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Income Tax Calculation

Filing ITR in 15 minutes. Let our experts calculate your exact tax liability, compare old vs new regime, and identify every deduction you're eligible for.

Overview

How Income Tax is Calculated in India

Income tax in India is calculated on your "Total Income" — the aggregate of income from all five heads after allowing permissible deductions. The tax is then computed as per the applicable slab rates for the Assessment Year.

India has two tax regimes: the Old Tax Regime (with deductions and exemptions) and the New Tax Regime (lower slab rates, no deductions). Choosing the right regime can significantly impact your tax liability.

📅 AY 2025–26 Note

Tax calculation for AY 2025-26 (FY 2024-25). The New Tax Regime is the default regime. Individuals must specifically opt for the Old Regime while filing their return.

Five Heads of Income

1. Income from Salary

Basic salary, HRA, allowances, perquisites, Leave encashment, gratuity (taxable portion)

2. Income from House Property

Rent received minus standard deduction (30%) minus interest on home loan

3. Profits & Gains from Business/Profession

Net profit from business, professional fees, presumptive income under 44AD/44ADA

4. Capital Gains

Short-term (STCG) and Long-term capital gains (LTCG) from sale of assets, shares, mutual funds

5. Income from Other Sources

Interest (FD, savings), dividends, winnings from lottery, family pension

Tax Slabs

Old vs New Tax Regime — AY 2025-26

Compare both regimes to determine which saves you more tax. The right choice depends on your deductions and income level.

Income SlabOld Regime RateNew Regime Rate (AY 2025-26)
Up to ₹2,50,000 (₹3L for 60+, ₹5L for 80+)NilNil (up to ₹3 lakh)
₹2,50,001 – ₹5,00,0005%5% (₹3L–₹7L)
₹5,00,001 – ₹10,00,00020%10% (₹7L–₹10L)
₹10,00,001 – ₹12,00,00030%15% (₹10L–₹12L)
₹12,00,001 – ₹15,00,00030%20% (₹12L–₹15L)
Above ₹15,00,00030%30%

*Plus 4% Health & Education Cess on tax amount. Surcharge applicable on income above ₹50 lakh.

Deductions

Key Deductions Under Old Tax Regime

The old regime allows numerous deductions. Claiming all eligible deductions can significantly reduce your tax liability.

💰

Section 80C

Investments up to ₹1.5L: PPF, ELSS, LIC, EPF, NSC, home loan principal

🏥

Section 80D

Health insurance premium: ₹25K (self/family), ₹50K (senior citizen parents)

🏠

Section 24(b)

Interest on home loan: up to ₹2L for self-occupied property

🎓

Section 80E

Interest on education loan — no upper limit, for 8 years

🤝

Section 80G

Donations to approved funds: 50%–100% deduction

👴

Section 80TTB

Interest income for senior citizens: up to ₹50,000 exempt

Process

How Acculex Calculates Your Tax

We don't just compute your tax — we optimise it. Our experts compare both regimes and choose the one that saves you more.

1

Share Documents

Provide Form 16, bank statements, investment proofs, rent receipts, and loan certificates.

2

Income Computation

Our CA computes income under all applicable heads — salary, house property, capital gains, other sources.

3

Deduction Optimization

We identify and apply every eligible deduction under Chapter VI-A to minimize your taxable income.

4

Regime Comparison

We calculate tax under both old and new regime and recommend the one that results in lower tax.

5

Tax Liability Statement

You receive a detailed computation sheet showing gross income, deductions, taxable income, and final tax payable.

6

ITR Filing

We file your return with the optimized tax computation and assist with e-verification.

FAQ

Frequently Asked Questions

What is the basic exemption limit for AY 2025-26?
Under the Old Regime: ₹2.5 lakh (below 60), ₹3 lakh (60–80 years), ₹5 lakh (above 80 years). Under the New Regime: ₹3 lakh for all individuals, with rebate u/s 87A making income up to ₹7 lakh effectively tax-free.
Is it always better to choose the New Tax Regime?
Not necessarily. If you have significant deductions (80C investments, home loan interest, HRA, etc.), the Old Regime may result in lower tax. Our experts compare both and recommend the best option for you.
What is Section 87A rebate?
Individuals with total income not exceeding ₹5 lakh (Old Regime) or ₹7 lakh (New Regime) get a rebate equal to their total tax liability, effectively making their tax zero.
How is tax on capital gains calculated?
LTCG on listed equity/mutual funds above ₹1 lakh is taxed at 12.5%. STCG on equity is taxed at 20%. LTCG on other assets (property, gold) is taxed at 12.5% without indexation. Other STCG is added to income and taxed at slab rates.
What is surcharge on income tax?
Surcharge applies if income exceeds ₹50 lakh: 10% (₹50L–₹1Cr), 15% (₹1Cr–₹2Cr), 25% (₹2Cr–₹5Cr), 37% above ₹5Cr (capped at 25% under New Regime).

Get Your Tax Calculated by Expert CAs

Accurate tax computation, regime comparison, and optimised ITR filing. Starting at just ₹399.

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