In this blog, you will get to know how the Income Tax Calculator helps calculate taxes effortlessly, accurately, and quickly.

What is Income Tax Calculator?
An Income Tax Calculator is an easy-to-use online tool that helps you calculate your tax liability based on your taxable income.
By using the income tax calculator, you can efficiently organize and prepare your financial statement for the current financial year, while also taking steps to maximize your tax savings. The online availability of the tool makes it easily accessible and convenient, helping you estimate your net taxable income after accounting for various investments and expenses.
Let’s explore how to calculate income tax online using the available tax calculator.
How to Use the Income Tax Calculator for FY 2024-25 & FY 2025-26
Step 1:
Choose the financial year for which you want to calculate your taxes.
Step 2:
Select your age group, as tax liability under the old regime varies based on age.
Step 3:
Click on ‘Continue’ to move to the next step.
Step 4:
Enter your salary details before deductions like HRA. If applicable, subtract LTA and other exempt allowances to get the net salary.
Step 5:
Include additional income such as interest income, rental income, and home loan interest (for rented or self-occupied properties).
Step 6:
For income from digital assets, enter the net income (sale price minus acquisition cost).
Step 7:
Click ‘Continue’ to proceed.
Step 8:
Enter your tax-saving investments under sections 80C, 80D, 80G, and others, if applicable.
Step 9:
Click ‘Calculate’ to view your tax liability and compare the old and new tax regimes.
This step-by-step process helps you easily estimate your taxes and decide the most beneficial tax regime.
Tax Calculation for Salaried Individuals
Income from salary includes basic salary, HRA (House Rent Allowance), special allowance, transport allowance, and any other allowances. Certain components of your salary, such as telephone bill reimbursement and leave travel allowance (LTA), are exempt from tax. Additionally, if you receive HRA and live in a rented property, you can claim an exemption on the HRA amount. You can calculate the exempt portion of HRA using the HRA Calculator. Apart from these exemptions, both the old and new tax regimes offer a standard deduction of ₹50,000 and ₹75,000 respectively, further reducing your taxable income.
Let’s understand income tax calculation under both the old and new tax regimes using an example:
Raj receives a Basic Salary of ₹1,00,000 per month, HRA of ₹50,000, Special Allowance of ₹21,000 per month, and LTA of ₹20,000 annually. Raj pays a rent of ₹40,000 and lives in Mumbai.
Nature | Amount | Exemption/Deduction | Taxable Income (Old Regime) | Taxable Income (New Regime) |
---|---|---|---|---|
Basic Salary | ₹12,00,000 | – | ₹12,00,000 | ₹12,00,000 |
HRA | ₹6,00,000 | ₹3,60,000 | ₹2,40,000 | ₹6,00,000 |
Special Allowance | ₹2,52,000 | – | ₹2,52,000 | ₹2,52,000 |
LTA | ₹20,000 | ₹12,000 (bills submitted) | ₹8,000 | ₹20,000 |
Standard Deduction | – | ₹50,000 | ₹50,000 | ₹75,000 |
Gross Total Income from Salary | ₹16,50,000 | ₹19,97,000 |
Tax Calculation for Raj (Old and New Regime)
Income and Deductions Under the Old Tax Regime:
Nature | Amount |
---|---|
Income from Salary | ₹16,50,000 |
Less: Standard Deduction | ₹50,000 |
Income from Other Sources | ₹20,000 |
Gross Total Income | ₹16,70,000 |
Deductions: | |
Section 80C (Maximum ₹1,50,000) | ₹1,50,000 |
Section 80D | ₹12,000 |
Section 80TTA | ₹8,000 |
Total Deductions | ₹1,70,000 |
Gross Taxable Income | ₹15,00,000 |
Total Tax on Above (Including Cess) | ₹2,73,000 |
Income and Deductions Under the New Tax Regime:
Nature | Amount |
---|---|
Income from Salary | ₹19,97,000 |
Less: Standard Deduction | ₹75,000 |
Income from Other Sources | ₹20,000 |
Gross Total Income | ₹19,42,000 |
Total Tax on Above (Including Cess) | ₹2,83,504 |
Slab Rates Under the New and Old Tax Regimes
Old Tax Regime Slabs:
Category | Up to ₹2,50,000 | ₹2,50,001 to ₹3,00,000 | ₹3,00,001 to ₹5,00,000 | ₹5,00,001 to ₹10,00,000 | Above ₹10,00,000 |
---|---|---|---|---|---|
Individuals (Age < 60 years) | Nil | 5% | 5% | 20% | 30% |
Resident Senior Citizens (Age ≥ 60 but < 80 years) | Nil | Nil | 5% | 20% | 30% |
Resident Super Senior Citizens (Age ≥ 80 years) | Nil | Nil | Nil | 20% | 30% |
New Tax Regime Slabs (for all age groups):
Income Slab | Tax Rate |
---|---|
Up to ₹3,00,000 | Nil |
₹3,00,001 to ₹7,00,000 | 5% |
₹7,00,001 to ₹10,00,000 | 10% |
₹10,00,001 to ₹12,00,000 | 15% |
₹12,00,001 to ₹15,00,000 | 20% |
Above ₹15,00,000 | 30% |
Surcharge and Education Cess:
Income Range | Surcharge Rate |
---|---|
> ₹50 lakh and < ₹1 crore | 10% |
> ₹1 crore and < ₹2 crore | 15% |
> ₹2 crore and < ₹5 crore | 25% |
> ₹5 crore | 37% |
Note: The surcharge rate of 37% has been reduced to 25% under the new tax regime.
Health and Education Cess: An additional 4% is levied on the income tax liability.
Benefits of Using Income Tax Calculator
Accuracy
The calculator ensures precise tax calculations, eliminating the possibility of errors that might occur with manual calculations.
Swift and Hassle-free
The tool quickly calculates your tax liability in just a few seconds, offering convenience anytime, anywhere.
User-friendly
With a simple interface, all you need to do is enter your income and deduction details to get an accurate calculation.
Better Financial Management and Tax Planning
Knowing your tax liability in advance allows for better financial planning. By understanding your potential tax obligations, you can plan your investments in tax-saving instruments like ELSS and PPF to reduce your tax burden effectively.
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