Union Budget 2025 announced changes in the income tax slabs and taxation rates, impacting the salaried class who have opted (or will opt) for the new tax regime. Shortly after this, the Income Tax Department (ITD) launched a tax calculator for the new regime that will help taxpayers determine their tax liability.
This calculator will help you evaluate your tax savings under the New Tax Regime (NTR) for the financial year 2024-25 and 2025-26. Taxpayers can further use this calculator to determine which tax regime is better for them by entering their income and deductions.
What changes were announced in Budget 2025?
In order to push for greater acceptance of NTR, the central government has made it a default tax regime while also making it more attractive in comparison to the old tax regime.
In Budget 2025, Finance Minister Nirmala Sitharaman announced that taxpayers earning up to Rs 12 lakh in a financial year (excluding any special rate) income will not have to pay any taxes. In addition to this, the income tax slabs under NTR have also been revised to provide better tax savings for individuals under this tax regime.
Updated Tax Slab Rates Under New Tax Regime
Upto Rs 4 lakh: Nil
Rs 4-8 lakh: 5 per cent
Rs 8-12 lakh: 10 per cent
Rs 12-16 lakh: 15 per cent
Rs 16-20 lakh: 20 per cent
Rs 20- 24 lakh: 25 per cent
Above Rs 24 lakh: 30 per cent
Now, let’s understand how you can use ITD’s new income tax calculator;
The income tax calculator will help you with tax comparisons under the new regime based on proposals announced in the Finance Bill 2025. This calculation will help you assess how much tax you will save from April 1, 2025, as new income tax slabs come into effect.
When you are using the income tax calculator, you’ll see the following slots;
Tax Payer - Individual (Pre-set)
Residential Status - (Resident or Non-Resident)
Taxable income (Other than special rate income) -
Total tax as per existing rates (FY 2024-25) -
(Including Surcharge and Health and Education cess)
Total tax as proposed by Finance Bill 2025 (FY 2025-26) -
(Including Surcharge and Health and Education cess)
You can access the income tax department’s tax calculator here
While using this income tax calculator select your residential status (which will be set to ‘Residential’ as a default setting). Next, enter your taxable income excluding any special rate income (such as any earnings from capital gains).
Once you enter this, the calculator will generate a detailed comparison, showing your total tax liability under the new tax regimes vis-a-vis existing rates (for FY 2024-25) and total tax payable under the Finance Bill 2025 (FY 2025-26). This calculation will include a surcharge and health and education cess.
For instance, if your income is Rs 13 lakh, the calculator will show you how much is your tax liability and how much you will benefit from existing rates.
Taxable income (Other than special rate income): Rs 1,300,000
Total tax as per existing rates (FY 2024-25): Rs 1,04,000
Total tax as proposed by Finance Bill 2025 (FY 2025-26): Rs 78,000
Net tax savings: Rs 26,000
(Total tax calculations including surcharge and health and education cess)
The calculator shows the net savings taxpayers will get under the NTR and helps them make informed choices. However, ITD notes that this calculator is only to enable a taxpayer to have quick and easy access to basic tax calculations and does not intend to give correct tax calculations in all circumstances.
