Income Tax Calculator India FY 2025–26 (New Regime)
📊 Example Income Tax Result – FY 2025–26 (New Regime)
Here's a sample income tax calculation summary based on a total income of ₹60,00,000 for the Financial Year 2025–26 (AY 2026–27), using the New Tax Regime. This illustration includes updated tax slab rates and rebate provisions from Union Budget 2025 with zero tax up to ₹12 lakh. To get an accurate estimate of your taxable income, total tax liability, and net take-home salary, enter your actual salary, capital gains, and deductions above, then click Calculate Tax.
📌 This calculator is based on official Income Tax Department slabs and rules for FY 2025–26. It covers salaried professionals, freelancers, rental income, and capital gains scenarios under the new regime.
Tax SummaryTax Summary – FY 2025-2026 (AY 2026-2027)
Tax Payable
₹13,27,377
Income Tax:₹10,53,420
STCG Tax:₹60,000
LTCG Tax:₹46,875
Surcharge:₹1,16,030
Health & Education Cess:₹51,053
Take Home Salary
₹47,06,923
ITR filing due date: July 31, 2027 (subject to change). Please visit the official Income Tax website: https://www.incometax.gov.in
Key Components in Income Tax Calculation (FY 2025–26, New Regime)
Salary Calculator
Convert CTC to monthly in-hand salary and tax-adjusted income for FY 2025–26.
Gratuity Calculator
Estimate tax-free gratuity on resignation or retirement using latest salary inputs.
Understanding your taxable income and income tax liability begins with identifying all income sources—salary, rental income, capital gains, and more. Under the updated New Tax Regime for FY 2025–26 (AY 2026–27), tax calculation has become simpler but stricter on exemptions. Our Income Tax Calculator is aligned with the latest Union Budget 2025 rules and new slab structure, helping Indian taxpayers—whether salaried professionals, freelancers, or rental earners—accurately determine how much tax they owe.
This section explains each key component used in your income tax computation so you can confidently estimate your tax and plan better. Use this as a guide before you begin with the actual tax calculator tool.
📑Reference:India Filings – Which Salary Component Are Taxable
Income Sources Included in Income Tax Calculation (FY 2025–26 – New Tax Regime)
Your taxable income under the New Tax Regime (FY 2025–26) is computed by aggregating different types of earnings. Each income source is taxed based on specific provisions of the Income Tax Act, 1961. Here's a detailed breakdown of components considered while computing your total tax liability in India.
A. Salary Income
- Basic Salary: The fully taxable fixed portion of your pay, forming the base for deductions like PF and HRA.
- Allowances: Includes HRA, LTA, DA, and special allowances; some are partially or fully exempt depending on the regime.
- Bonuses & Incentives: Performance-linked pay, festive bonuses, and commissions – all taxable as income.
- Perquisites (Perks): Employer-provided benefits such as cars, rent-free accommodation, ESOPs, and club memberships, taxed as fringe benefits.
- Employer Contributions: Contributions to Provident Fund (PF) and National Pension System (NPS). Taxable beyond the exempt thresholds (e.g., ₹7.5 lakh combined cap on employer contributions).
- Leave Encashment: Fully exempt for government employees; partially exempt (up to ₹3 lakh or ₹25 lakh lifetime for retirement) under Section 10(10AA) for private sector employees.
- Gratuity: Tax-free up to ₹20 lakh if you're eligible (after 5 years of service). Beyond that, it becomes part of taxable salary.
- Pension: Monthly annuity or lump sum received after retirement. Commuted pension may be partly exempt.
- Severance/Retrenchment Pay: Any compensation on termination (severance, golden handshake) is taxable under 'Income from Salary' or exempt under Section 10(10C), based on conditions.
📑Reference:Income Tax India | Income from House Property
B. Rental Income from Let-Out or Vacant Property (Taxable Under House Property)
Rental income—whether from a let-out property or a deemed-to-be-let-out vacant unit—is taxable under the head "Income from House Property" as per the Income Tax Act. Even if a property is unoccupied, its Gross Annual Value (GAV) is computed based on the expected market rent. For FY 2025–26 under the New Tax Regime, this income is fully taxable after eligible deductions and exemptions.
