Calculating income tax can be complex, especially when considering deductions, exempt allowances, and income from various sources. For those unfamiliar with the Income Tax Act, it can be challenging to calculate tax liabilities based on applicable slab rates. That’s where the ClearTax Income Tax Calculator comes in. It simplifies manual calculations without the need for in-depth knowledge of tax laws.

What is the Income Tax Calculator?

The Cleartax Income tax calculator is a simple and easy-to-use online tool designed to calculate your tax liability in detail, according to the provisions and rules of the Income Tax Act 1961. It enables you to compare your tax liability between the old and new tax regimes, making choosing the more beneficial option easier. It’s especially useful if you do not understand the section, provisions and technical aspects of the government’s income tax filing portal. Our calculator has been updated in line with tax changes proposed in the Union Budget 2025. You can plan your taxes and tax liability for relevant financial years more effectively and make informed financial decisions.  

How to Use the Income Tax Calculator for FY 2024-25 (AY 2025-26) and FY 2025-26 (AY 2026-27)?

Following are the steps to use the tax calculator:

Step 1: Choose the financial year for which you want your taxes to be calculated.

Step 2: Select your age accordingly. Tax liability under the old regime differs based on the age groups.

Step 3: Click on ‘Continue’

Step 4: Enter your salary, i.e. salary before deducting various exemptions such as HRA and so on. If LTA deduction is applicable to you, reduce it from salary and enter the net figure. There is a field available for exempt allowances. Enter the particulars if it applies to your case.

Step 5: Along with taxable salary, you must enter other details such as interest income, rental income, interest paid on home loan for rented, and interest paid on loan for self-occupied property.

Step 6: For Income from Digital Assets, enter the net income (Sale consideration (-) Cost of Acquisition).

Step 7: Click on ‘Continue’ again.

Step 8: You can also enter your tax-saving investments under sections 80C, 80D, 80G, 80E, and 80TTA, if applicable to your case.

Step 9: Click on ‘Calculate’ to calculate your tax liability. You will be able to compare the old and new tax regimes.

What are the Income Tax Slab Rates for FY 2024-25 and FY 2025-26?

The income tax slab rates for both old and new regimes for FY 2024-25 and FY 2025-26 are given below:

• Income Tax Slab Rates under the new regime for FY 2025-26:

Note: No income tax for income up to Rs. 12 Lakhs. This is because of a rebate applicable to the new regime, which is Rs. 60,000. But rebates are not applicable for special tax income.

• Income tax slabs under the new regime for FY 2024-25:

• Income tax slabs under the old regime (remained consistent through the years)
  • Individuals less than 60 Years of Age

• Resident Individuals Aged 60-80 Years

• Resident Individuals Aged more than 80 Years

Surcharge and Education Cess

If your income exceeds a certain threshold, you will incur additional taxes on top of the existing rates. This additional tax specifically targets high-income earners.

The surcharge rates are as follows:

• 10% of Income tax if total income > Rs.50 lakh and < Rs.1 crore,
• 15% of Income tax if total income > Rs.1 crore and < Rs.2 crore,
• 25% of Income tax if total income > Rs.2 crore and < Rs.5 crore,
• 37% of Income tax if total income > Rs.5 crore    

Note: The highest surcharge rate of 37% has been reduced to 25% under the new tax regime.

Additional Health and Education cess at the rate of 4% will be added to the income tax liability.

There are certain deductions/exemptions which are not available under the New regime.

Rebate u/s 87A

When the total taxable income of the taxpayer is within a specified limit, rebate can be claimed, making their tax liability zero. The specified limits are given below:

*From FY 2025-26, rebate is not applicable for income charged under special rates. At any financial year, rebate is not applicable on long term capital gains under section 112A.

Calculation of Income Tax on Salary 

To calculate Income tax, include income from all sources. Include:

• Income from Salary 
• Income from House Property 
• Income from Capital Gains 
• Income from Business/Profession 
• Income from Other Sources

Income tax calculation Salaried Employees

Income from salary = Basic salary + HRA + Special Allowance + Transport Allowance + any other allowance.

Some components of your salary are exempt from tax, such as telephone bill reimbursement and leave travel allowance. If you receive HRA and live on rent, you can claim an exemption on HRA. Calculate the exempt portion of HRA using this HRA Calculator.

On top of these exemptions, a standard deduction of Rs. 50,000 is available under the old regime, and Rs. 75,000 under the new regime.

Let’s understand income tax calculation under both old and new tax regimes by way of an example:

Neha receives a Basic Salary of Rs 1 lakh per month. HRA of Rs 50,000. Special Allowance of Rs 21,000 per month. LTA of Rs 20,000 annually. Neha pays a rent of Rs 40,000 and lives in Delhi.

Neha has income from interest from a savings account of Rs 8,000 and a fixed deposit interest income of Rs 12,000 during the year. Neha has made some investments to save income tax. PPF investment of Rs 50,000. ELSS purchase of Rs 20,000 during the year. LIC premium of Rs 8,000. Medical insurance paid of Rs 12,000. Here are the deductions Neha can claim under the old tax regime.

Calculation of gross taxable income and tax liability in India (Old regime):

Calculation of gross taxable income and tax liability in India (New regime):

Illustration for Tax Calculation for Slab Rates updated as on the Budget 2025

Mr A has a salary income of Rs. 10.75 lakhs for FY 2025-2026. Income from other sources is Rs. 2 lakhs. The income tax calculation for Mr A for the FY 2025-2026 under new regime is as follows:

Note:

• It is to be noted that marginal relief on rebate is still available for the slab rates propsed in budget 2025.
• Also, this rebate of Rs. 60,000 is not applicable for income taxed under special rates.

Benefits of Using Income Tax Calculator

Using our online Income tax calculator offers several benefits such as:

Accuracy

Income tax calculator calculates your tax liability accurately eliminating any potential errors that result from calculating the tax liability manually. 

Swift and Hassle-free

The Income tax calculator is a tool which calculates your tax liability swiftly within few seconds and can be used anytime and anywhere.

User-friendly

The Income tax calculator is a very user-friendly tool. Simply input your income and deduction details to accurately calculate your tax liability.

Better Financial Management and Tax Planning

Understanding your tax liability in advance is essential for effective financial planning. By knowing your potential tax obligations, you can allocate your budget wisely and invest in tax-saving instruments like ELSS, PPF,etc. to reduce the tax liability.