Indian Income Tax Calculator
Calculate Indian income tax under old and new regimes with HRA, 80C, and 80D deductions. Enter values for instant results with step-by-step formulas.
Reviewed by Daniel Agrici, Founder & Lead Developer
Formula
Tax = Sum of (Slab Amount x Slab Rate) - Section 87A Rebate + 4% Cess
Taxable income is computed by subtracting applicable deductions from gross income. Tax is calculated slab-wise. Section 87A rebate is applied if eligible. Finally, 4% Health and Education Cess is added to arrive at total tax payable.
Worked Examples
Example 1: Salaried Employee with Deductions
Problem:Gross income: 12,00,000. Old regime deductions: 50,000 standard, 1,50,000 Section 80C, 25,000 Section 80D, 1,00,000 HRA. Compare both regimes.
Solution:Old Regime:\nTaxable = 12,00,000 - 3,25,000 = 8,75,000\nTax = 0 + 12,500 + 75,000 = 87,500\nCess = 3,500 | Total = 91,000\n\nNew Regime:\nTaxable = 12,00,000 - 75,000 = 11,25,000\nTax = 0 + 20,000 + 30,000 + 18,750 = 68,750\nCess = 2,750 | Total = 71,500
Result:Old: 91,000 | New: 71,500 | New regime saves 19,500
Example 2: High Income with Maximum Deductions
Problem:Gross income: 20,00,000. Old regime: standard 50,000, 80C 1,50,000, 80D 50,000, HRA 2,40,000, home loan 2,00,000.
Solution:Old Regime:\nDeductions = 6,90,000\nTaxable = 13,10,000\nTax = 0 + 12,500 + 1,00,000 + 93,000 = 2,05,500\nCess = 8,220 | Total = 2,13,720\n\nNew Regime:\nTaxable = 19,25,000\nTax = 0 + 20,000 + 30,000 + 30,000 + 60,000 + 1,27,500 = 2,67,500\nCess = 10,700 | Total = 2,78,200
Result:Old: 2,13,720 | New: 2,78,200 | Old regime saves 64,480
Frequently Asked Questions
What is the difference between old and new tax regimes in India?
The Indian income tax system offers two parallel tax regimes. The old regime has higher tax rates but allows numerous deductions and exemptions such as HRA, Section 80C investments up to 1.5 lakh, Section 80D health insurance premiums, home loan interest under Section 24, and many others. The new regime introduced in 2020 and revised in 2023 offers significantly lower tax rates with more slabs but eliminates most deductions and exemptions. Under the new regime for FY 2024-25, income up to 3 lakh is tax-free, 3 to 7 lakh is taxed at 5 percent, 7 to 10 lakh at 10 percent, 10 to 12 lakh at 15 percent, 12 to 15 lakh at 20 percent, and above 15 lakh at 30 percent. A standard deduction of 75,000 is also available.
Which tax regime should I choose for maximum savings?
The choice between old and new regimes depends on the total value of deductions and exemptions you can claim. As a general rule, if your total deductions under the old regime exceed approximately 3.75 lakh to 4 lakh rupees, the old regime is likely more beneficial. If your deductions are below this threshold, the new regime with its lower slab rates will result in lower tax. Salaried employees with significant HRA exemption, home loan interest, and full 80C investments often benefit from the old regime. Employees without rent payments, home loans, or substantial investments typically benefit from the new regime. Indian Income Tax Calculator compares both regimes side by side so you can see the exact difference. You can switch between regimes each year if you have no business income.
How does health and education cess work in Indian income tax?
A health and education cess of 4 percent is levied on the total income tax amount including any applicable surcharge. For example, if your computed tax is 1 lakh rupees, the cess adds 4,000 rupees making the total 1,04,000 rupees. This cess funds the government's health and education initiatives and applies to all taxpayers regardless of income level or tax regime chosen. The cess cannot be claimed as a deduction.
What is surcharge on income tax and when does it apply?
Surcharge is an additional tax levied on taxpayers with higher income levels. For FY 2024-25 under the new regime, a 10 percent surcharge applies on income exceeding 50 lakh, 15 percent on income exceeding 1 crore, and 25 percent on income exceeding 2 crore. The maximum surcharge rate is capped at 25 percent under the new regime. Under the old regime, rates go up to 37 percent for income above 5 crore. Marginal relief ensures your total tax does not exceed the income above the surcharge threshold.
References
Reviewed by Daniel Agrici, Founder & Lead Developer · Editorial policy