Income Tax Calculator India FY 2024-25

Many taxpayers often confuse "Total Income" with "Taxable Salary." When you invest in the stock market, mutual funds, or real estate, the profit you generate is classified as Capital Gains, and it is taxed very differently from your salary. This distinction is critical because Capital Gains often attract "Special Rates" that are independent of your income tax slab.

• Short Term Capital Gains (STCG): If you sell equity shares or equity-oriented mutual funds within 12 months of purchase, the profit is taxed at a flat rate of 20% (increased from 15% in recent budgets). This applies regardless of whether you are in the 5% slab or the 30% slab.
• Long Term Capital Gains (LTCG): If you hold these assets for more than 12 months, the gains are taxed at 12.5%. However, the government offers a relief exemption on the first ₹1.25 Lakhs of LTCG in a financial year. You only pay tax on the amount exceeding this limit.

Most basic income tax calculators fail to separate these components, lumping them with your salary and applying a 30% tax rate, which leads to a massive overestimation of your liability. For the most accurate assessment, especially if you have multiple trades, it is advisable to first use a dedicated Capital Gain Tax Calculator for India to determine your exact taxable STCG and LTCG figures. Our calculator adheres to Section 111A (STCG) and Section 112A (LTCG) of the Income Tax Act to provide a precise calculation.

The choice between the Old and New Tax Regimes is the single most important decision for Indian taxpayers this year. The New Tax Regime (default) has been structurally improved to be more attractive for the majority of earners. It features wider tax slabs, lower tax rates, and an increased Standard Deduction of ₹75,000. It is designed for simplicity—you earn, you pay, and you don't need to lock money in specific schemes.

However, the Old Tax Regime remains the best option for those with significant financial commitments. It allows for a plethora of deductions that reduce your "Net Taxable Income." If you are paying a large home loan interest (Section 24b), have high insurance premiums (Section 80D), and maximize your Section 80C limit (₹1.5 Lakhs), the Old Regime can still save you more money.

The Breakeven Point: As a general rule of thumb, if your total eligible deductions (80C + 80D + HRA + Home Loan) exceed roughly ₹3.75 Lakhs, sticking to the Old Regime is usually beneficial. If your deductions are below this threshold, switching to the New Regime will likely increase your take-home salary. Use the comparison tool above to check your specific breakeven point.

The tax slabs have been revised to provide relief to the middle class. Under the New Regime, income up to ₹3 Lakhs is completely exempt from tax. The subsequent slabs are progressive:

In contrast, the Old Regime has a lower exemption limit of ₹2.5 Lakhs. It jumps directly to 20% tax for income between ₹5L and ₹10L, and 30% for anything above ₹10L. This steep jump to 20% and 30% is why deductions are absolutely necessary to make the Old Regime viable for high earners.

Section 87A is a tax rebate designed to provide relief to taxpayers with lower income levels. Under the New Tax Regime, if your net taxable income does not exceed ₹7 Lakhs, you are eligible for a rebate of up to ₹25,000. This effectively means that anyone earning up to ₹7 Lakhs (plus the standard deduction) pays Zero Tax.

It is important to note that this is a "cliff" rebate. If your income exceeds ₹7 Lakhs by even a small margin, the rebate vanishes, and you are taxed on the entire amount above the basic exemption limit (though marginal relief provisions may apply in specific edge cases). Under the Old Regime, this rebate limit is much lower—available only if taxable income is ₹5 Lakhs or less, with a maximum rebate of ₹12,500.