CBDT's Official Income Tax Calculator for FY 2025-26: Comparing Old vs. New Tax Regime

Tax planning is an important part of financial management for every salaried or self-employed individual in India. With the introduction of revised tax slabs for FY 2025-26, many taxpayers are wondering whether they should continue with the Old Tax Regime or switch to the New Tax Regime.

To help taxpayers make an informed decision, the Central Board of Direct Taxes ( CBDT ) has introduced an Official Income Tax Calculator for the Financial Year (FY) 2025-26. This tool allows individuals to compare their tax liability under both regimes and determine which one is better suited for them.

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What is the CBDT Income Tax Calculator?

The CBDT Income Tax Calculator is an online tool that helps taxpayers compute their income tax liability based on the latest tax slabs.

The calculator requires the user to input:

• Annual income
• Deductions and exemptions (for Old Tax Regime)
• Salary structure (HRA, Standard Deduction, etc.)
• Other sources of income (e.g., interest, rental income)

The calculator then provides:

1. Tax payable under the Old Tax Regime
2. Tax payable under the New Tax Regime
3. The difference in tax liability
4. The best option based on the inputs provided

This makes it easier for taxpayers to understand which tax regime offers the maximum savings.

Understanding the Old vs. New Tax Regime

The Indian tax system currently offers two tax regimes:

1. Old Tax Regime – Higher tax rates but allows deductions and exemptions.
2. New Tax Regime – Lower tax rates but fewer deductions.

Let us look at the tax slab rates for FY 2025-26 under both regimes.

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Income Tax Slabs for FY 2025-26

Income Slab	Old Tax Regime Rates	New Tax Regime Rates
Up to Rs. 2.5 lakh	0%	0%
Rs. 2.5 lakh - Rs. 5 lakh	5%	0%
Rs. 5 lakh - Rs. 10 lakh	20%	10%
Rs. 10 lakh - Rs. 12 lakh	30%	10%
Rs. 12 lakh - Rs. 16 lakh	30%	15%
Rs. 16 lakh - Rs. 20 lakh	30%	20%
Rs. 20 lakh - Rs. 24 lakh	30%	25%
Above Rs. 24 lakh	30%	30%

Key Changes in the New Tax Regime:

• No tax on income up to Rs. 4 lakh.
• Higher rebates, making income up to Rs. 12.75 lakh tax-free.
• Lower tax rates for middle-income earners.
• Only a Rs. 75,000 standard deduction is allowed (No HRA, 80C, etc.).

Old Tax Regime Advantages:

• Allows deductions under Section 80C, 80D, 24B (home loan), NPS, HRA, etc.
• Ideal for those with significant deductions.

New Tax Regime Advantages:

• Simplifies taxation with lower rates.
• Ideal for those without major deductions.

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Comparison: Old Tax Regime vs. New Tax Regime (Example for Rs. 15 Lakh Salary)

Let’s analyze the tax liability for an individual earning Rs. 15 lakh per annum under both regimes.

Particulars	Old Tax Regime	New Tax Regime
Gross Salary	Rs. 15,00,000	Rs. 15,00,000
Deductions Available	Rs. 8,25,000 (80C, 80D, HRA, etc.)	Rs. 75,000 (Standard Deduction)
Net Taxable Income	Rs. 6,75,000	Rs. 14,25,000
Total Tax Before Cess	Rs. 47,500	Rs. 93,750
Cess (4%)	Rs. 1,900	Rs. 3,750
Final Tax Payable	Rs. 49,400	Rs. 97,500
Savings in Old Regime	Rs. 48,100	-

Observations:

• If you have high deductions, the Old Tax Regime is better and helps save Rs. 48,100.
• If you do not have major deductions, the New Tax Regime is easier to manage.

How to Use the CBDT Income Tax Calculator

Using the CBDT Official Income Tax Calculator is simple. Follow these steps:

Step 1: Visit the Official CBDT Website

The calculator is available on the official Income Tax e-filing website.

Step 2: Enter Your Income Details

• Annual Salary / Gross Income
• Other Sources of Income (interest, rental income, etc.)
• Applicable deductions (80C, 80D, HRA, etc.)

Step 3: Select Tax Regime

• Choose Old Tax Regime to include deductions.
• Choose New Tax Regime for direct computation.

Step 4: Get Your Tax Calculation

• The calculator will show tax payable under both regimes.
• It will also display the savings difference.
• Based on the comparison, you can decide the best regime for you.

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How to Maximize Tax Savings?

To reduce tax liability, consider the following strategies:

If Choosing the Old Tax Regime:

• Invest in Section 80C (Rs. 1.5 lakh deduction): PPF, EPF, ELSS, Life Insurance, NSC, etc.
• Maximize HRA Benefits: Rent receipts are required.
• Claim Health Insurance (Section 80D): Rs. 25,000 for self, Rs. 50,000 for senior parents.
• Deduct Home Loan Interest (Section 24B): Up to Rs. 2 lakh deduction.

If Choosing the New Tax Regime:

• No tax planning required.
• Enjoy simplified tax slabs with lower rates.
• Ensure total income is below Rs. 12.75 lakh to pay zero tax.

Who Should Choose Which Regime?

Scenario	Recommended Tax Regime
Have high deductions (HRA, 80C, Home Loan, etc.)	Old Tax Regime
No major deductions	New Tax Regime
Salaried employee with rent and loans	Old Tax Regime
Self-employed with minimal expenses	New Tax Regime
Income below Rs. 12.75 lakh	New Tax Regime

Frequently Asked Questions (FAQs)

1. Can I switch between tax regimes every year?

Yes, salaried individuals can change tax regimes every year. However, taxpayers with business income cannot switch annually.

2. What if my income is below Rs. 12.75 lakh?

Under the New Tax Regime, no tax is payable up to Rs. 12.75 lakh due to rebates.

3. Where can I find the CBDT tax calculator?

You can access it on the Income Tax e-filing portal.

4. Does the New Tax Regime allow HRA deductions?

No, the New Tax Regime does not allow HRA or any deductions except the Rs. 75,000 standard deduction.

5. What should I choose if I have a home loan?

If you pay home loan interest, the Old Tax Regime is better because of the Rs. 2 lakh Section 24B deduction.

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