Understanding the Income Tax Calculator (FY 2024-25 & AY 2025-26)
The Union Budget 2024 (Finance (No. 2) Act, 2024) introduced key revisions to the default New Tax Regime under Section 115BAC of the Income-tax Act, 1961. This online calculator lets salaried professionals, self-employed consultants, and business owners instantaneously evaluate and compare their net tax liability under both the New Tax Regime and the traditional Old Tax Regime.
Key Budget 2024 Amendments to the New Tax Regime
- Standard Deduction Hiked to ₹75,000: For salaried employees and pensioners opting for the New Tax Regime, standard deduction under Section 16(ia) has been increased from ₹50,000 to ₹75,000.
- Revised Tax Slabs: The 20% slab now begins from ₹12 Lakhs (previously ₹15 Lakhs under older rules had 30%).
- Rebate under Section 87A: Full tax rebate remains applicable for resident individuals having taxable income up to ₹7,00,000 in the New Regime (effective zero tax on income up to ₹7,75,000 for salaried employees after standard deduction).
Revised Income Tax Slabs for FY 2024-25 (AY 2025-26)
| Income Range (New Regime) | Tax Rate | Income Range (Old Regime) | Tax Rate |
|---|---|---|---|
| Up to ₹3,00,000 | NIL | Up to ₹2,50,000 | NIL |
| ₹3,00,001 to ₹7,00,000 | 5% | ₹2,50,001 to ₹5,00,000 | 5% |
| ₹7,00,001 to ₹10,00,000 | 10% | ₹5,00,001 to ₹10,00,000 | 20% |
| ₹10,00,001 to ₹12,00,000 | 15% | Above ₹10,00,000 | 30% |
| ₹12,00,001 to ₹15,00,000 | 20% | — | — |
| Above ₹15,00,000 | 30% | — | — |
Health and Education Cess & Surcharge
In both regimes, a mandatory 4% Health and Education Cess is levied on the aggregate of income tax and applicable surcharge. Surcharge applies on high-net-worth individuals earning above ₹50 Lakhs, with maximum surcharge capped at 25% under the New Regime.
Frequently Asked Questions (FAQ)
1. Which regime is better for salaried individuals?
If your total deductions (Section 80C, 80D, HRA, Home loan interest under 24(b)) are below ₹3.75 Lakhs – ₹4 Lakhs, the New Tax Regime is mathematically more beneficial due to lower slab rates and the ₹75,000 standard deduction.
2. Can I switch between regimes every year?
Salaried individuals having only salary income can choose between the Old and New Regime every assessment year at the time of filing ITR under Section 139(1). However, individuals having income from business or profession can opt out of the New Regime only once in their lifetime using Form 10-IEA.