How the Income Tax Calculator Works
Select your tax regime — new or old — and enter your gross annual income. Under the old regime, you can also enter deductions such as Section 80C, 80D, HRA exemption and other eligible deductions.
The calculator applies the applicable slab rates to your taxable income (income after deductions and standard deduction), then applies the Section 87A rebate if your taxable income falls within the rebate threshold, and finally adds 4% health and education cess.
The new tax regime is the default regime as per current rules, offering lower slab rates but fewer deductions compared to the old regime, which allows deductions like 80C and HRA but has higher slab rates.
Formula Used
Tax is calculated slab-by-slab on taxable income, a Section 87A rebate is applied where eligible, and 4% cess is added on the resulting tax:
Total Tax = (Slab-wise Tax − Section 87A Rebate) × 1.04- Taxable IncomeGross income minus standard deduction and eligible deductions
- 87A RebateFull tax rebate if taxable income is within the regime's rebate threshold
- Cess4% health and education cess on tax payable after rebate
Example Calculation
Suppose your gross annual income is ₹18,00,000 under the new tax regime, with standard deduction claimed.
- Annual Income₹18,00,000
- RegimeNew Regime
- Standard Deduction₹75,000
- ResultTotal Tax Payable ≈ ₹1,50,800 (Effective Rate: 8.38%)
Important Assumptions
- Tax slabs used are for FY 2025-26 (AY 2026-27) as per the Union Budget 2025 announcements.
- This calculator does not compute surcharge, which applies only to very high incomes (generally above ₹50 lakh) — it is relevant mainly for high-net-worth individuals.
- Old regime deductions (80C, 80D) are capped at their statutory limits (₹1,50,000 and ₹1,00,000 respectively) within this calculator.
- This tool provides an estimate only and does not constitute tax advice — please consult a chartered accountant for your specific tax filing.