Income Tax Calculator
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What is an Income Tax Calculator?
An income tax calculator is an online tool that helps to estimate the income tax for FY24-25 (AY25-26) an individual should pay based on certain criteria, such as taxable income, eligible exemptions, and deductions based on the investments made.
Tax slabs and considerations can vary depending on the chosen tax regime. Use the ShriramLife Income Tax Calculator to get your tax assessment.
How does an Income Tax Calculator Operate?
An online income tax calculator operates by collecting various information, such as annual income, investments, and interest on loan repayment, if applicable. With the help of an online Income Tax calculator, individuals can estimate the total tax expense for the financial year. It is important to enter accurate data for the calculator to determine the estimated payable tax.
How can an Income Tax Calculator Help You?
An Online Income Tax Calculator can help an individual to calculate their taxable income. It also helps you to maximise your tax savings.
An Online Income Tax Calculator helps you with the following.
- To estimate tax liability: Shriram Life Income tax calculator helps you determine the amount of tax you should pay for the year based on your income, deductions and other factors.
- Planning finances: An online tax calculator estimates tax liability and helps to plan finances accordingly.
- Optimising deductions: Online Income Tax Calculator helps you understand how different deductions can impact your taxes, allowing you to optimize your tax-saving strategies.
Key Features and Benefits of Online Tax Calculator
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Easy-to-use calculator
The benefits of an Online Income Tax Calculator are
- Calculates your tax liability
- Estimates the amount of tax owed to the government
- Free to use
- Easy-to-use interface
Experience the ease of home utilisation
An income tax calculator can be conveniently used from home, eliminating the need to step out. Accessible online, it ensures a hassle-free experience while calculating your income tax.
Provides estimated tax expense and Comprehensive Information
Using an income tax calculator to estimate your tax payments helps you plan your finances ahead of time. This lets you manage your expenses and other financial needs without any trouble later on.
Facilitates Advanced Expense Management
By using an income tax calculator to estimate your tax payment, you can effectively plan your finances in advance. This allows you to manage your expenses and other financial requirements without any future hassle.
Steps to Use Online Income Tax Calculator
It is very easy and simple to use the Shriram Life Online Income Tax Calculator.
Step 01
Enter the basic details on the website.
Step 02
Enter the investment details.
Step 03
Enter the Loan interest details.
Step 04
With the provided information, the calculator will give you the Income tax you
should pay under both the old and new tax regimes.
Understanding the Basics of Income Tax in India
Income tax is the contribution individuals and businesses make to the government based on their annual earnings. It helps fund public services, development projects, and welfare schemes. Understanding how it works makes financial planning easier. The sections below explain key concepts like FY vs AY and taxable income, helping you interpret your tax obligations clearly and use tools like an income tax calculator more effectively.
FY vs AY
The Financial Year (FY) is when you earn your income, and the Assessment Year (AY) is when that income is reviewed and taxed. Knowing this difference is vital for filing accurate returns and claiming deductions.
- FY: Period of income generation (e.g., 1 April 2024 – 31 March 2025)
- AY: Period of income assessment (e.g., 2025–26)
- Helps in planning tax-saving investments and filing on time
What is Taxable income?
Taxable income is the total income on which tax is calculated after deducting eligible exemptions and deductions. It includes salary, rent, business profits, and even interest from savings accounts.
For example, if your annual income is ₹10 lakh and you claim deductions worth ₹1.5 lakh, your taxable income becomes ₹8.5 lakh. Knowing how to calculate income tax on savings bank interest helps ensure accurate reporting.
Budget 2025 Updates on Income Tax
Budget 2025 introduces important changes affecting how individuals plan their taxes and savings. Using an income tax calculator can help estimate your liability under the new provisions. For account holders, knowing how to calculate income tax on savings bank interest is now more important than ever. These updates ensure better financial planning and help optimise tax-saving strategies.
- Updated tax slabs and exemptions for FY 2025–26
- Changes in deductions under sections 80C, 80D, and 80TTA
- Interest from savings bank accounts is now considered under taxable income
Comparing FY 2024-25 & FY 2025-26
Comparing FY 2024-25 (AY 2025-26) and FY 2025-26 (AY 2026-27) helps plan taxes and investments effectively. Tools like an income tax calculator make it easier to estimate liabilities and optimise deductions. Being aware of changes in savings bank interest taxation also helps you plan finances efficiently.
| Feature | FY 2024-25 (AY 2025-26) | FY 2025-26 (AY 2026-27) |
|---|---|---|
| Tax slabs | Existing slabs | Revised slabs as per Budget 2025 |
| Deductions | 80C, 80D, 80TTA | Updated limits and exemptions |
| Savings bank interest | Taxable | Same, with revised exemption limits |
Eligibility for Exemptions in the Old and New Tax Regime
The Indian tax system offers two options: the old regime with multiple exemptions and deductions, and the new regime with lower tax rates but limited exemptions. Choosing the right one depends on your income, investments, and financial goals. Using an income tax calculator can help you compare both regimes and decide which suits you better.
- Old Regime: Allows deductions under sections 80C, 80D, HRA, and standard exemptions.
- New Regime: Offers simplified tax rates with fewer deductions.
- Evaluate both using an income tax saving calculator before filing.
