Question 1

What is the new tax regime for FY 2024-25?

Accepted Answer

For FY 2025-26 and tax year 2026-27 (rates unchanged by Budget 2026), the new regime slabs are: No tax up to Rs. 4 lakh, 5% for Rs. 4-8 lakh, 10% for Rs. 8-12 lakh, 15% for Rs. 12-16 lakh, 20% for Rs. 16-20 lakh, 25% for Rs. 20-24 lakh and 30% above Rs. 24 lakh. Salaried people get a standard deduction of Rs. 75,000, and a rebate of up to Rs. 60,000 means no tax when taxable income is Rs. 12 lakh or less (about Rs. 12.75 lakh of salary), with marginal relief just above that. (FY 2024-25 used the older slabs: nil up to Rs. 3 lakh and a Rs. 7 lakh rebate limit.)

Question 2

Which is better - new tax regime or old tax regime?

Accepted Answer

It depends on your deductions. If you have significant deductions under 80C (Rs. 1.5 lakh), 80D (health insurance), HRA, and home loan interest, old regime may be better. If you have minimal deductions, new regime usually results in lower tax due to higher rebate and lower rates.

Question 3

What is the rebate under Section 87A?

Accepted Answer

Under the new regime (FY 2025-26 onwards), the rebate is up to Rs. 60,000, so you pay no tax if your taxable income is Rs. 12 lakh or less; just above Rs. 12 lakh, marginal relief limits your tax to the income above Rs. 12 lakh. Under the old regime, the rebate is up to Rs. 12,500 for taxable income up to Rs. 5 lakh, with no marginal relief.

Question 4

What deductions are available under old tax regime?

Accepted Answer

Old regime allows: Section 80C (up to Rs. 1.5 lakh for PF, PPF, ELSS, LIC), Section 80D (health insurance up to Rs. 75,000), HRA exemption, home loan interest (up to Rs. 2 lakh), NPS (additional Rs. 50,000), and standard deduction of Rs. 50,000.

Question 5

How is income tax calculated in India?

Accepted Answer

Income tax is calculated by: 1) Calculate gross total income, 2) Deduct exemptions and deductions (if old regime), 3) Apply tax slabs to taxable income, 4) Add 4% Health & Education Cess, 5) Apply rebate if eligible. Our calculator does all this automatically.

Question 6

What is the standard deduction for FY 2024-25?

Accepted Answer

Standard deduction is Rs. 75,000 under new regime and Rs. 50,000 under old regime for FY 2024-25. This was increased from Rs. 50,000 in Budget 2024 for the new regime to make it more attractive.

Question 7

Can I switch between old and new tax regime?

Accepted Answer

Yes, salaried employees can switch between regimes every year. You can choose the regime while filing ITR. However, once you file, you cannot change for that year. Business/professional income holders have restrictions on switching.

Question 8

What is Health and Education Cess?

Accepted Answer

Health and Education Cess is 4% of the total income tax payable. It is charged on top of the calculated tax and applies to both old and new tax regimes. It funds healthcare and education initiatives.

Question 9

Is new tax regime default from FY 2023-24?

Accepted Answer

Yes, from FY 2023-24, the new tax regime is the default option. If you want to opt for the old regime, you need to specifically choose it while filing ITR or submit Form 10-IEA to your employer.

Question 10

How accurate is this income tax calculator?

Accepted Answer

Our calculator uses the official slabs, rebate, surcharge and cess for FY 2025-26 and tax year 2026-27 (unchanged by Budget 2026). It provides accurate estimates for most salaried individuals. For complex cases involving capital gains, business income, or multiple sources, consult a tax professional.

Income Tax Calculator India

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