What is the standard deduction for salaried employees under the New Tax Regime?

For FY 2024-25 and FY 2025-26 (AY 2025-26 / AY 2026-27), the standard deduction under the New Tax Regime has been increased to ₹75,000 for salaried employees and pensioners (up from ₹50,000). Under the Old Tax Regime, the standard deduction remains ₹50,000.

What is the Section 87A rebate limit under the New Tax Regime?

Under the New Tax Regime, resident individuals with total taxable income up to ₹7,00,000 are eligible for a full tax rebate of up to ₹25,000 under Section 87A. Combined with the ₹75,000 standard deduction, a salaried employee with a gross CTC of up to ₹7,75,000 pays ₹0 income tax.

What are the New Tax Regime tax slabs for FY 2024-25 / FY 2025-26?

The revised New Tax Regime slabs are: (1) Up to ₹3,00,000: Nil; (2) ₹3,00,001 to ₹7,00,000: 5%; (3) ₹7,00,001 to ₹10,00,000: 10%; (4) ₹10,00,01 to ₹12,00,000: 15%; (5) ₹12,00,001 to ₹15,00,000: 20%; (6) Above ₹15,00,000: 30%. In addition, a 4% Health & Education Cess applies on the total tax payable.

Which tax regime should I choose: Old or New?

Choose the New Tax Regime if your total deductions (80C, 80D, HRA, home loan interest) are less than ₹3.75 Lakhs to ₹4.25 Lakhs, as the lower tax rates provide higher net take-home salary. Choose the Old Tax Regime if you have large deductions exceeding ₹4 Lakhs annually.

Can I switch between the Old and New Tax Regimes every year?

Salaried individuals without business or professional income can freely switch between the Old and New Tax Regimes every financial year at the time of filing their Income Tax Return (ITR).

Income Tax Calculator

Free online Indian Income Tax Calculator for FY 2024-25 and FY 2025-26. Compare Old vs New Tax Regimes, claim ₹75,000 standard deduction, 80C, 80D, and Section 87A rebates instantly.

⚡ Interactive Calculation Engine Active

Please enable JavaScript in your browser to run live computations, 2D envelope diagrams, and export PDF reports.

How to Use Income Tax Calculator

Enter your Gross Annual Salary and any Income from Other Sources (interest, dividends, rental income).
Select your Assessment Year / Financial Year (FY 2024-25 or FY 2025-26).
Under the Old Regime tab, input eligible deductions under Section 80C (PPF, ELSS, EPF), Section 80D (Health Insurance), Section 24(b) (Home Loan Interest), and Section 10(13A) (HRA).
Review the side-by-side comparison of Tax Payable, Cess, Section 87A Rebate, and identify the regime that saves you maximum tax.

New vs. Old Tax Regime Comparison Table (FY 2024-25 & FY 2025-26)

Here is a quick side-by-side comparison of the core provisions: • **Standard Deduction**: ₹75,000 (New Regime) vs. ₹50,000 (Old Regime) • **Tax-Free Income Threshold (Salaried)**: ₹7,75,000 (New Regime with 87A rebate) vs. ₹5,50,000 (Old Regime) • **Section 80C Deductions (PPF, ELSS, EPF)**: Not Allowed in New Regime | Up to ₹1,50,000 allowed in Old Regime • **Section 80D (Health Insurance)**: Not Allowed in New Regime | Up to ₹75,000 allowed in Old Regime • **HRA Section 10(13A)**: Not Allowed in New Regime | Allowed in Old Regime • **Home Loan Interest Sec 24(b)**: Not Allowed in New Regime | Up to ₹2,00,000 allowed in Old Regime

Breakeven Calculation: When Does Old Regime Win?

For an individual earning ₹15 Lakhs gross salary: • Under the New Regime, tax payable is approximately ₹1,35,200 (including 4% cess). • Under the Old Regime with standard deduction (₹50k), Section 80C (₹1.5L), Section 80D (₹25k), and HRA (₹1.5L), total deductions = ₹3,75,000. Tax payable is approximately ₹1,53,400. • In this scenario, the New Regime saves over ₹18,000 in net taxes.

Frequently Asked Questions

What is the standard deduction for salaried employees under the New Tax Regime?: For FY 2024-25 and FY 2025-26 (AY 2025-26 / AY 2026-27), the standard deduction under the New Tax Regime has been increased to ₹75,000 for salaried employees and pensioners (up from ₹50,000). Under the Old Tax Regime, the standard deduction remains ₹50,000.
What is the Section 87A rebate limit under the New Tax Regime?: Under the New Tax Regime, resident individuals with total taxable income up to ₹7,00,000 are eligible for a full tax rebate of up to ₹25,000 under Section 87A. Combined with the ₹75,000 standard deduction, a salaried employee with a gross CTC of up to ₹7,75,000 pays ₹0 income tax.
What are the New Tax Regime tax slabs for FY 2024-25 / FY 2025-26?: The revised New Tax Regime slabs are: (1) Up to ₹3,00,000: Nil; (2) ₹3,00,001 to ₹7,00,000: 5%; (3) ₹7,00,001 to ₹10,00,000: 10%; (4) ₹10,00,01 to ₹12,00,000: 15%; (5) ₹12,00,001 to ₹15,00,000: 20%; (6) Above ₹15,00,000: 30%. In addition, a 4% Health & Education Cess applies on the total tax payable.
Which tax regime should I choose: Old or New?: Choose the New Tax Regime if your total deductions (80C, 80D, HRA, home loan interest) are less than ₹3.75 Lakhs to ₹4.25 Lakhs, as the lower tax rates provide higher net take-home salary. Choose the Old Tax Regime if you have large deductions exceeding ₹4 Lakhs annually.
Can I switch between the Old and New Tax Regimes every year?: Salaried individuals without business or professional income can freely switch between the Old and New Tax Regimes every financial year at the time of filing their Income Tax Return (ITR).