Income Tax Calculator for FY 2025-26 (Assessment Year 2026-27)

In this detailed guide, we will discuss the new and old tax regimes for FY 2025-26 (Assessment Year 2026-27) and provide you with an income tax calculator in Excel format. This article will help you determine which tax regime is the most beneficial based on your income and financial situation.

Overview of Income Tax Slabs for FY 2025-26 (Assessment Year 2026-27)

The Finance Act 2025 introduced changes to the income tax structure. The tax slabs under both the New Regime and Old Regime have been updated. Understanding these changes is crucial for effective tax planning. Here, we will go over the tax slabs, deductions, exemptions, and the advantages and disadvantages of each regime.

1. New Regime Tax Slabs for FY 2025-26

The new regime offers lower tax rates, especially for middle-income earners. Under the new tax regime, no exemptions or deductions are allowed, but it provides a simpler way to calculate your tax.

Income Range (₹)	Tax Rate
Up to ₹4,00,000	No Tax
₹4,00,001 to ₹8,00,000	5%
₹8,00,001 to ₹12,00,000	10%
₹12,00,001 to ₹16,00,000	15%
₹16,00,001 to ₹20,00,000	20%
₹20,00,001 to ₹24,00,000	25%
Above ₹24,00,000	30%

**Standard Deduction**: ₹75,000. The standard deduction effectively increases the tax-free income threshold to ₹12,75,000. This means individuals with income up to ₹12,75,000 do not need to pay any tax under the new regime.

2. Old Regime Tax Slabs for FY 2025-26

Under the old tax regime, taxpayers can avail themselves of exemptions and deductions such as Section 80C, Section 80D, and others. The tax slabs for this regime are more traditional, and individuals can plan their taxes by investing in various saving schemes.

Income Range (₹)	Tax Rate
Up to ₹2,50,000	No Tax
₹2,50,001 to ₹5,00,000	5%
₹5,00,001 to ₹10,00,000	20%
Above ₹10,00,000	30%

**Exemptions & Deductions**: Under this regime, you can avail of tax exemptions (HRA, LTA) and deductions (under 80C, 80D, etc.). These exemptions and deductions can help reduce your taxable income, but it requires more planning and documentation.

3. Key Features and Differences Between the New and Old Tax Regimes

Let's compare the **New Regime** and the **Old Regime** side by side to help you understand which option might be better for you.

• Tax Rates: The New Regime offers lower tax rates for most income brackets. The Old Regime offers tax rates as high as 30% for income above ₹10,00,000.
• Exemptions and Deductions: The Old Regime allows you to claim various deductions and exemptions, such as deductions under Section 80C, 80D, and others. The New Regime does not allow these deductions, but it has simpler tax calculations.
• Standard Deduction: The New Regime offers a standard deduction of ₹75,000, which makes it easier for individuals to calculate tax, especially for those with simpler financial situations.
• Tax-Free Income Threshold: The effective tax-free income under the New Regime is ₹12,75,000 due to the standard deduction. In the Old Regime, the threshold is ₹2,50,000, with additional deductions reducing taxable income further.

4. Example Tax Calculation for Both Regimes

Let’s calculate the tax for an individual with an annual taxable income of ₹14,00,000 under both tax regimes. This will help you see the difference in tax liability and make an informed decision about which regime is better for you.

Under the New Regime:

Income: ₹14,00,000
Standard Deduction: ₹75,000
Taxable Income: ₹13,25,000

Applying the tax slabs:

• ₹4,00,000 at 5% = ₹20,000
• ₹4,00,000 at 10% = ₹40,000
• ₹4,00,000 at 15% = ₹60,000
• ₹1,25,000 at 20% = ₹25,000

Total Tax: ₹1,45,000

Under the Old Regime:

Income: ₹14,00,000
Deduction under Section 80C: ₹1,50,000
Taxable Income: ₹12,50,000

Applying the tax slabs:

• ₹2,50,000 at 5% = ₹12,500
• ₹5,00,000 at 20% = ₹1,00,000
• ₹5,00,000 at 30% = ₹1,50,000

Total Tax: ₹2,62,500

Tax Saving Comparison:

Tax Saving: ₹2,62,500 (Old Regime) – ₹1,45,000 (New Regime) = ₹1,17,500

This example shows that the New Regime is more beneficial for individuals with lower deductions and exemptions.

5. Download the Updated Income Tax Calculator

To make tax planning even easier, we’ve created an updated Excel-based Income Tax Calculator for FY 2025-26. This tool includes both the New Regime and Old Regime tax slabs and allows you to calculate your tax liability based on your income and chosen regime.

Download Income Tax Calculator for FY 2025-26 (Excel Format):

Click Here to Download Excel Calculator

6. Conclusion and Best Tax Regime

Choosing between the New Regime and the Old Regime depends largely on your income structure. If you have significant deductions and exemptions (such as HRA, 80C, 80D), the Old Regime might be more beneficial for you. However, if you have a simpler financial situation with fewer exemptions, the New Regime