Do NRIs use different slab rates? Can NRIs opt for the New Regime?
No, NRIs use the same New Regime slab rates as residents for Indian-source salary income. However, NRIs cannot claim rebate under Section 87A, which is exclusively available to Resident Individuals.
NRIs are taxed on Indian-source income only at progressive slab rates (0-2.5L 0%, 2.5-5L 5%, 5-10L 20%, 10L+ 30%), plus applicable surcharge and 4% cess.
To opt for the New Regime, NRIs can use Form 10-IEA (Intimation of Election for the New Regime) and submit it to the Income Tax Department. This allows them to benefit from lower tax rates, though the rebate under Section 87A remains unavailable to them. Without opting in writing, NRIs default to the Old Regime tax calculation.
Is the ₹1 crore income tax calculation correct?
Yes, for a Resident Individual with ₹1 crore (₹10,000,000) gross annual income under the New Regime:
Gross Income: ₹10,00,00,000
Standard Deduction: ₹75,000
Taxable Income: ₹9,99,25,000
Income Tax Breakdown (New Regime Slabs):
• ₹0–₹4L @ 0% = ₹0
• ₹4L–₹8L @ 5% = ₹20,000
• ₹8L–₹12L @ 10% = ₹40,000
• ₹12L–₹16L @ 15% = ₹60,000
• ₹16L–₹20L @ 20% = ₹80,000
• ₹20L–₹24L @ 25% = ₹100,000
• Above ₹24L @ 30% = ₹2,95,25,000 (₹9,99,25,000 – ₹24L × 30%)
Base Tax = ₹2,95,57,500
Surcharge (₹1Cr–₹2Cr @ 15% on tax): ₹44,33,625
Cess (4% on tax + surcharge): ₹13,59,645
Total Tax: ₹3,53,30,985
Net In-Hand: ₹6,46,69,015
This is the accurate tax calculation under FY 2025–26 New Regime.
What is TDS and how does it work?
TDS (Tax Deducted at Source) is income tax that your employer automatically deducts from your salary every month and remits to the government. Instead of paying your entire annual tax at year-end, TDS allows you to pay gradually throughout the year.
Your employer calculates TDS using a formula that considers your monthly salary, expected annual salary, and projected tax liability. The TDS amount is mentioned separately on each salary slip. You can view cumulative TDS on your Form 16 (issued by your employer by June).
At financial year-end, when you file your Income Tax Return, your actual tax liability is calculated based on your full annual income, deductions, and applicable tax slabs. If TDS paid during the year exceeds your actual liability, you get a refund. If it's less, you pay the balance. TDS is just an advance payment, not your final tax.
How do I determine my residency status for tax purposes?
Your residency status for a financial year is determined by your physical presence in India, not by your citizenship or current place of residence.
You're classified as Resident if any one of the following conditions is met:
• You stayed in India for 182 days or more during the financial year (April to March), OR
• You stayed in India for 60 days or more in the current financial year and 365 days or more in the preceding 4 financial years.
If neither of the above conditions is satisfied, you're classified as Non-Resident (NRI) for that financial year.
Residency status is extremely important because it directly impacts how your income is taxed.
Residents are taxed using progressive income tax slabs, while NRIs are taxed on Indian-source income only using the same progressive slabs as residents below 60 years (0-2.5L 0%, 2.5-5L 5%, 5-10L 20%, 10L+ 30%), and rebate under Section 87A is not available to NRIs.
Even a small difference in the number of days stayed in India can change your residency status and significantly affect your final tax liability. Always verify your day count carefully before calculating tax.
What is the standard deduction for salaried employees in FY 2025–26?
The standard deduction is a benefit exclusively available to salaried employees in India. It's a fixed deduction from your gross salary that reduces your taxable income automatically. No conditions, no documentation, no proof required.
FY 2025–26 (AY 2026–27) Standard Deduction — UNIFIED FOR BOTH REGIMES:
• New Regime: ₹75,000
• Old Regime: ₹75,000
Budget 2025 maintains different standard deductions across regimes: New Regime ₹75,000, Old Regime ₹50,000. This simplifies tax planning and provides different benefits to salaried employees based on regime choice.
Example: If your gross salary is ₹40 lakhs:
• Under New Regime: Taxable income = ₹40L - ₹75K = ₹39.25L (no other deductions allowed)
• Under Old Regime: Taxable income = ₹40L - ₹75K - Chapter VI-A deductions (if any)
Additional Benefit for Old Regime: Unlike New Regime, Old Regime allows Chapter VI-A deductions (Section 80C up to ₹1.5L, Section 80D for medical insurance, Section 80G for donations) in addition to the standard deduction.
