Income Tax Calculator

Calculating your income tax liability manually can be complex and time-consuming. Therefore, using an online income tax calculator can help simplify the calculation. An income tax calculator is an online tool that estimates your tax liability based on your income, applicable tax slabs, and deductions. 

Learn how to use the new regime income tax calculator, its benefits and how it can simplify your tax planning.

What is an Income Tax Calculator?

An Income-tax calculator is an online tool that helps evaluate taxes based on a person’s income, respective tax slab and tax liability. Individuals falling under the taxable income bracket are liable to pay a specific portion of their net annual income as tax. One can choose between the old and new tax regimes, each having different tax rates and deductions. 

Income tax can be paid as tax deducted at source (TDS) during the monthly salary disbursement or through the income tax returns portal managed by the Central Board of Direct Taxes (CBDT). The provision for online payment of taxes ensures that individuals pay their stipulated dues based on any earnings generated from other sources.

The Income Tax calculator on this page is aligned with the updates announced in the Union Budget for FY 2025-26 and AY 2026-27.

Budget 2025 Updates on Income Tax 

The Union Budget 2025 introduced several significant changes in the income tax regime. Here are the key highlights - 

• The income tax rebate was hiked to ₹60,000 from the previous rebate limit of ₹25,000. Meaning, no tax liability on income up to ₹12 lakh under the new tax regime.
• The TDS limit on rent has been increased to ₹50,000 per month for FY 2025-26.
• The limit on tax deduction on interest for senior citizens has been increased from ₹50,000 to ₹1,00,000.
• In the case of Tax Collected at Source (TCS) on remittances under the Reserve Bank of India’s (RBI) Liberalized Remittance Scheme, the threshold has been increased to ₹10 Lakhs from the earlier limit of ₹7 Lakhs. Furthermore, TCS has been removed for education loans acquired to specified financial institutions.

Revised Income Tax Slabs Under New Regime for FY 2025-2026 (AY 2026-2027)

How to Use Groww’s Online Income Tax Calculator?

Follow the below-given steps to use the Groww’s Income Tax Calculator:

1. Choose the assessment year for which you want to calculate the tax. For example, if you are looking for FY 2025-26, then select the AY as 2026-27 from the drop-down menu.
2. In the next field, select your age. 
3. Next, click on the ‘income field’. Provide the following details:
1. Gross salary (monthly or yearly salary paid without any deductions)
2. Annual income from other sources, such as rental income and annual interest paid on home loans for the self-occupied and let-out property.
3. Annual income from interest.
4. Next, enter the details of various deductions - 
1. Basic deductions u/s under Section 87A, 80C, 80CCD (1B), 80D, 80G, 80E, 80TTA, 80TTB, 80GG. 
2. Interest on Educational Loan u/s 80E.
3. Interest on deposits in savings account u/s 80TTA/TTB.
5. In the next step, provide the details of the HRA exemption, such as the basic salary, DA, HRA, and total rent paid per annum.
6. Finally, select whether you live in a metro city and hit the calculate button to obtain your tax liability.

Whether you're under the old or new regime, an income tax calculator can help you calculate your tax liability for both with just a few clicks.

How to Calculate Income Tax on Salary?

Here’s a simplified overview of calculating your income tax on salary:

1. Calculate your gross salary, which includes basic salary, allowance, bonus and other taxable components.
2. Identify and subtract the exemptions from your gross salary. Common components that are exempted from income tax include - House Rent Allowance (HRA), Leave Travel Allowance (LTA) and Standard Deduction. Please note that these exemptions are only available under the Old Tax Regime.
3. Calculate your claim deductions under different sections of the Income Tax Act. For example - Section 80C (for Provident Fund, PPF or life insurance), Section 80D (for health insurance premiums) and Section 24b (for home loan interest). All these deductions are applicable under the Old Tax Regime.
4. Determine your taxable income by subtracting these deductions and exemptions from your gross salary.

• Know Your Income Tax Slab and Tax Rate by calculating the applicable tax rate for each slab based on your taxable income. 

1. Now, calculate and add the tax liability for each slab to determine your total income tax liability.
2. Consider if there is any rebate and surcharge under Section 87A, if applicable, based on your circumstances. 
3. Add the health and education cess, currently 4%, to your total tax liability.

Considering these factors, you can finally determine your total tax liability for a particular financial year. Please note that most deductions/exemptions mentioned above are applicable only in the Old Tax Regime.

For taxation under the New Tax Regime, let us consider an example where the salary income of an individual is ₹18,00,000 per annum. Here’s how the income tax on the salary income is calculated - 

Applicable Tax Rate as per the New Regime

Here’s how the taxable income will be taxed as per the new regime -

Benefits of Income Tax Calculator

Using an online income tax calculator offers you numerous benefits, which are as follows:

Accuracy

An online income tax calculator ensures accurate tax calculation, reducing the errors that come with the traditional method of calculating taxes manually.

Speed and Convenience

Calculate your taxes anytime, anywhere. An online calculator eliminates the need to set aside a specific time and place for calculations, making the process quick and convenient compared to conventional methods.

Easy to Use

It is a user-friendly tool that is free to use. You simply enter your financial and personal details to get an accurate estimate of your tax obligations.

Improves Management of Expenses 

You have the opportunity to estimate your tax liability well in advance. This can help you allocate your funds efficiently. 

Plan Your Finances in a Better Way

By learning about your tax liability beforehand, plan your finances better and invest in tax-saving instruments like mutual funds, fixed deposits, loans, ELSS, and PPF.

Data Privacy

Calculating your income tax on paper can expose your financial data to potential fraudsters. Online tax calculators ensure your financial information remains confidential, protecting it from unauthorised access.

Using an income tax calculator or new tax regime calculator simplifies your tax planning and helps you manage your finances more efficiently. This tool provides accuracy, convenience and valuable insights, making it an essential part of your financial toolkit.

Start using the income tax calculator today to understand your tax obligations better and optimise your tax savings!