- Let-Out Property Income: Actual rent received or receivable is fully taxable. Report your annual rental income including advance rent, post-dated rent, and arrears (if applicable).
- Vacant or Deemed Let-Out Property: If you own more than one house and it remains vacant (not self-occupied), its taxable value is assessed based on local rental benchmarks—even if no rent is received.
- Standard Deduction (30%): As per Section 24(a), you can claim a flat 30% deduction on Net Annual Value (NAV) for maintenance, irrespective of actual expenses.
- Municipal and Property Taxes: Deduct municipal taxes paid during the financial year from the Gross Annual Value to arrive at NAV.
- Home Loan Interest Deduction: Under Section 24(b), interest paid on a home loan for let-out property is 100% deductible—there’s no upper cap unlike self-occupied property.
🔍 Tip: Use our calculator to include this rental income in your total taxable income and optimize deductions based on FY 2025–26 income tax slabs. This ensures an accurate tax liability estimate as per the latest Union Budget 2025.
C. Capital Gains (Equity Shares, Mutual Funds & ETFs)
Capital gains are the profits earned from selling capital assets. In this income tax calculator for FY 2025–26 (AY 2026–27), we focus exclusively on equity-based capital gains—including listed stocks, equity mutual funds, and Exchange-Traded Funds (ETFs). These are the most common asset classes for Indian investors and have distinct tax treatment under the new tax regime.
Capital gains from real estate, gold, debt mutual funds, or unlisted shares are excluded from this tool. If you have such assets, we recommend consulting a qualified tax advisor or using a dedicated capital gains tax calculator to ensure compliance with applicable sections like Section 112 and Section 54.
💡 Tip: Use the fields above to input Short-Term Capital Gains (STCG) for assets held under 12 months and Long-Term Capital Gains (LTCG) for those held over 12 months. Tax rates differ as per Section 111A and Section 112A of the Income Tax Act.
📑Reference:Clear tax | Short term capital gainsClear tax | Long term capital gains
Capital Gains Tax Rules – FY 2025–26 (New Tax Regime)
- Short-Term Capital Gains (STCG on Equity): Gains from the sale of listed equity shares, equity mutual funds, or ETFs held for less than 12 months are taxed at a flat 15% under Section 111A, plus applicable cess and surcharge. This rate applies even under the New Tax Regime for FY 2025–26.
- Long-Term Capital Gains (LTCG on Equity): If such equity assets are held for more than 12 months, gains exceeding ₹1 lakh annually are taxed at 10% under Section 112A without indexation benefits. This tax rule continues in FY 2025–26 and is applicable across income levels.
Taxation of Short-Term Capital Gains (STCG) – FY 2025–26
- For Financial Year 2025–26 (Assessment Year 2026–27), Short-Term Capital Gains (STCG) from listed equity shares and equity mutual funds are taxed at a flat 20% under the New Tax Regime, with no exemption or rebate applicable.
- In FY 2024–25, STCG on equity may still qualify for a Section 87A rebate if your total taxable income is below ₹7 lakh (as per previous rebate rules).
- However, in FY 2025–26, the 87A rebate is not available on STCG. This means the entire gain is fully taxable at 20%, regardless of your income slab.
Long-Term Capital Gains (LTCG) Tax Rules – FY 2025–26 (New Regime)
- Under the New Tax Regime for FY 2025–26, Long-Term Capital Gains (LTCG) from listed equity shares, equity mutual funds, and ETFs are taxed at a flat 12.5% (plus applicable surcharge and cess).
- You are allowed a standard LTCG exemption of ₹1,25,000 per financial year. Tax applies only to gains exceeding this threshold.
- Section 87A rebate does not apply to LTCG. Even if your total income is below the rebate limit, this category of income remains taxable.
⚠️ This income tax calculator supports capital gains taxation for equity assets only — including stocks, equity mutual funds, and ETFs. If you're looking to calculate capital gains tax on property sales, gold investments, or debt funds, we recommend consulting a qualified tax advisor or chartered accountant for accurate guidance under Indian tax laws.
