What is the Income Tax Calculator?
From FY 2025-26 (Assessment Year 2026-27), the New Tax Regime is the default for all taxpayers, with revised slabs that make income up to ₹12 lakh effectively tax-free for most salaried individuals (₹12.75 lakh including the standard deduction).
This calculator applies the FY 2025-26 slabs — 0% up to ₹4 lakh, then 5%, 10%, 15%, 20%, 25%, and 30% in ₹4 lakh bands up to ₹24 lakh — along with the ₹75,000 standard deduction for salaried taxpayers, the Section 87A rebate (zero tax on taxable income up to ₹12 lakh), marginal relief just above that threshold, and the 4% Health & Education Cess.
Income Tax Calculator Formula & How It Works
- ₹0–4 lakh: 0%
- ₹4–8 lakh: 5%
- ₹8–12 lakh: 10%
- ₹12–16 lakh: 15%
- ₹16–20 lakh: 20%
- ₹20–24 lakh: 25%
- Above ₹24 lakh: 30%
Tax is computed slab-by-slab on taxable income (gross income minus the ₹75,000 standard deduction for salaried taxpayers). If taxable income is ₹12 lakh or less, the Section 87A rebate wipes out the entire tax. Slightly above ₹12 lakh, marginal relief ensures your tax never exceeds the income above the threshold. Finally, 4% Health & Education Cess is added.
Worked Examples
Salary of ₹12,75,000
Taxable income after the ₹75,000 standard deduction is exactly ₹12 lakh, so the Section 87A rebate reduces the tax to zero.
Salary of ₹20,00,000
Taxable income is ₹19.25 lakh. Slab tax works out to ₹2,45,000, plus ₹9,800 cess = ₹2,54,800 total (about ₹21,233/month), an effective rate of roughly 12.7%.
Expert Tips
- If your taxable income is just above ₹12 lakh, marginal relief applies — use the calculator to see the exact benefit.
- NPS employer contribution (Section 80CCD(2)) remains deductible even in the new regime — up to 14% of basic salary.
- Compare with the old regime if you have large deductions (home-loan interest, HRA, 80C); the old regime can still win in some cases.