An Income Tax Calculator helps individuals and businesses estimate their tax liability based on:
✅ Annual Income (Salary, Business, Capital Gains, etc.)
✅ Applicable Deductions (80C, 80D, HRA, etc.)
✅ Tax Regime (Old vs New)

This tool ensures accurate tax planning and helps optimize savings under Section 80C, 80D, and other exemptions.

How Income Tax is Calculated in India (FY 2024-25)

1. Tax Slabs (New Regime – Default)

Rebate (Section 87A):

• Full tax rebate if taxable income ≤ ₹7,00,000 (New Regime).

2. Tax Slabs (Old Regime – Optional)

Standard Deduction: ₹50,000 (for salaried individuals).

Step-by-Step Tax Calculation Example

Annual Income: ₹12,00,000 (Salary + Other Income)
Deductions (Old Regime):

• 80C (PPF/ELSS): ₹1,50,000

• 80D (Health Insurance): ₹25,000

• HRA Exemption: ₹1,20,000

Step 1: Calculate Gross Taxable Income

$$₹12,00,000-(₹1,50,000+₹25,000+₹1,20,000)=\ast \ast ₹9,05,000\ast \ast$$

Step 2: Apply Tax Slabs (Old Regime)

• Up to ₹2,50,000: 0% → ₹0

• ₹2,50,001 – ₹5,00,000: 5% → ₹12,500

• ₹5,00,001 – ₹9,05,000: 20% → ₹81,000

• Total Tax: ₹12,500 + ₹81,000 = ₹93,500

Step 3: Add Cess

$$₹93,500+4\%\text{ cess}=\ast \ast ₹97,240\ast \ast$$

New Regime Tax (for comparison): ~₹90,000 (Lower due to no deductions but higher base slabs)

Key Deductions to Reduce Taxable Income

Old vs New Tax Regime: Which is Better?

Tip: Salaried individuals must choose regime at the start of FY (cannot switch later).

Benefits of Using an Income Tax Calculator

✅ Accurate Liability Estimate – Avoid surprises during filing
✅ Tax-Saving Planning – Optimize investments under 80C, 80D
✅ Compare Regimes – Old vs New tax regime analysis
✅ Free & Fast – No manual calculations

FAQs on Income Tax Calculation

1. What is the last date for ITR filing?

• July 31 (for individuals without audit).

2. Can I switch tax regimes every year?

• Yes, but salaried employees must inform employer at the start of FY.

3. Is LTCG tax included in income tax?

• Yes, but calculated separately (10% above ₹1L for equity).

4. How is tax calculated for freelancers?

• Under “Profits & Gains from Business” (can claim expenses as deductions).

5. What if I miss filing ITR?

• Penalty up to ₹5,000 + interest on unpaid tax.

Try Our Free Income Tax Calculator

Plan your taxes efficiently with our Income Tax Calculator:
📌 Old vs New regime comparison
📌 Deduction optimization tips
📌 Cess & surcharge calculations

Calculate Your Tax Now & Save Smartly!

Key Takeaways

• New regime benefits those earning ₹7.5L-15L with fewer deductions

• Old regime saves tax if you have investments (80C, 80D, HRA)

• Rebate available if income ≤ ₹7L (New Regime)