Free Income Tax Calculator Online
What is Income Tax Calculator?
An income tax calculator is an online tool that helps individuals estimate the amount of income tax they need to pay for a specific financial year. It generates an approximate tax liability by factoring in various elements such as total income, eligible deductions, House Rent Allowance (HRA) exemptions, and other applicable components.
Use our free income tax calculator to quickly estimate your tax liability under both old and new regimes for FY 2025–26. Understand your deductions, exemptions, and total tax due instantly helping you make smarter financial decisions.
Note: Updated as per latest budget on 01st Feb, 2025.
How to use the BankBazaar Income Tax Calculator Online for FY 2025–26?
To calculate your income tax quickly and accurately, simply use BankBazaar’s free online income tax calculator by following the easy steps below:
Step 1: Select the financial year for which you want to calculate your income tax.
Step 2: Choose your gender from the available options.
Step 3: Enter your income details - this includes salary, income from other sources, interest income, rental income, and any home loan interest paid.
Step 4: Provide details of deductions under sections like 80C, 80D, 80E, 80TTA/80TTB, 80G, and 80CCD, if applicable.
Step 5: Enter your HRA exemption details.
Step 6: Indicate whether you reside in a metro city by selecting Yes or No.
Step 7: Click the “Calculate” button to view your estimated tax liability under both the old and new tax regimes.
Income Tax Slabs under New Tax Regime for FY 2025-26
Under the Union Budget 2025, the Finance Minister announced new income tax slabs and rates as given below:
Income Tax Slab | Income Tax Rate |
Rs.0 to Rs. 4,00,000 | Nil |
Rs. 4,00,001 to Rs. 8,00,000 | 5% |
Rs. 8,00,001 to Rs. 12,00,000 | 10% |
Rs. 12,00,001 to Rs. 16,00,000 | 15% |
Rs. 16,00,001 to Rs. 20,00,000 | 20% |
Rs. 20,00,001 to Rs. 24,00,000 | 25% |
Above Rs. 24,00,000 | 30% |
Components for Calculating Income Tax
The following are the key components for calculating Income Tax:
Component | Description | Example |
Financial Year (FY) | The year in which you earn your income. It starts on 1st April and ends on 31st March of the following year. | FY 2024-25: 1 April 2024 – 31 March 2025 |
Assessment Year (AY) | The year after the Financial Year, when the income is assessed and taxed. | AY 2025-26: Income earned in FY 2024-25 |
Previous Year | Another term for Financial Year — it is the year immediately before the Assessment Year in which income is earned. | For AY 2025-26, the previous year is FY 2024-25 |
Tax Deductions | Reductions allowed under Section 80 (Chapter VI-A) of the Income Tax Act. These lower your taxable income. | Up to ₹1.5 lakh deduction for LIC premiums |
Tax Exemptions | Income types that are completely or partially exempt from tax and not included in taxable income. | Agricultural income is tax-exempt |
- Interested to know more on Financial Year (FY) vs Assessment Year (AY).
Income Tax Exemptions and Rebates
Understanding the various income tax exemptions and rebates can significantly reduce your tax burden. Below are some of the most commonly used sections under the Income Tax Act that offer relief to taxpayers:
Section | Details |
Section 87A | Provides a rebate of up to ₹12,500 for individual taxpayers with taxable income up to ₹5 lakh. |
Section 80C | Allows deductions up to ₹1.5 lakh on investments in LIC, PPF, ELSS, tuition fees, home loan principal, etc. |
Section 80CCD (1B) | Offers an additional deduction of ₹50,000 on contributions to the National Pension Scheme (NPS). |
Section 80D | Deduction for health insurance premiums paid for self, family, and parents (up to ₹1 lakh in some cases). |
Section 80E | Interest on education loans for higher studies is fully deductible for up to 8 years. |
Section 80G | Donations to eligible charitable institutions and relief funds qualify for deduction. |
Section 80GG | Deduction for house rent paid by those not receiving HRA, subject to specified limits. |
Section 80TTA / 80TTB | Deduction on interest income from savings accounts (up to ₹10,000 under 80TTA for non-senior citizens, ₹50,000 under 80TTB for senior citizens). |
Calculation of Total Income Tax Liability
The total tax that must be paid can be calculated with the help of the income tax calculator. The below-mentioned details must be provided to calculate the tax:
- Transport allowance
- Any tax exemptions
- Income from rental income, investments, etc.
- Income from profits/salary
It is important that the exact details are entered so that the right tax amount is paid. Once the TDS has been reduced, the remaining amount can be paid online. In case the TDS that has been paid is higher than the tax that must be paid, refund will be provided by the government.
A penalty will be levied in case the tax returns are filed after the due date. Therefore, it is vital that the returns are filed before the last date.
FAQs on Income Tax Calculator
- What is the purpose of the Income Tax Calculator?
An income tax calculator helps individuals estimate their tax liability quickly and accurately under both the old and new tax regimes, based on the latest tax rules.
- How do I use the Income Tax Calculator effectively?
Enter your income, select a tax regime, input deductions, and click "Calculate." The tool instantly shows your estimated tax based on the current slabs.
- Can freelancers use this calculator?
Yes, freelancers and self-employed professionals can use the calculator by entering their total annual income and eligible deductions. However, ensure that you account for business expenses and professional income properly to get an accurate estimate.
- What are the updated income tax slabs under the new regime (Budget 2025)?
Income up to ₹4 lakh is tax-free. Tax rates increase gradually, reaching 30% for income above ₹24 lakh. A ₹75,000 standard deduction is available to salaried individuals.
- What is the standard deduction announced in Union Budget 2025?
The standard deduction has been increased to ₹75,000 under the new tax regime, effectively raising the tax-free threshold for salaried taxpayers.
- Is income tax calculated monthly or yearly?
In India, income tax is calculated on an annual basis. The financial year runs from April 1 to March 31, as per the Income-tax Act.
- How is tax calculated on my salary?
Salary tax calculation involves computing gross income, applying eligible deductions and exemptions, determining tax liability, and subtracting any tax already paid (e.g., TDS).
- Is everyone liable to pay income tax?
Only individuals whose income exceeds ₹2.5 lakh (old regime) or ₹3 lakh (new regime) are liable to pay income tax. However, even those below the limit may file returns to claim refunds.
- What does "Income Tax" mean?
Income tax is a direct tax levied on an individual’s or business’s annual income. It is calculated and collected under the Income-tax Act, 1961.
- How much tax will be deducted from my salary?
The tax amount depends on your income slab and applicable deductions. You can refer to the latest tax slab table or use the calculator for precise estimates.
- Does my tax responsibility end after payment?
No. After paying tax, you must ensure that TDS/TCS details are correctly reflected in your Form 26AS, and file your income tax return before the due date to complete the process.
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