Tax tools and guides

Since the new tax regime became the default under Section 115BAC, every taxpayer effectively chooses between two ways of being taxed. The new regime offers wider, gentler slabs — nothing up to ₹4 lakh, then 5% to 10% to 15% and upward in ₹4 lakh steps to 30% above ₹24 lakh — but disallows almost every deduction, including 80C, 80D, and HRA. The old regime keeps higher rates over narrower slabs (nil to ₹2.5 lakh, then 5%, 20%, and 30%) but lets you subtract a long list of deductions to shrink the income that is actually taxed.

The right choice depends entirely on how much you can deduct. Someone who maxes out 80C, pays a home-loan interest, and claims HRA may still come out ahead under the old regime; someone with few deductions almost always pays less under the new one. Because the answer is specific to each person’s numbers, the only reliable way to decide is to compute both — which is exactly what the Income Tax Calculator does, showing the two figures side by side and naming the cheaper one.

The headline feature of the new regime for FY 2025-26 is that a salaried person earning up to ₹12.75 lakh can pay zero tax. This works through two provisions stacked together. First, a standard deduction of ₹75,000 is subtracted from salary income, so ₹12.75 lakh of salary becomes ₹12 lakh of taxable income. Second, the Section 87A rebate — up to ₹60,000 under the new regime — wipes out the tax on taxable income up to ₹12 lakh entirely. The slab tax on ₹12 lakh works out to exactly ₹60,000 (₹20,000 in the 5% band plus ₹40,000 in the 10% band), and the rebate cancels all of it.

Just above that threshold, a provision called marginal relief prevents an unfair cliff: if your taxable income is, say, ₹12.1 lakh, the tax is capped so you never pay more than the ₹10,000 by which you crossed ₹12 lakh (plus cess). The Income Tax Calculator applies the standard deduction, the rebate, and marginal relief automatically, so the zero-tax result and the gentle ramp just above it appear exactly as the law intends.

For salaried people who rent, the House Rent Allowance exemption is frequently the largest single deduction available under the old regime, and it is the one most often miscalculated. The exempt portion of HRA is not simply the HRA your employer pays — it is the least of three amounts: the actual HRA received, the rent you pay minus 10% of your basic salary, and 50% of basic salary if you live in a metro city (40% if you do not). Whichever of these three is smallest is your exemption; the rest of the HRA is taxable.

Because the rule turns on the interaction of salary structure, rent, and city, the exemption can vary widely between two people earning the same salary. The HRA Calculator computes the least-of-three for you and shows which of the three amounts bound the result, so you can see whether paying slightly more rent or restructuring salary would change the exemption. Since claiming HRA also requires rent receipts — and a landlord’s PAN above ₹1 lakh of annual rent — the HRA Calculator pairs naturally with the Rent Receipt Generator.

Most salaried people never pay their income tax in a single lump — it is deducted in twelve monthly instalments as TDS (Tax Deducted at Source) by the employer, who estimates your annual tax and spreads it across the year. The monthly TDS is, in essence, your projected annual tax divided across the remaining months. Understanding it matters because the regime you declare to your employer at the start of the year determines how much is deducted: declare the new regime and a salary under ₹12.75 lakh, and your TDS may be nil; declare the old regime, and it depends on the deductions you commit to.

The TDS Calculator estimates the monthly deduction from your annual salary under either regime, using the same engine as the Income Tax Calculator so the figures are consistent. It helps you sanity-check the TDS on your payslip, plan your cash flow, and choose the regime to declare to your employer — a decision that is easier to get right at the start of the year than to correct at filing time.

The three tools form one workflow. Start with the Income Tax Calculator to compare your tax under both regimes and find the cheaper one. If the old regime looks competitive, use the HRA Calculator to pin down your exemption precisely, since that figure feeds straight back into the old-regime deductions and can tip the comparison. Then use the TDS Calculator to see what your employer should be deducting each month under the regime you have chosen, and to decide which regime to declare. Every tool uses the verified FY 2025-26 slabs and runs entirely in your browser — nothing you enter is uploaded or stored.

These calculators are informational and use the published slabs, rebate, and cess for FY 2025-26. Tax rules change at the Union Budget each February, and individual situations vary, so for filing or any significant decision, confirm the current rules against the Income Tax Department and consult a chartered accountant.