Income Tax Calculator: Calculate Your Tax for FY 2025-26

What is Income Tax?

Income tax is a direct tax levied by the Government of India on the income earned by individuals, Hindu Undivided Families (HUFs), companies, and other entities during a financial year. The Income Tax Act, 1961 governs the taxation of income in India. Every person whose total income exceeds the basic exemption limit is required to file an income tax return.

The Y1 Money Income Tax Calculator helps you estimate your tax liability for FY 2025-26 (Assessment Year 2026-27) under both the New and Old tax regimes. Enter your annual income, select the regime, and get an instant breakdown of your tax, cess, and total liability.

New Regime Tax Slabs (FY 2025-26)

The new tax regime, which is the default regime from FY 2023-24, offers lower tax rates but does not allow most deductions and exemptions. A standard deduction of ₹75,000 is available under the new regime for FY 2025-26.

Old Regime Tax Slabs

The old tax regime allows various deductions and exemptions under sections like 80C, 80D, HRA, and LTA. A standard deduction of ₹50,000 is available. Taxpayers with significant deductions may benefit from the old regime.

Old vs New Regime: Which to Choose?

The choice between the old and new regime depends on your deductions and exemptions:

• Choose New Regime if you do not have significant deductions under 80C, 80D, HRA, or other sections. The lower slab rates and higher standard deduction (₹75,000) make it beneficial for most salaried individuals.
• Choose Old Regime if you claim deductions exceeding ₹3-4 lakh through 80C (₹1.5L), 80D (health insurance), HRA exemption, home loan interest (Section 24), NPS (80CCD), and other sections.

Use this calculator to compare your tax under both regimes and make an informed decision.

Deductions under Section 80C

Section 80C of the Income Tax Act allows a deduction of up to ₹1,50,000 per financial year on specified investments and expenses. This deduction is only available under the Old Regime. Popular 80C investments include:

• PPF (Public Provident Fund) — Long-term savings with tax-free returns, 15-year lock-in
• ELSS (Equity Linked Savings Scheme) — Tax-saving mutual funds with 3-year lock-in and potential for high returns
• Life Insurance Premiums — Premiums paid for life insurance policies qualify for deduction
• 5-Year Tax Saver FD — Fixed deposits with a 5-year lock-in offered by banks
• EPF/VPF — Employee Provident Fund contributions (employee's share)
• NPS (under 80CCD) — Additional deduction of ₹50,000 available over and above 80C limit
• Sukanya Samriddhi Yojana — Savings scheme for the girl child with attractive interest rates
• Home Loan Principal Repayment — Principal component of home loan EMI

Tax Saving Tips

• Maximize 80C: Invest the full ₹1.5 lakh limit in PPF, ELSS, or tax-saver FDs to reduce taxable income under the old regime
• Health Insurance (80D): Get a deduction of up to ₹25,000 (₹50,000 for senior citizens) on health insurance premiums
• NPS Extra Deduction: Claim an additional ₹50,000 deduction under Section 80CCD(1B) for NPS contributions
• HRA Exemption: If you pay rent and receive HRA, claim the exemption to significantly reduce your tax under the old regime
• Compare Regimes: Always calculate tax under both regimes before filing to choose the one that saves you more
• Invest in FDs on Y1 Money: Book 5-year tax-saver FDs at up to 8.30% on Y1 Money to save tax under Section 80C