Income Tax Calculator 2025
Income Tax Calculator 2025 As the ITR filing season for 2025 approaches, taxpayers must decide between the old and new tax regimes to minimize their tax liability. Understanding which regime suits you best can help you save significantly on taxes. Income Tax Calculator 2025 To simplify this decision, the Income Tax Department provides an online Income Tax Calculator that allows you to compare both regimes easily.
In this detailed guide, we will walk you through the step-by-step process of using the Income Tax Calculator and highlight key factors that can influence your choice.
What is the New Tax Regime?
The new tax regime was introduced in the Union Budget 2020 and became the default regime for taxpayers starting from FY 2023-24 under the Finance Act, 2023. Income Tax Calculator 2025 It applies to individuals, Hindu Undivided Families (HUFs), Associations of Persons (AOPs), Bodies of Individuals (BOIs), and Artificial Juridical Persons (AJPs).
If you opt for the new tax regime under Section 115BAC, you must forgo various exemptions and deductions available in the old tax regime. While this regime offers lower tax rates, it limits the scope of tax-saving investments.
Key Differences Between Old and New Tax Regimes
| Aspect | Old Tax Regime | New Tax Regime |
| Standard Deduction | Available (up to ₹50,000) | Available (up to ₹50,000) |
| Section 80C Deductions | Available (up to ₹1.5 lakh) | Not Available |
| Section 80D Deductions | Available (Health Insurance) | Not Available |
| HRA, LTA, and Other Allowances | Available | Not Available |
| Tax Rates | Higher Rates but with Deductions | Lower Rates with Limited Deductions |
Step-by-Step Guide to Using the Income Tax Calculator
The Income Tax Department’s official website offers a simple tool to calculate and compare your tax liability under both regimes. Follow these steps to use it effectively:
Step 1: Visit the Income Tax Portal
- Go to the official Income Tax e-Filing Portal.
- On the homepage, locate the ‘Tax Calculator: Old vs New Regime’ option on the left side of the screen.
Step 2: Select Key Details
- Choose your Taxpayer Type: Individual, HUF, or others.
- Select your Age Category (below 60 years, senior citizen, or super senior citizen).
- Specify your Residential Status (Resident or Non-Resident).
Step 3: Enter Your Income Details
- Add your income from various sources such as:
- Salary Income
- Income from House Property
- Income from Other Sources
Step 4: Declare Deductions and Exemptions
- For the Old Tax Regime, enter deductions like:
- Income Tax Calculator 2025 Section 80C (Investments such as PPF, ELSS, LIC, etc.)
- Section 80D (Medical insurance premium)
- Housing Loan Interest under Section 24
- For the New Tax Regime, minimal deductions are allowed, so only relevant entries are required.
https://www.incometax.gov.in/iec/foportal/
Step 5: Review the Results
- The calculator will display the total tax payable under both regimes.
- Compare the outcomes to identify the regime that offers the lowest tax liability.
Which Tax Regime is Better for You?
Choosing the right regime depends on your financial profile:
✅ Opt for the Old Tax Regime if:
- You claim substantial deductions under Section 80C, Section 80D, and Home Loan Interest.
- Your salary structure includes HRA, LTA, or other allowances.
✅ Opt for the New Tax Regime if:
- You prefer a simplified structure with lower tax rates.
- You have minimal or no investments in tax-saving schemes.
Pro Tip for Maximizing Tax Savings
- For individuals with high deductions, the old regime may offer greater savings.
- For those with fewer exemptions, the new regime’s lower rates could be beneficial.
Example Scenario
Suppose your gross annual income is ₹10 lakh and you claim deductions of ₹2 lakh under Section 80C and ₹50,000 under Section 80D. Income Tax Calculator 2025 In this case, the old regime may result in a lower tax outgo.
On the other hand, if you have no major deductions, the new regime could be more tax-efficient.
Conclusion
Income Tax Calculator 2025 Before filing your ITR for AY 2025-26, ensure you calculate your tax liability under both the old and new tax regimes. Using the Income Tax Calculator can help you make an informed decision and maximize your tax savings.
To explore the calculator and compare your taxes, visit the official Income Tax Portal today.
For More Information : https://taxgyany.com/