D. Income from Other Sources (Interest, Dividends, Gifts)
Income classified under “Income from Other Sources” includes interest from savings accounts, fixed deposits (FDs), recurring deposits (RDs), dividends from domestic companies, winnings (lottery or games), and taxable gifts exceeding ₹50,000. These are taxed as per the applicable income slab for FY 2025–26.
⚠️ This Income Tax Calculator currently does not support business income, freelance earnings, or professional consultancy income due to the complexity of calculating allowable expenses, depreciation, GST, and presumptive taxation schemes. For such cases, we strongly recommend consulting a certified tax consultant or CA in India to ensure accurate computation and compliance.
Types of Income from Other Sources (FY 2025–26)
- Bank Interest Income: Interest earned on savings accounts, fixed deposits (FDs), and recurring deposits (RDs) is fully taxable under the head "Income from Other Sources". There is no exemption limit unless claimed under Section 80TTA (up to ₹10,000 on savings interest for individuals/HUFs under the old regime).
- Dividend Income: Dividends received from listed Indian companies and mutual funds are taxable at your applicable income slab rate under the new tax regime. Ensure to report them even if TDS has already been deducted.
- Winnings from Lottery, Games, & Contests: Prize money from lotteries, online games, TV shows, quiz competitions, or any gambling activity is taxed at a flat rate of 30% (plus surcharge and cess) without allowing any deductions or exemptions.
- Taxable Gifts Received: If the aggregate value of gifts received (cash, property, or valuables) exceeds ₹50,000 in a financial year from non-relatives, the entire amount becomes taxable under this head. Exceptions apply to gifts received from specified relatives or on special occasions like marriage.
⚠️ This calculator currently does not support business income, freelance income, or professional consultancy income. These income types involve complex tax treatments, including presumptive taxation schemes (Sec 44ADA/44AE), expense deductions, depreciation, and GST filings. For accurate tax liability estimation and ITR filing, we strongly recommend consulting a certified tax advisor or CA.
Tax Deductions & Exemptions Under New Tax Regime – FY 2025–26
The New Tax Regime for FY 2025–26 (AY 2026–27) offers simplified and lower income tax slab rates, but it also limits most traditional deductions available under the old regime. While popular exemptions like HRA, 80C, and 80D are disallowed, certain key deductions are still applicable. Below is a detailed overview of the allowed tax deductions and exemptions to help you accurately calculate your net taxable income:
A. Standard Deduction – New Tax Regime FY 2025–26
A standard deduction of ₹75,000 is available for all salaried taxpayers and pensioners under the New Tax Regime for FY 2025–26 (AY 2026–27). This automatic deduction is applied before calculating taxable income, offering instant relief and reducing overall income tax liability. It replaces earlier allowances like conveyance and medical reimbursements and does not require any documentation or proof.
B. National Pension System (NPS) Deduction – Section 80CCD(2)
Under the New Tax Regime for FY 2025–26, employer contributions to the National Pension System (NPS) are eligible for a tax deduction under Section 80CCD(2). This deduction is available for both private sector and government employees, up to:
- 10% of basic salary + dearness allowance (DA) for private sector employees.
- 14% of basic salary + DA for central government employees.
This deduction is over and above the standard deduction and helps reduce your total taxable income while contributing to retirement savings. Unlike Section 80C benefits, which are not available under the new regime, Section 80CCD(2) remains fully applicable.
C. Provident Fund (PF) Contribution – Tax Treatment in FY 2025–26
Employer contributions to the Employee Provident Fund (EPF) are tax-exempt up to ₹7.5 lakh annually under the combined limit for EPF, NPS, and Superannuation Funds, as per the Union Budget 2025 guidelines. This exemption is applicable under both the New Tax Regime and Old Tax Regime.
However, employee contributions do not qualify for Section 80C deductions under the New Regime. Despite that, PF remains an important factor in CTC to in-hand salary conversion and helps in long-term retirement planning. For accurate income tax estimation, this calculator accounts for your chosen PF deduction structure (12% of Basic Salary or Flat ₹1,800/month).
