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Income Tax Calculator (New Regime)

Standard Deduction of ₹75,000 (New) / ₹50,000 (Old) will be applied.

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How to use the Complete Guide to Income Tax Calculation (FY 2024-25)

The EzCalcy Income Tax Calculator is your comprehensive tool for estimating tax liability under both the New Regime (default u/s 115BAC) and the Old Regime. With the Union Budget 2024 updates, choosing the right regime has become critical for maximizing your take-home salary.

🆕 New Regime (Default)

Offers significantly lower tax rates and a higher exemption limit (No tax up to ₹7 Lakhs). However, you cannot claim most deductions like 80C, HRA, or Health Insurance. Best for those who want simplicity and higher in-hand salary without locking money in investments.

📋 Old Regime

Retains higher tax rates but allows you to claim over 70 exemptions and deductions (House Rent Allowance, Home Loan Interest, Section 80C, etc.). Ideal for individuals with high expenses like rent and home loans.

The Formula

Tax = Σ(Income in Slab × Slab Rate) + 4% Cess

Detailed Tax Slabs: FY 2024-25 (AY 2025-26)

Income Slab New Regime Rates Old Regime Rates
Up to ₹3,00,000 Nil Nil (upto ₹2.5L)
₹3L - ₹7L 5% 5% (₹2.5L - ₹5L)
₹7L - ₹10L 10% 20% (₹5L - ₹10L)
₹10L - ₹12L 15% 30% (Above ₹10L)
₹12L - ₹15L 20% 30%
Above ₹15L 30% 30%

Top Strategies to Save Tax (Old Regime Only)

While the New Regime offers simplicity, the Old Regime allows specific financial planning to reduce tax liability. Here are the top tools:

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Section 24(b): Home Loan Interest

You can claim a deduction of up to ₹2 Lakhs per year on the interest paid towards your home loan. This is one of the biggest tax savers for salaried employees.

💊

Section 80D: Health Insurance

Claim up to ₹25,000 for yourself/family and an additional ₹50,000 for senior citizen parents. Total potential deduction: ₹75,000.

💰

Section 80C: The Big Umbrella

The most common section with a limit of ₹1.5 Lakhs. Includes EPF (Employee Provident Fund), PPF, ELSS Mutual Funds, Life Insurance Premiums, and Children's Tuition Fees.

📈

NPS (National Pension System)

Under Section 80CCD(1B), you can claim an additional ₹50,000 over and above the ₹1.5 Lakh 80C limit by investing in NPS Tier-1 accounts.

Frequently Asked Questions (FAQ)

Frequently Asked Questions

Which regime is better for me?

Rule of Thumb: If your total deductions (HRA + 80C + 80D + Home Loan) are more than ₹3.75 Lakhs, the Old Regime usually saves you more tax. If you have no loans and pay low rent, stick to the New Regime.

What is the tax rebate under Section 87A?

Under the New Regime, if your net taxable income is up to ₹7 Lakhs, you get a full rebate up to ₹25,000, meaning you pay Zero Tax. Note: If your income exceeds ₹7 Lakhs by even ₹100, you pay tax on the entire amount above ₹3 Lakhs!

Can I switch between regimes every year?

Salaried individuals can choose their preferred regime every year when filing returns. Business owners/Freelancers (Income from Business/Profession) can only switch back to the Old Regime once in their lifetime.