Income Tax Calculator FY 2025-26: Slab Rates & Deductions
The ₹12.75 Lakh Sweet Spot
Under the new tax regime for FY 2025-26, you pay zero tax on income up to ₹12.75 lakh (gross). Here’s why: ₹75,000 standard deduction reduces your taxable income to ₹12 lakh, and the Section 87A rebate wipes out the entire tax liability at that level. This makes the new regime overwhelmingly better for most salaried employees earning under ₹13 lakh.
New Tax Regime Slabs (FY 2025-26)
| Taxable Income Slab | Tax Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹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% |
Plus 4% Health & Education Cess on total tax. Surcharge applies for income above ₹50 lakh.
Old Tax Regime Slabs (with deductions)
| Taxable Income Slab | Tax Rate |
|---|---|
| Up to ₹2,50,000 | Nil |
| ₹2,50,001 – ₹5,00,000 | 5% |
| ₹5,00,001 – ₹10,00,000 | 20% |
| Above ₹10,00,000 | 30% |
The old regime has fewer slabs but allows deductions under 80C (₹1.5L), 80D (health insurance), 80E (education loan interest), HRA, LTA, and more.
Worked Example: ₹15 LPA Salary
New Regime (no deductions except standard)
- Gross Salary: ₹15,00,000
- Standard Deduction: ₹75,000
- Taxable Income: ₹14,25,000
- Tax: ₹20,000 (0–4L) + ₹20,000 (4–8L) + ₹40,000 (8–12L) + ₹33,750 (12–14.25L) = ₹1,13,750
- Cess (4%): ₹4,550
- Total Tax: ₹1,18,300
Old Regime (with ₹3L deductions: 80C + HRA partial)
- Gross Salary: ₹15,00,000
- Standard Deduction: ₹50,000
- 80C: ₹1,50,000 | HRA Exemption: ₹1,50,000
- Taxable Income: ₹11,50,000
- Tax: ₹0 (0–2.5L) + ₹12,500 (2.5–5L) + ₹1,00,000 (5–10L) + ₹45,000 (10–11.5L) = ₹1,57,500
- Cess: ₹6,300
- Total Tax: ₹1,63,800
Verdict: At ₹15 LPA with moderate deductions of ₹3 lakh, the new regime saves ₹45,500. For the old regime to be cheaper, you’d need total deductions exceeding approximately ₹4.25 lakh.
Decision Framework: Which Regime to Choose
| Choose New Regime if... | Choose Old Regime if... |
|---|---|
| Your total deductions are below ₹4–4.5 lakh | You have high HRA + 80C + 80D + NPS deductions exceeding ₹4.5 lakh |
| You earn under ₹12.75 lakh (zero tax) | You have a home loan with interest above ₹2 lakh |
| You don’t want the hassle of savings proofs | You’re maximizing every possible deduction |
Use our old vs new tax regime calculator to compare your exact numbers in both regimes.
Deductions Available Only in Old Regime
- Section 80C: ₹1.5 lakh (PF, PPF, ELSS, life insurance, tuition fees)
- Section 80D: ₹25,000–₹1 lakh (health insurance premiums)
- Section 80E: Education loan interest (no limit)
- Section 24(b): Home loan interest up to ₹2 lakh
- HRA exemption (as per three-condition calculation)
- LTA, professional tax deduction, NPS 80CCD(1B) extra ₹50K