What is Section 87A rebate for FY 2025-26?

Under the new regime, if your net taxable income is ₹12 lakh or below, Section 87A provides a full tax rebate (up to ₹60,000). Under the old regime, 87A rebate applies if net taxable income is ₹5 lakh or below (max ₹12,500). This means effectively zero income tax for new regime filers earning up to ₹12.75L (after ₹75K standard deduction).

What is the standard deduction for FY 2025-26?

For FY 2025-26, the standard deduction is ₹75,000 under the new regime (increased from ₹50,000 in the 2024 budget) and ₹50,000 under the old regime. It applies to salaried individuals and pensioners automatically, without any documentation.

How is income tax calculated in India?

Indian income tax uses a slab system. For new regime FY 2025-26: 0% up to ₹4L, 5% for ₹4–8L, 10% for ₹8–12L, 15% for ₹12–16L, 20% for ₹16–20L, 25% for ₹20–24L, 30% above ₹24L. A 4% Health & Education Cess applies on total tax. Section 87A rebate eliminates tax for income up to ₹12L under new regime.

What is the effective tax rate?

The effective tax rate is the actual percentage of your total income paid as tax (total tax ÷ gross income × 100). It is always lower than the marginal (top slab) rate because lower income slabs are taxed at lower rates. For example, someone earning ₹15L under new regime pays about 7–8% effective rate, not the 15% marginal rate.

Income Tax Calculator India FY 2025-26

Q: Which income tax regime is better in FY 2025-26?

The new regime is typically better for incomes below ₹7 lakh (zero tax up to ₹12L due to 87A rebate) and for those with limited deductions. The old regime benefits those with high 80C investments (₹1.5L), HRA, home loan interest, and NPS contributions. Use this calculator to compare both and find your savings.

📊

Income Tax Calculator — FY 2025-26 (AY 2026-27)

Live

Annual Gross Income (₹)

Age Group

Employment Type

Deductions — Old Regime

Section 80C max ₹1,50,000

Section 80D — Health Insurance (₹)

Section 80TTA — Savings Interest max ₹10,000

Other Deductions (₹)

✓ Standard deduction of ₹50,000 (old regime) applied automatically for salaried individuals.

📋 Old Regime

₹0

Annual Tax Payable

🆕 New Regime

₹0

Annual Tax Payable

Taxable Income

₹0

Total Tax

₹0

Monthly TDS

₹0

Tax Burden0%

Effective tax rate: 0%

⚡ Expert Help

📅 FY 2025-26 Slabs

🔒 No Data Saved

✅ 87A Rebate Auto-Applied

🇮🇳 India Specific

Income Tax Slabs FY 2025-26 (AY 2026-27)

New Regime (Default)

Income Slab	Rate
Up to ₹4,00,000	0%
₹4,00,001 – ₹8,00,000	5%
₹8,00,001 – ₹12,00,000	10%
₹12,00,001 – ₹16,00,000	15%
₹16,00,001 – ₹20,00,000	20%
₹20,00,001 – ₹24,00,000	25%
Above ₹24,00,000	30%

87A Rebate: Zero tax if income ≤ ₹12L

Old Regime

Income Slab	Rate
Up to ₹2,50,000	0%
₹2,50,001 – ₹5,00,000	5%
₹5,00,001 – ₹10,00,000	20%
Above ₹10,00,000	30%

Senior (60+): ₹3L exempt | Super Senior (80+): ₹5L exempt

Need Income Tax Filing or Advisory?

Our CA team files ITR, optimises deductions, and handles notices — starting at ₹999. All-inclusive, no hidden fees.

⚡ File ITR Through Expert 💬 WhatsApp Us

Frequently Asked Questions

Which income tax regime is better in FY 2025-26?+

The new regime is generally better for most salaried individuals earning up to ₹12 lakh (zero tax due to 87A rebate) and for those with limited deductions. The old regime benefits those with substantial 80C investments (₹1.5L), HRA, home loan interest deduction, and NPS contributions. Use this calculator's "Compare Both" mode to see your exact savings.

What is the 87A rebate for FY 2025-26?+

Under the new regime, Section 87A provides a full tax rebate (up to ₹60,000) if your net taxable income is ₹12 lakh or below. Combined with the ₹75,000 standard deduction, a salaried person earning up to ₹12.75 lakh pays zero income tax under the new regime. Under the old regime, the rebate is up to ₹12,500 for income ≤ ₹5 lakh.

What is the standard deduction for salaried employees in 2025-26?+

The standard deduction is ₹75,000 under the new regime and ₹50,000 under the old regime for FY 2025-26. It applies automatically to all salaried individuals and pensioners without any documentation or proof of expense.

What is the Health & Education Cess?+

A 4% Health & Education Cess is levied on your calculated income tax (after applying any rebate). This cess applies regardless of whether you choose the old or new regime. It is used for health and education infrastructure development across India.

How is the effective tax rate different from the marginal rate?+

Your effective rate is total tax paid ÷ gross income × 100. It is always lower than the marginal (top slab) rate because only income in each slab is taxed at that slab's rate. For example, someone earning ₹15L under new regime faces a 15% marginal rate but only an approximately 7% effective rate.