India Tax Simulator FY 2025-26
Income Details
Deductions Applies mostly to Old Regime
Max allowed is ₹1,50,000
Max allowed is ₹2,00,000 (Self-occupied)
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New Tax Regime
Old Tax Regime
Income Breakdown Comparison
New Regime Computation
| Income Slab | Rate | Tax |
|---|
Old Regime Computation
| Income Slab | Rate | Tax |
|---|
Comprehensive Guide to Indian Income Tax (FY 2025-26)
New Tax Regime (Default)
Introduced to simplify taxes, the New Regime offers lower tax rates but removes most exemptions and deductions (like 80C, HRA, etc.). As per Budget 2025/2026, it is highly attractive for the middle class.
- Standard Deduction: ₹75,000 for salaried employees.
- Tax-Free Limit: Income up to ₹12 Lakhs incurs ZERO tax due to an enhanced rebate of ₹60,000 under Section 87A.
- Effective zero-tax salary: For a salaried person, a gross salary up to ₹12,75,000 is tax-free (₹12.75L - ₹75k standard deduction = ₹12L taxable = 0 tax).
New Tax Slabs
- Up to ₹4 Lakhs Nil
- ₹4,00,001 to ₹8,00,000 5%
- ₹8,00,001 to ₹12,00,000 10%
- ₹12,00,001 to ₹16,00,000 15%
- ₹16,00,001 to ₹20,00,000 20%
- ₹20,00,001 to ₹24,00,000 25%
- Above ₹24 Lakhs 30%
Old Tax Regime
The traditional system allows you to reduce your taxable income by claiming various deductions and exemptions. It is beneficial if you have heavy investments, home loans, and rent receipts.
- Standard Deduction: ₹50,000 for salaried employees.
- Tax-Free Limit: Income up to ₹5 Lakhs incurs ZERO tax due to a rebate of ₹12,500 under Section 87A.
- Key Deductions Allowed: Section 80C (up to ₹1.5L), 80D (Health Insurance), Sec 24b (Home loan interest up to ₹2L), HRA, LTA.
What is Marginal Relief?
In the New Regime, income up to ₹12L is tax-free. But what if you earn ₹12,10,000? Without relief, your tax would suddenly jump to ₹61,500 just for earning ₹10k extra!
Marginal Relief ensures that the tax payable does not exceed the extra income earned above ₹12 Lakhs. In this example, your tax is capped at ₹10,000.