income does not exceed RS. 7 Lakhs. Additionally, standard deduction has also been increased from existing Rs. 50,000 to Rs. 75,000 under the new tax regime. The government also plans to introduce a next-generation Common Income Tax Return (ITR) Form, to save taxpayer's time and improve the compliance efficiency.
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 is an easy formula that shows you how to calculate income tax on salary with an example for the old tax regime.
Basic Salary + HRA + Special Allowance + Transport Allowance + any other allowance + perquisites = Gross Income from Salary
From this Gross Income, minus any Deductions and Professional Tax (if any).
This will give you the Net Taxable Income.
For example:
Kavita Shrivastava earns a basic salary of ₹ 1,00,000 per month
House Rent Allowance (HRA) of ₹ 45,000 per month
Special Allowance of ₹ 20,000 per month
Leave Travel Allowance (LTA) of ₹ 20,000 per Annum
Her taxable income would be calculated as follows:
| Components | Amount |
|---|---|
Basic Salary | 1,00,000 x 12 = 12,00,000 |
House Rent Allowance (HRA) | 45,000 x 12 = 5,40,000 |
Special Allowance | 20,000 x 12 = 2,40,000 |
Leave Travel Allowance (LTA) | 20,000 |
Total Annual Salary (Income) | 20,00,000 |
Kavita’s salary is above Rs. 15 lakhs. If you calculate income tax online with the tax calculator old regime and new tax regime calculator, this is what you will get:
| Particulars | Old Tax Regime | New Tax Regime |
|---|---|---|
Total Annual Salary | ₹ 20,00,000 | ₹ 20,00,000 |
Gross Total Income | ₹ 20,00,000 | ₹ 20,00,000 |
| (now deduct all the applicable deduction, allowances, and exemptions) | ||
Less: Standard Deduction | – ₹ 50,000 | – ₹ 75,000 |
Less: Deductions under Section 80C | – ₹ 1,50,000 | – |
Less: Deductions under Section 80D (For Self/Spouse as well as Parents maximum up to Rs. 50,000) | – ₹ 50,000 | – |
Less: House Rent Allowance (out of 5,40,000 deduction of) | – ₹ 3,00,000 | – |
Less: Leave Travel Allowance (out of 20,000 deduction of)
| – ₹ 10,000 (bills must be submitted) | – |
Total Taxable Income | ₹ 14,40,000 | ₹ 19,25,000 |
Total Tax Payable | ₹ 2,54,280 | ₹ 2,78,200 |
Under the old tax structure, investment in tax saving schemes further reduce Kavita’s tax liability.
HRA and LTA are subject to fulfillment of various condition.
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.
Anyone 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 incentivize 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, the taxpayer would earn a full exemption on their tax liability as per the budget announcement of 2025, starting next financial year.
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 for the year 2024-25, the tax payable is ₹ 50,000, excluding additional deductions and cess. Starting financial year 2025-26, there would be no tax payable for an income of up to ₹12 lakhs, unless any separately taxable elements are involved.
Under the new regime for the current year, income of ₹7 lakhs is taxed at 5%, resulting in a tax liability of ₹ 20,000. After applying rebates such as Section 87A (if eligible), the liability could be significantly reduced or eliminated.
Starting FY 2025-26, the tax owed for an income of ₹7 lakhs would be zero.
As per the new tax regime calculator:
For individuals below 60 years - below Rs. 7 lakh
For senior citizens aged 60 to 80 years - below Rs. 7 lakhs
For super seniors aged 80+ years – below Rs. 7 lakhs
As per the tax calculator old regime:
For individuals below 60 years - below Rs. 2.5 lakh
For senior citizens aged 60 to 80 years - below Rs. 3 lakhs
For super seniors aged 80+ years – below Rs. 5 lakhs
Any salary exceeding ₹2,50,000 annually requires income tax payment for individuals under 60. However, rebates under Section 87A may apply to reduce liability for incomes up to ₹5,00,000. The rules are expected to relax further in the coming years upon the introduction of the new bill. You can use an income tax calculator to estimate your tax liability based on your income, financial year, and your chosen tax regime.
The tax on your salary depends on your gross income, deductions, and the selected tax regime. Use a salary income tax calculator to determine the precise tax amount.
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.
As per income tax interest calculator, you pay 20% over Rs. 5 lakhs under the old regime, and 10% over Rs. 7 lakhs under the new regime.
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.
It is a state-level tax imposed on individuals earning a salary or practicing a profession, such as doctors, lawyers, or freelancers. It is deducted by employers and varies across states, with a maximum annual limit of ₹2,500.
To calculate your income tax return, aggregate your income from all sources, subtract eligible deductions, and apply the appropriate tax slab rates. Using a total income tax calculator simplifies this process and ensures accuracy.
Presently, income up to ₹2,50,000 for individuals under 60 is tax-free. With rebates and exemptions, individuals earning up to ₹5,00,000 under Section 87A can also have zero tax liability. Under the new regime, starting FY 2025-26, income under ₹4 lakhs would incur zero tax liability. However, with all exemptions offered, the limit would be ₹12 lakhs.
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.
