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 for accuracy by Daniel Agrici, Founder & Lead Developer
Indian Income Tax Calculator
Calculator
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Formula: Tax = Sum of (Slab Amount x Slab Rate) - Section 87A Rebate + 4% Cess
Worked example — Old: 91,000 | New: 71,500 | New regime saves 19,500
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: Taxable = 12,00,000 - 3,25,000 = 8,75,000 Tax = 0 + 12,500 + 75,000 = 87,500 Cess = 3,500 | Total = 91,000 New Regime: Taxable = 12,00,000 - 75,000 = 11,25,000 Tax = 0 + 20,000 + 30,000 + 18,750 = 68,750 Cess = 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: Deductions = 6,90,000 Taxable = 13,10,000 Tax = 0 + 12,500 + 1,00,000 + 93,000 = 2,05,500 Cess = 8,220 | Total = 2,13,720 New Regime: Taxable = 19,25,000 Tax = 0 + 20,000 + 30,000 + 30,000 + 60,000 + 1,27,500 = 2,67,500 Cess = 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.
What is Section 80C and what investments qualify for it?
Section 80C of the Income Tax Act allows individuals to claim a deduction of up to 1.5 lakh rupees per financial year on specific investments and expenditures. This is only available under the old tax regime. Qualifying investments include Employee Provident Fund contributions, Public Provident Fund deposits, Equity Linked Savings Schemes with a 3-year lock-in, National Savings Certificate, 5-year fixed deposits, Sukanya Samriddhi Yojana deposits, and life insurance premium payments. Expenditures like tuition fees for children and principal repayment on home loans also qualify. Section 80C is the most widely used deduction among Indian taxpayers and forms the cornerstone of tax planning under the old regime.
How does HRA exemption work for salaried employees?
House Rent Allowance exemption under Section 10(13A) is available to salaried employees who receive HRA as part of their salary and pay rent for their accommodation. The exempt amount is the minimum of three calculations: actual HRA received, 50 percent of basic salary for metro cities or 40 percent for non-metro cities, and actual rent paid minus 10 percent of basic salary. For example, if your basic salary is 50,000 per month, HRA received is 20,000, and rent paid is 18,000, the exempt HRA would be the minimum of 20,000 or 25,000 or 13,000 which equals 13,000 per month. HRA exemption is only available under the old tax regime and requires rent receipts as proof.
What is Section 87A rebate and who qualifies for it?
Section 87A provides a tax rebate to resident individuals with taxable income below a specified threshold. Under the new tax regime for FY 2024-25, if your taxable income is up to 7 lakh rupees, you receive a rebate of up to 25,000 rupees, effectively making your income tax zero. Under the old tax regime, the rebate threshold is 5 lakh rupees with a maximum rebate of 12,500 rupees. This rebate is applied after calculating the tax but before adding the health and education cess of 4 percent. Note that the rebate is available only to resident individuals and not to Hindu Undivided Families, companies, or other entities. The rebate cannot reduce your tax below zero and does not create a refund on its own.
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.
What is the standard deduction for salaried employees in India?
Under the new tax regime for FY 2024-25, a standard deduction of 75,000 rupees is available to salaried employees and pensioners. Under the old regime, the standard deduction is 50,000 rupees. This deduction is automatically applied to gross salary income and does not require any investment or expenditure proof. It was reintroduced in Budget 2018 after being removed in 2005, replacing the earlier transport allowance and medical reimbursement exemptions.
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 Section 80D and how much can I claim for health insurance?
Section 80D allows deduction for health insurance premiums paid for self, spouse, children, and parents. Under the old tax regime, you can claim up to 25,000 rupees for self and family, plus an additional 25,000 for parents (50,000 if parents are senior citizens). A preventive health check-up of up to 5,000 is included within this limit. Senior citizens without insurance can claim 50,000 for medical expenditure. This deduction is not available under the new tax regime.
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.
How are capital gains taxed in India?
Short-term capital gains on equity (held less than 1 year) are taxed at 20 percent. Long-term capital gains on equity exceeding 1.25 lakh per year are taxed at 12.5 percent. For debt funds and other assets, gains are added to income and taxed at slab rate regardless of holding period. Property held over 2 years qualifies as long-term with indexation benefit. These capital gains tax rules apply under both old and new tax regimes.
References
Reviewed for accuracy by Daniel Agrici, Founder & Lead Developer · Editorial policy
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