D. Rental Income Tax Deductions – FY 2025–26 (New Regime)
Rental income from let-out residential or commercial property qualifies for key deductions under the head “Income from House Property”. These deductions help reduce your taxable income and overall income tax liability under the New Tax Regime for FY 2025–26.
- 30% Standard Deduction: As per Section 24(a) of the Income Tax Act, you can claim a flat 30% deduction on the Net Annual Value (NAV) of the rental income to account for repairs, maintenance, and property management expenses — regardless of actual spending.
- Interest on Home Loan (Section 24b): If you’ve availed a housing loan for a let-out property, the entire interest amount paid during the financial year is fully deductible from your rental income — there is no upper limit on this deduction.
E. Other Exemptions & Deductions
Certain exemptions under Section 10 are available to taxpayers under the New Tax Regime:
- Gratuity Exemption: Tax-free up to ₹20 lakh upon retirement under Section 10(10).
- Leave Encashment: Exempt up to ₹25 lakh for private-sector employees upon retirement under Section 10(10AA).
- Voluntary Retirement Compensation: Compensation up to ₹5 lakh is tax-exempt under Section 10(10C).
- Allowances for Specially-Abled Individuals: Transport allowances and other benefits are tax-exempt for eligible individuals.
- Tax-Exempt Perquisites: Certain employer-provided perquisites for official duties are non-taxable.
- Tax-Free Gifts: Gifts up to ₹50,000 per financial year are exempt from tax under Section 56(2).
How to Calculate Income Tax
📑Reference:Economic Times | Income tax
Step 1: Calculate Your Taxable Income
Your taxable income for FY 2025–26 (AY 2026–27) is calculated by summing up all your income sources—such as salary, rental income, and other income—and then subtracting applicable deductions under the New Tax Regime. These deductions include the standard deduction, employer NPS contributions, PF contributions, and other exemptions allowed by law.
- Salary Income: ₹48,00,000
- Other Income (e.g., interest, dividends): ₹1,00,000
- Standard Deduction: ₹75,000 (auto-applied for salaried and pensioned individuals)
- Provident Fund (PF) Deduction: ₹72,000 (employer contribution portion)
- Employer NPS Deduction: ₹60,000 (under Section 80CCD(2))
- Other Allowable Deductions: ₹60,000 (gratuity, leave encashment, perquisites)
Once your net taxable income is computed, the calculator applies the latest income tax slabs for FY 2025–26 from the Union Budget 2025. This step ensures an accurate income tax liability estimate under the New Tax Regime.
Taxable Income (Before Rental Adjustments) = ₹46,33,000
Step 2: Compute Taxable Rental Income (Let-Out Property)
Under the Income from House Property head, rental income from a let-out or vacant property is eligible for two key deductions: a 30% standard deduction on net annual value and full home loan interest deduction as per Section 24(b) of the Income Tax Act. These exemptions help reduce your taxable rental income under the New Tax Regime for FY 2025–26.
- Rental Income (Declared Annual Value): ₹2,00,000
- Standard Deduction (30% of Rental Income): ₹60,000
- Interest on Home Loan (Section 24): ₹1,00,000
After applying both deductions, your net taxable rental income becomes ₹40,000. This value is added to your overall taxable income for final income tax calculation in FY 2025–26. These adjustments are crucial for salaried taxpayers with housing loans or rental properties.
✅ Net Taxable Rental Income (Post Deductions): ₹40,000
🧾 Final Gross Taxable Income for FY 2025–26: ₹46,73,000
Step 3: Final Income Tax Calculation & Section 87A Rebate (FY 2025–26)
After computing the net taxable income, the applicable New Tax Regime slab rates are used to calculate your total income tax liability. The tax is computed in a progressive manner—each income slab is taxed at its corresponding rate. Additionally, if your total income is up to ₹12,00,000, you may qualify for a Section 87A rebate of ₹60,000, making you eligible for zero tax.