This is perhaps the single most important benefit for salaried employees, yet many overlook it and calculate tax on their full salary. Always ensure the ₹75,000 standard deduction is applied first before calculating tax.
What's the difference between Old Regime and New Regime for salary income?
Old Tax Regime allows deductions under Chapter VI-A (Sections 80C, 80D, 80G, etc.) but uses higher tax slabs. New Tax Regime has lower tax slabs but doesn't allow deductions. Both regimes include the ₹75,000 standard deduction.
Old Regime Tax Slabs (Residents, Below 60) — After ₹75,000 standard deduction:
- Up to ₹2.5L: 0%
- ₹2.5L–₹5L: 5%
- ₹5L–₹10L: 20%
- Above ₹10L: 30%
New Regime Tax Slabs (FY 2025–26 / AY 2026–27) [Section 115BAC(1A)] — After ₹75,000 standard deduction:
- Up to ₹4L: 0%
- ₹4L–₹8L: 5%
- ₹8L–₹12L: 10%
- ₹12L–₹16L: 15%
- ₹16L–₹20L: 20%
- ₹20L–₹24L: 25%
- Above ₹24L: 30%
Key Differences:
• Standard Deduction: New = ₹75,000 | Old = ₹50,000 (regime-specific)
• Chapter VI-A Deductions: Old allows (80C, 80D, 80G); New doesn't
• Rebate u/s 87A: New full rebate ≤₹12L income (tax=₹0); Old max ₹12,500 ≤₹5L income
• Age-based benefits: Only in Old Regime (Senior citizens: ₹3L exemption; Super seniors: ₹5L exemption)
Choose Old Regime if you have significant deductions (insurance, investments, donations) or age-based benefits. Choose New Regime if minimal deductions but want lower tax rates and simpler calculation.
Always calculate both regimes and choose the one resulting in lower tax for your specific situation.
Can Non-Resident Indians (NRIs) use this calculator?
Yes, absolutely. NRIs earning Indian-source salary can use this calculator. Simply select 'Non-Resident' as your status and choose your preferred tax regime (New or Old), then enter your annual salary earned in India.
NRI Tax Regime Options:
Old Regime (Default):
NRIs are taxed at progressive slab rates (0-2.5L at 0%, 2.5-5L at 5%, 5-10L at 20%, 10L+ at 30%), plus applicable surcharge and cess. This is the default taxation method.
New Regime (Section 115BAC - Optional):
NRIs can opt for the New Regime using Form 10-IEA and use lower slab rates (0-4L at 0%, 4-8L at 5%, 8-12L at 10%, 12-16L at 15%, 16-20L at 20%, 20-24L at 25%, 24L+ at 30%), which typically results in lower tax.
Important:This calculator covers only Indian-source salary income. If you earn salary outside India (from a foreign employer), that income is taxed in the country where it's earned, not under Indian tax rules. This calculator won't apply to foreign-source income.
NRI Specifics:
- Tax Regimes: Old Regime (default) or New Regime (optional)
- No rebate u/s 87A available regardless of regime or income level
- Standard Deduction: Applicable (₹75,000 for New Regime | ₹50,000 for Old Regime)
- Surcharge: Applied per income slabs (capped at 25% for New Regime)
- Cess: 4% on (tax + surcharge)
- No Chapter VI-A deductions allowed
For NRIs with complex income sources, consult a tax professional to ensure proper compliance.
How do senior citizens benefit from tax calculations?
Residents aged 60-79 (senior citizens) and 80+ (super seniors) get special tax benefits in the Old Regime:
Senior Citizens (60-79):
- Exemption limit increases from ₹2.5L to ₹3L (Old Regime)
- Tax slab thresholds increase accordingly
- Rebate u/s 87A available up to higher income limit
Super Seniors (80+):
- Exemption limit increases from ₹2.5L to ₹5L (Old Regime)
- Even more favorable tax slab structure
- Full rebate u/s 87A if income within threshold
These benefits are available only in the Old Regime. If you're a senior citizen, always calculate both regimes and compare. Often, Old Regime results in lower tax due to these age-based benefits.
New Regime (2025-26) also offers some benefits but doesn't differentiate by age as significantly.
If you're 60 or above, ensure you select your correct age group in the calculator to receive these senior citizen benefits.
What happens if I get a tax refund? When will I receive it?
