🇮🇳 India · Income Tax · FY 2025-26
Income Tax Calculator India FY 2025-26: New vs Old Regime
May 13, 202610 min readBy CalVerse
Under the New Tax Regime in FY 2025-26, a salaried employee earning up to ₹12.75 lakhs pays zero tax — thanks to the ₹75,000 standard deduction plus Section 87A rebate up to ₹12L. But the Old Regime still wins for anyone claiming HRA + 80C + 80D deductions above ₹3.75 lakhs. This article gives you the exact tax for every salary level under both regimes — so you pick the right one.
FY 2025-26 Tax Slabs — New Regime vs Old Regime
New Tax Regime — FY 2025-26
Up to ₹3,00,000NIL
₹3L – ₹7L5%
₹7L – ₹10L10%
₹10L – ₹12L15%
₹12L – ₹15L20%
Above ₹15L30%
87A RebateUp to ₹12L
Standard Deduction₹75,000
Old Tax Regime — FY 2025-26
Up to ₹2,50,000NIL
₹2.5L – ₹5L5%
₹5L – ₹10L20%
Above ₹10L30%
87A RebateUp to ₹5L
Standard Deduction₹75,000
🎯 The Big Change in FY 2025-26
Budget 2025 made the New Regime significantly more attractive. The 87A rebate was extended to income up to ₹12 lakhs (from ₹7L earlier). This means a salaried employee with gross income of ₹12.75 lakhs (after ₹75K standard deduction = ₹12L taxable) pays ZERO tax under New Regime. This is a massive shift — previously this person would have paid ₹80,000+ in tax.
Exact Tax Comparison — New vs Old Regime by Salary
Assuming standard salary structure for Old Regime: ₹1.5L 80C + ₹25K 80D + HRA exemption ₹1L + Standard Deduction ₹75K. Total deductions = ₹3.5L:
| Annual CTC | New Regime Tax | Old Regime Tax | Better Option | Saving |
|---|
| ₹7 Lakhs | ₹0 (rebate) | ₹0 (rebate) | Same | — |
| ₹10 Lakhs | ₹54,600 | ₹28,600 | Old Regime | Save ₹26,000 |
| ₹12 Lakhs | ₹0 (rebate) | ₹72,800 | New Regime | Save ₹72,800 |
| ₹12.75 Lakhs | ₹0 | ₹83,200 | New Regime | Save ₹83,200 |
| ₹15 Lakhs | ₹1,30,000 | ₹1,12,320 | Old Regime | Save ₹17,680 |
| ₹20 Lakhs | ₹2,10,000 | ₹2,34,000 | New Regime | Save ₹24,000 |
| ₹25 Lakhs | ₹3,37,500 | ₹3,82,200 | New Regime | Save ₹44,700 |
| ₹30 Lakhs | ₹4,87,500 | ₹5,46,000 | New Regime | Save ₹58,500 |
⚠️ The Crossover Zone — ₹12L to ₹15L
Between ₹12L and ₹15L salary there's a complex crossover. At exactly ₹12L New Regime is zero tax. At ₹13L New Regime is ₹20,000, Old Regime might still be lower with maximum deductions. At ₹15L Old Regime wins back. This salary band needs a precise calculation — not a rule of thumb. Use the calculator to get your exact number.
Calculate your exact income tax
Enter your salary, HRA, 80C investments and other deductions — see New vs Old regime tax comparison instantly.