Income Tax Slabs under New Regime – FY 2025–26 (AY 2026–27)
| Income Range | Tax Rate |
|---|---|
| Up to ₹4,00,000 | 0% |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Income Tax Slabs for FY 2024–25 (AY 2025–26) – New Tax Regime
The following are the official income tax slab rates under the New Tax Regime for Financial Year 2024–25 (Assessment Year 2025–26). These slabs are used to compute your tax liability on net taxable income after applying deductions such as standard deduction, PF, and NPS. A rebate under Section 87A of ₹25,000 is available for incomes up to ₹7,00,000.
| Income Range | Tax Rate |
|---|---|
| Up to ₹3,00,000 | 0% |
| ₹3,00,001 – ₹7,00,000 | 5% |
| ₹7,00,001 – ₹10,00,000 | 10% |
| ₹10,00,001 – ₹12,00,000 | 15% |
| ₹12,00,001 – ₹15,00,000 | 20% |
| Above ₹15,00,000 | 30% |
🧾 Note: These tax rates are applicable under the New Tax Regime only. Individuals earning up to ₹7,00,000 are eligible for a full rebate under Section 87A, effectively making their income tax zero.
Income Tax Slab-Wise Calculation (FY 2025–26 – New Regime)
💡 Total Base Income Tax (Before Capital Gains & Rebate): ₹9,81,900
Step 4: Capital Gains Tax Computation (Equity Assets Only)
Capital gains tax is computed separately under the Income Tax Act. This tool supports gains from listed equity shares, equity mutual funds, and ETFs. Real estate or gold capital gains are not covered.
Short-Term Capital Gains (STCG) – FY 2025–26
Profits from equity assets sold within 12 months are taxed at a flat rate of 20% under the New Tax Regime (FY 2025–26). No Section 87A rebate applies to STCG.
- STCG Reported: ₹2,00,000
- STCG Tax (20% of ₹2,00,000): ₹40,000
Long-Term Capital Gains (LTCG) – FY 2025–26
Profits from equity assets held for over 12 months are taxed at 12.5% on gains exceeding ₹1,25,000 annually. No indexation is allowed under the New Regime.
- LTCG Reported: ₹3,00,000
- Exemption: ₹1,25,000
- Taxable LTCG: ₹1,75,000
- LTCG Tax (12.5% of ₹1,75,000): ₹21,875
Final Tax Summary After Capital Gains Tax
Step 5: Surcharge & Marginal Relief – FY 2025–26 (New Tax Regime)
In India, high-income earners under the New Income Tax Regime for FY 2025–26 may be subject to an additional surcharge on income tax once their taxable income exceeds specific thresholds. Marginal relief is offered in select cases to ensure that the additional tax payable does not exceed the excess income beyond the surcharge limit.
Surcharge Slabs for Income Tax – FY 2025–26
Surcharge is levied on total income (including capital gains) based on the slabs below:
| Total Taxable Income | Surcharge Rate |
|---|---|
| Up to ₹50,00,000 | No Surcharge |
| ₹50,00,001 – ₹1,00,00,000 | 10% |
| ₹1,00,00,001 – ₹2,00,00,000 | 15% |
| Above ₹2,00,00,000 | 25% |
Surcharge Application Example
Total Taxable Income: ₹50,48,000
Since your income exceeds the ₹50 lakh surcharge threshold, a 10% surcharge is applied on the computed income tax.
What is Marginal Relief in Income Tax?
Marginal relief ensures that the additional tax payable due to surcharge does not exceed the amount by which your income exceeds the surcharge threshold. If it does, the excess surcharge is reduced via marginal relief adjustment.
Marginal Relief Example (FY 2025–26)
In this case, the surcharge on income tax exceeds the actual income difference over ₹50 lakh. Hence, marginal relief is applied to ensure fair taxation under the new regime.
🧾 Final Tax Summary – After Surcharge & Marginal Relief
Step 6: Health & Education Cess on Income Tax – FY 2025–26
As per the Indian Income Tax Act, a 4% Health and Education Cess is levied on the total income tax payable. This includes all taxes such as base income tax, surcharge, and after applying any marginal relief. The cess is charged after computing income tax and surcharge to fund social welfare schemes.