Examples Based on Old and New Tax Regimes
New tax regime
Under the new tax regime, income up to INR 7 lakh per annum is tax exempted. The income tax rates for the new regime are below.
| S.no. | Income Slabs | Tax Rates (age up to 60 years) |
|---|---|---|
| 1. | Till INR 3 LPA | Nil |
| 2. | Above INR 3 LPA – INR 7 LPA | 5% on the income above INR 3 LPA (if net income is above INR 7 LPA) |
| 3. | Above INR 7 LPA – INR 10 LPA | 20,000 + 10% on income above INR 7 LPA |
| 4. | Above INR 10 LPA – INR 12 LPA | 50,000 + 15% on income above INR 10 LPA |
| 5. | Above INR 12 LPA – INR 15 LPA | 80,000 + 20% on income above INR 12 LPA |
| 6. | Income above INR 15 LPA | 1.4 lakhs + 30% on income above INR 15 LPA |
A maximum rebate of Rs. 75,000 is allowed u/s 87A, if the total income of a resident individual, is up to Rs. 7,00,000.
Scenario 1
If your yearly income is 6.5 lakhs, it falls within the 3–7 lakh slab of the new tax regime and is below the INR 7 lakh per annum threshold. In this case, you are not required to pay taxes to the income tax department. However, filing a nil Income Tax Return (ITR) is recommended.
Scenario 2
If your yearly income is 8.5 lakhs, it falls within the 7-10 lakh slab of the new tax regime and is above the INR 7 lakh threshold. Therefore, you are liable to pay income tax.
Old regime
Under the old tax regime, income up to INR 5 lakh per annum is tax exempted. Below are the income tax rates for the old regime.
| S.no. | Income Slabs | Tax Rates (age up to 60 years) |
|---|---|---|
| 1. | Till INR 2.5 LPA | Nil |
| 2. | Above INR 2.5 LPA – INR 5 LPA | 5% on the income above INR 2.5 LPA (if net income is above INR 5 LPA) |
| 3. | Above INR 5 LPA – INR 10 LPA | 12,500 + 20% on income above INR 5 LPA |
| 4. | Income above INR 10 LPA | 1,12,500 + 30% on income above INR 10 LPA |
A maximum rebate of Rs. 12,500 is allowed u/s 87A, if the total income of a resident individual, is up to Rs. 5,00,000
Scenario 1
If your yearly income is 4 lakhs, it falls within the old tax regime's 2.5–5 lakh slab. In this case, you are not liable to pay the income tax. However, filing a nil Income Tax Return (ITR) is recommended.
Scenario 2
If your annual income is 7 lakhs and you have chosen the old tax regime, your income falls within the 5-10 lakh slab, exceeding the INR 5 lakh threshold, requiring you to pay tax.
Types of Deductions Available for Salaried Individuals
Receiving the HRA Component
For salaried persons who have taken a house on rent, this exemption is applicable for those individuals having an allocated HRA component in their salary not exceeding 50% of their basic salary. Additionally, one cannot claim the complete amount paid as a rental expense. The exemption will be based on the lowest of the options listed below.
- 10% of the basic salary deducted from the actual rent paid
- HRA component allocated by the employer
- 50% of the basic salary if a salaried person is living in a metropolitan city, 40% otherwise
Case Study
Ram is working in Chennai, a metropolitan city. He lives in a rented apartment that costs him INR 20,000 monthly. His basic salary is INR 40,000, and he receives INR 10,000 as an HRA component.
| S.no. | Yearly Particulars | Rented expense | Exempted HRA value |
|---|---|---|---|
| 1. | Rent paid – 10% of basic salary | (20,000 x 12) – 10%*(40,000*12) | 1,92,000 |
| 2. | HRA received | NA | 10,000 x 12 = 1,20,000 |
| 3. | City component | 50%*(40,000*12) | 2,40,000 |
The lowest amount in the exempted HRA column is 1,20,000. So, Ram can claim for the deductions of INR 1,20,000. *Annual rent above INR 1 lakh requires the landlord’s PAN card for income tax filing.
Individuals not Receiving HRA
For salaried/self-employed persons who do not receive house rent allowance (HRA) and have taken a house on rent. Similar to individuals receiving HRA and having taken a house on rent, one cannot claim the complete amount paid for rent. The exemption will be based on the lowest of the options listed below.
- 10% of the basic salary deducted from the actual rent paid
- INR 60,000 yearly (INR 5000 per month)
- 25% of total income
Case Study
Ram is a working professional. He lives in a rented apartment, which costs him INR 20,000 monthly. His yearly total income is INR 6 lakhs, and he does not receive an HRA component.
| S.no. | Yearly Particulars | Rented expense | Exempted value for rent expense |
|---|---|---|---|
| 1. | Rent paid – 10% of basic salary | (20,000 x 12) – 10%*(40,000*12) | 1,92,000 |
| 2. | INR 5000 per month | Nil | 60,000 |
| 3. | 25% of total income | 25%*(6,00,000) | 1,50,000 |
The lowest amount in the exempted value for rent expense column is 60,000. So, Ram can claim for the deductions of INR 60,000.
FAQ's
What information do I need to use an Income Tax Calculator?
What information do I need to use an Income Tax Calculator
