Understand the estimate
Income tax calculation guide
Open the sections below to see how income, exemptions, deductions, slabs, rebate, surcharge, and cess are handled. The estimator is designed for individual salary planning rather than return filing.
How the calculation flows
1. Add income
Salary, interest, rental income, VDA transfer gains, and other income are captured as annual values.
2. Reduce eligible claims
Exemptions and deductions are capped using the calculator rules before taxable income is computed.
3. Apply tax rules
The estimator applies slab tax, 87A rebate, surcharge where relevant, and 4% Health and Education Cess.
Flow: Gross income → exemptions → deductions → taxable income → slab tax → rebate → surcharge → cess → final estimate.
Income sources included
Gross salary
Used for salary income and standard deduction. The old regime applies up to ₹50,000; the new regime applies up to ₹75,000.
Interest and other income
Added to regular income and taxed through the selected regime slabs after eligible deductions.
Rental income
Gross rent is reduced by the statutory 30% house-property deduction before entering regular income.
VDA transfer gains
Crypto/NFT gains are kept outside regular slab income and taxed at 30% plus applicable surcharge and cess.
Exemptions and house-property treatment
HRA/LTA exempt allowances
Enter only the exempt portion. Eligibility depends on salary structure, rent, city, travel proof, and employer documents.
Self-occupied home loan interest
The old regime counts up to ₹2 lakh. The new regime does not reduce taxable salary for this input.
Let-out home loan interest
The old regime can set off rental loss up to ₹2 lakh beyond rent. The new regime only offsets rental income in this estimator.
Deductions and sections covered
| Input | Section / concept | How this estimator treats it |
|---|---|---|
| 80C | LIC / PPF / EPF and eligible items | Old regime only, capped at ₹1.5 lakh. |
| 80D | Medical insurance | Old regime only, using the selected ₹25k to ₹1 lakh limit. |
| 80CCD(1B) | Self NPS contribution | Old regime only, capped at ₹50,000. |
| 80CCD(2) | Employer NPS contribution | Counted in both regimes with salary-linked caps: old uses 10% or 14% for government; new uses 14%. |
| 80EEA | Affordable housing loan interest | Old regime only, capped at ₹1.5 lakh. Eligibility conditions are not independently validated. |
| 80TTA / 80TTB | Savings / deposit interest deduction | Old regime only, capped at ₹10,000 for general taxpayers and ₹50,000 for seniors. |
| 80G | Donations | Old regime only. The estimator uses the amount entered and does not classify donation eligibility. |
| Other deductions | User-entered eligible claims | Old regime only. Use only claims you can substantiate. |
Old vs new regime handling
The new regime is the default tax regime. This calculator still compares both because eligible taxpayers may opt out and use the old regime when their exemptions and deductions make it more beneficial.
Old regime
Allows the listed exemptions and deductions, uses age-based basic exemption limits, and applies the old 87A rebate threshold.
New regime
Uses the FY 2026-27 new slabs, higher standard deduction, employer NPS support, and a higher 87A rebate threshold.
Rebate, surcharge, and cess
Section 87A rebate
Old regime rebate is modelled up to ₹5 lakh total income. New regime rebate is modelled up to ₹12 lakh total income with marginal relief just above the threshold.
Surcharge
Applied above ₹50 lakh income, with marginal relief around surcharge thresholds. The new regime surcharge is capped at 25% for the highest band.
Health and Education Cess
A 4% cess is added after slab tax, rebate, and surcharge calculations.
What this calculator does not cover
- • Capital gains other than VDA transfer gains, agricultural-income integration, foreign income, AMT, arrears relief, double-taxation relief, interest, and filing penalties.
- • Detailed donation classification, municipal-tax adjustment, vacancy adjustment, employer payroll rules, proof checks, or ITR form preparation.
- • Professional tax advice. The result is an educational estimate and should be reviewed before filing or making tax decisions.
Frequently asked questions
Why does a deduction reduce old-regime tax but not new-regime tax?
Most classic deductions, including 80C, 80D, 80CCD(1B), 80EEA, 80TTA/TTB, 80G, and other user-entered deductions, are old-regime benefits. The new regime gives simpler slabs and selected benefits such as the standard deduction and employer NPS contribution.
Why is VDA or crypto shown separately?
VDA transfer gains are taxed at a special 30% rate and should not be mixed into the normal progressive slab calculation. The estimator keeps them separate, then applies surcharge and cess to the total tax result.
Can I use this directly for ITR filing?
No. Use it as an educational estimate and planning check. Filing may require capital-gains schedules, employer Form 16 details, AIS/TIS reconciliation, donation eligibility, arrears relief, and other case-specific items.
Why can the recommended regime change after one input?
The old regime becomes stronger as eligible exemptions and deductions rise. The new regime often wins when deductions are limited, income is near the new rebate threshold, or the lower slab structure offsets old-regime benefits.