How to Calculate Health & Education Cess on Tax
The cess applies uniformly at 4% and is calculated on your total tax liability (post-surcharge). This is a mandatory addition to your final income tax calculation under both old and new regimes.
- Total Tax Before Cess: ₹11,28,000
- Health & Education Cess (4% of ₹11,28,000): ₹45,120
Final Tax Payable – FY 2025–26 (New Regime)
Key Differences in Income Tax Rules – FY 2024–25 vs FY 2025–26 (New Tax Regime)
The Income Tax Slabs and Rebate Limits under the New Tax Regime have been significantly updated in FY 2025–26 (AY 2026–27). These changes affect tax liability, rebate eligibility, and overall in-hand salary. Here’s a side-by-side comparison to help you understand how the new rules impact your take-home income:
| Feature | FY 2024–25 | FY 2025–26 |
|---|---|---|
| Rebate Threshold (Section 87A) | Up to ₹7,00,000 | Up to ₹12,00,000 |
| Maximum Rebate Allowed | ₹25,000 | ₹60,000 |
| Tax-Free Income Limit | ₹7,00,000 | ₹12,00,000 |
| Highest Income Tax Slab Starts At | ₹15,00,000 (30%) | ₹24,00,000 (30%) |
Old Tax Regime: Still Relevant?
Compare old vs new regime for better planning in FY 2025-26.
How to Save More on Taxes?
Maximize savings with deductions and exemptions.
Use our Income Tax Calculator to check your tax liability and make informed financial decisions.
Income Tax Related FAQs
Income tax is calculated by aggregating income from salary, rental property, capital gains, and other sources. Deductions like the ₹75,000 standard deduction, NPS contributions under Section 80CCD(2), and home loan interest (Section 24) are subtracted. Tax is then computed based on the updated slab rates introduced in Union Budget 2025, followed by surcharge, marginal relief, and 4% health and education cess.
Your total taxable income for FY 2025–26 includes salary income (basic, HRA, bonus, perquisites), rental income (after 30% standard deduction and municipal tax deduction), equity capital gains (STCG and LTCG), and other income like bank interest, dividends, lottery winnings, and taxable gifts.
The New Tax Regime slabs for FY 2025–26 are: 0% up to ₹4,00,000; 5% from ₹4,00,001 to ₹8,00,000; 10% from ₹8,00,001 to ₹12,00,000; 15% from ₹12,00,001 to ₹16,00,000; 20% up to ₹20,00,000; 25% up to ₹24,00,000; and 30% above ₹24,00,000. Rebate under Section 87A applies up to ₹12,00,000.
Short-Term Capital Gains (STCG) on equity are taxed at 20%, and Long-Term Capital Gains (LTCG) on equity are taxed at 12.5% after a ₹1,25,000 exemption. These rates apply under the New Tax Regime for FY 2025–26 and are not eligible for Section 87A rebate.
No, under the New Tax Regime, deductions like HRA, Section 80C (LIC, PPF, ELSS), and 80D (health insurance) are not allowed. Only specific deductions such as standard deduction, employer NPS contribution (Section 80CCD(2)), and rental income deductions are applicable.
Rental income is taxed under 'Income from House Property' after applying a 30% standard deduction and full deduction for home loan interest. Even unoccupied properties may be taxed based on Gross Annual Value. Municipal taxes are also deductible before calculating Net Annual Value.
Employer NPS contributions up to 10–14% of basic salary are deductible under Section 80CCD(2). Employer PF contributions are exempt up to ₹7.5 lakh annually. These deductions reduce taxable income even under the New Tax Regime and support retirement savings.
For FY 2025–26, if your total income is up to ₹12,00,000, you are eligible for a rebate of up to ₹60,000 under Section 87A. This means zero tax liability if your taxable income stays within this limit, excluding capital gains which are not covered by this rebate.
Yes, a 4% Health and Education Cess is levied on the total income tax payable, including surcharge and after applying marginal relief. It is calculated at the final step to determine total tax liability for FY 2025–26.
Yes, salaried individuals can switch between the Old and New Tax Regimes every financial year. However, business owners and professionals can opt out of the New Regime only once in their lifetime unless they discontinue their business.