What is an Income Tax Calculator?

How can the Income tax calculator be used for FY 2025-26 (AY 2026-27)?

The steps to utilize the tax calculator are as follows:

1. Select the financial year that which you would like your taxes to be computed for.

2. Choose your age appropriately. In India, tax obligations vary according to age groupings.

3. Mention your income and deduction details.

4. Click on ‘Calculate' and you’ll receive both the values from Old tax regime and new tax regime.

Note: You can enter "0" whichever field is not applicable.

Example for Calculating Income Tax

For Salaried Employees

The total of the salary is your income from salary: basic pay + HRA + special allowance + transport allowance + any other allowances.

Certain parts of your pay, such as the reimbursement of phone bills and the leave travel allowance, are not subject to taxes. You may be eligible for an HRA exemption if you live on rent and get HRA.

In addition to these exemptions, both the old and new regimes provide for a standard deduction of ₹ 50,000. In the most recent budget for 2025, this was raised to ₹ 75,000 exclusively for the New Regime.

For more information on new vs old regime selection, feel free to view the video.

You will not be eligible for these exemptions if you use the new tax system. Using an example, let's examine how income tax is calculated under the present tax slabs and the new tax slabs (optional).

An employee named Sujata gets a monthly Basic Salary of ₹ 1,00,000, an HRA of fifty thousand rupees, a monthly Special Allowance of ₹ 21,000, and an LTA of ₹ 20,000 per year. Sujata resides in Delhi and pays a rent of ₹ 40,000.

Which deductions and exemptions are prohibited under the new tax law?

Individuals or HUFs opting for taxation under the newly introduced Section 115BAC of the Income Tax Act will not be eligible for the following exemptions and deductions:

1. Leave Travel Allowance (LTA) as specified in Section 10(5)

2. House Rent Allowance (HRA), as specified in Section 10(13A)

3. Certain special allowances under Section 10(14), except those specifically permitted

4. Allowances for MPs and MLAs as per Section 10(17)

5. Exemption for minor’s income under Section 10(32)

6. Deduction under Section 10AA for SEZ units

7. Deductions under Section 16, such as entertainment allowance and professional tax

8. Interest on home loan under Section 24(b) for self-occupied or vacant property (as referred in Section 23(2))

   • (Note: Loss under “Income from House Property” for rented property can still be carried forward but not set off against other heads of income)

9. Additional depreciation under Section 32(1)(iia)

10. Deductions under Sections 33AB, 33ABA, 32AD, and 33AC

11. Different deductions for donations or costs associated with scientific research are included in subclauses (ii), (iia), (iii), and (iv) of subsection (1) or subclause (2AA) of section 35;

12. Deductions for scientific research under various clauses of Section 35, including sub-clauses (ii), (iia), (iii), (iv) of sub-section (1) and sub-clause (2AA)

13. Family pension deduction under Section 57(iia)

14. Deductions under Section 35AD or 35CCC

15. Any deductions under Chapter VI-A, including (but not limited to):

    • Section 80C (Investments),

    • 80CCC, 80CCD(1),

    • 80D (Health Insurance),

    • 80DD, 80DDB,

    • 80E, 80EE, 80EEA, 80EEB,

    • 80G, 80GG, 80GGA, 80GGC,

    • 80IA, 80-IAB, 80-IAC, 80-IB, 80-IBA, etc.

Exceptions: The following deductions will still be allowed:

Section 80CCD(2): Employer’s contribution to the National Pension Scheme (NPS)

Section 80JJAA: Deduction for new employment generation

Allowances Permitted Under the New Tax Regime (as Notified Under Section 10(14))

The following allowances are allowed even under the new regime for individuals or HUFs opting under Section 115BAC:

• Transport allowance granted to a divyang (disabled) employee for commuting between home and workplace

• Conveyance allowance for expenses incurred while performing official duties

• Reimbursement of travel expenses incurred during official tours or transfers

• Daily allowance to meet daily expenses while away from the usual place of duty

HR HUB’s Tax Calculator makes income tax estimation effortless and accurate. Fully updated as per the Union Budget 2025–26, whether you're a salaried professional or self-employed, HR HUB’s Tax Calculator ensures smarter tax planning by showing side-by-side comparisons of both regimes—helping you make informed decisions at a glance.