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Old Regime Deductions — What You Can Claim
Old Regime allows these deductions that New Regime does NOT:
| Deduction | Section | Max Limit | What Qualifies |
|---|
| Standard Deduction | 16(ia) | ₹75,000 | Available in BOTH regimes |
| PPF / ELSS / LIC / Home Loan Principal | 80C | ₹1,50,000 | Old Regime only |
| Health Insurance | 80D | ₹25,000–₹1L | Old Regime only |
| HRA Exemption | 10(13A) | Calculated | Old Regime only |
| Home Loan Interest | 24(b) | ₹2,00,000 | Old Regime only |
| NPS Extra Deduction | 80CCD(1B) | ₹50,000 | Old Regime only |
| Employer NPS Contribution | 80CCD(2) | 10–14% of Basic | Available in BOTH regimes |
The Decision Rule — Which Regime to Choose
Add up all your Old Regime deductions:
- Standard Deduction: ₹75,000 (available in both — don't count this as a differentiator)
- 80C investments: up to ₹1,50,000
- 80D health insurance: up to ₹25,000–₹50,000
- HRA exemption: depends on rent and city
- Home loan interest: up to ₹2,00,000
- NPS 80CCD(1B): up to ₹50,000
✓ The Simple Rule
If your total Old Regime deductions (excluding standard deduction) exceed ₹3.75 lakhs — Old Regime wins at most salary levels below ₹20L. If your deductions are below ₹2L — New Regime almost always wins. The ₹3.75L threshold is where the two regimes are roughly equal. Calculate your exact deductions and use the CalVerse tax calculator to see the precise difference for your salary.
New Regime — What's Still Available
Even in New Regime, these benefits survive:
- Standard Deduction ₹75,000 — available in both regimes
- Employer NPS contribution under 80CCD(2) — up to 14% of basic for govt employees
- HRA if employer provides it as part of salary structure — partially available
- Leave Travel Allowance (LTA) — not available
- Section 87A rebate up to ₹12L taxable income — zero tax
- Basic exemption limit ₹3L (vs ₹2.5L in Old Regime)
Income Tax India — Frequently Asked Questions
Is income up to ₹12 lakhs really tax-free in FY 2025-26?
Yes — for salaried employees under the New Regime. The standard deduction of ₹75,000 reduces gross income of ₹12.75L to ₹12L taxable. The Section 87A rebate covers the full tax liability on income up to ₹12L under New Regime. So effective tax = zero. For non-salaried individuals, the threshold is ₹12L (no standard deduction). This is one of the most significant tax changes in recent years and makes New Regime extremely attractive for most salaried employees below ₹12.75L.
Can I switch between New and Old Regime every year?
Salaried employees with no business income can switch between New and Old Regime every financial year. You declare your choice at the start of the year to your employer for TDS purposes. If you don't declare, New Regime is the default from FY 2023-24. Business owners and self-employed individuals can only switch once from Old to New Regime — after switching they cannot go back. Always evaluate both regimes at the start of each financial year.
What is the surcharge on high income in India?
Surcharge applies on top of income tax for high earners: 10% surcharge if income is ₹50L–₹1Cr, 15% if ₹1Cr–₹2Cr, 25% if ₹2Cr–₹5Cr, 37% if above ₹5Cr (Old Regime). Under New Regime, surcharge above ₹5Cr is capped at 25% — making New Regime significantly better for ultra-high earners. Plus 4% Health and Education Cess applies on tax plus surcharge for all taxpayers.
How is tax calculated on salary with HRA and home loan?
Under Old Regime: Start with gross salary, subtract HRA exemption (minimum of HRA received, rent paid minus 10% of basic, or 50%/40% of basic for metro/non-metro), subtract standard deduction ₹75K, subtract 80C up to ₹1.5L, subtract home loan interest up to ₹2L under Section 24(b), subtract 80D premium. Apply tax slabs on remaining taxable income. This multi-step calculation is exactly why most people underestimate their tax refund — they don't claim all eligible deductions.
What is the last date to file ITR for FY 2025-26?
The due date for filing Income Tax Return for FY 2025-26 (Assessment Year 2026-27) is July 31, 2026 for individuals and HUFs not requiring audit. Belated return can be filed until December 31, 2026 with a late fee of ₹5,000 (₹1,000 if income is below ₹5L). Always file on time — even if you have no tax liability — to maintain a clean tax record, which helps with visa applications, loan approvals and financial credibility.