If your TDS (and advance tax if any) exceeds your final calculated tax liability, you're entitled to a refund.
Example: If your annual salary is ₹25L, your TDS deducted is ₹3L, but your actual tax liability after the ₹75,000 standard deduction is ₹2.5L, you're owed a ₹50,000 refund.
To claim your refund:
1. File your Income Tax Return (ITR-1 for salaried income) on the official Income Tax website (incometax.gov.in)
2. Provide your Form 16 (issued by your employer) as supporting document
3. File within the due date (July 31st of the following financial year for most individuals)
Refund Timeline:
- Refund is typically processed within 3-6 weeks after your return is filed and processed
- You can track refund status on the IT website using your PAN
Important: Refund doesn't happen automatically. You must file your ITR to claim it. Many employees miss refunds simply because they don't file their return. Don't leave your refund unclaimed.
What is surcharge and how does it affect my tax?
Surcharge is additional tax levied on individuals with very high income. It's calculated as a percentage of your income tax (not as a separate tax on income).
Surcharge Slabs for Residents (FY 2025-26):
- Income up to ₹50 lakh: 0% surcharge
- ₹50 lakh to ₹1 crore: 10% surcharge on tax
- ₹1 crore to ₹2 crore: 15% surcharge on tax
- ₹2 crore to ₹5 crore: 25% surcharge on tax
- Above ₹5 crore: 37% surcharge on tax
Example: If your income is ₹75 lakh and your calculated income tax is ₹10 lakh, surcharge would be ₹10 lakh × 10% = ₹1 lakh. This surcharge is added to your income tax liability.
NRIs are subject to the same surcharge slabs as individuals. Under the New Tax Regime, surcharge is capped at 25%.
Surcharge under New Tax Regime is capped at 25% — meaning even if the slab rate exceeds 25%, the effective surcharge won't go beyond 25% of income tax.
After surcharge is calculated, an additional 4% Health & Education Cess is applied on (tax + surcharge).
If you're a high-income earner, surcharge and cess can significantly increase your total tax liability. Account for these when planning your finances.
Is my salary information completely safe with this calculator?
Completely safe and secure. This calculator does NOT store, save, log, or transmit your financial information to any server. All calculations happen entirely within your web browser on your device.
Your salary amount, TDS, personal details, and all financial information:
- Stay on your device only
- Are never sent to our servers or any external server
- Are permanently deleted when you close the browser tab
- Cannot be accessed by anyone else
Privacy Features:
- No account creation required
- No login or registration
- No cookies or tracking
- No cookies or analytics related to your calculations
- No data collection whatsoever
- Completely anonymous usage
This browser-based calculation method ensures your sensitive financial information remains completely private. Use this calculator with complete confidence knowing your financial privacy is protected.
What deductions are available in Old Regime?
Old Tax Regime allows deductions under Chapter VI-A of the Income Tax Act:
Section 80C (₹1.5 lakh cap):
- Life insurance premiums
- Provident Fund (PF) contributions
- Employees' Pension Scheme (EPS) contributions
- Equity Linked Savings Scheme (ELSS) mutual funds
- Fixed Deposits (some banks)
- Sukanya Samriddhi Scheme
- Public Provident Fund (PPF)
- Home loan principal repayment
- Tuition fees for children
Section 80D:
- Medical insurance premiums for you and family
- Medical expenses of senior citizens (if no insurance)
- Preventive health check-up (capped at ₹5,000)
Section 80G:
- Donations to approved charitable organizations
- Not all donations qualify; refer to Section 80G(5)
Section 80E:
- Education loan interest (on loans for higher education)
Section 80TTA:
- Interest on savings accounts (capped at ₹10,000)
These deductions reduce your taxable income, resulting in lower tax liability in the Old Regime. New Regime offers no such deductions.
If you have significant deduction capacity, Old Regime may be more beneficial than New Regime despite higher slab rates.
Can I switch tax regimes every year?
Yes, you can switch between Old Regime and New Regime every financial year. However, once you choose for a particular financial year while filing ITR, you must stick with that regime for the entire year.
Strategy Tips:
- Analyze both regimes each year based on your current deduction capacity
- If you have significant deductions (Section 80C investments, medical insurance, donations), Old Regime may benefit more
- If you have minimal deductions, New Regime's lower slabs might be better
- Use calculators like this one to run both scenarios and compare
- The regime that results in lower final tax is the one you should choose and file under
Default: New Regime is the default for most taxpayers from FY 2023-24 onwards, but you can opt back to Old Regime if it's beneficial.
Plan your deductions based on which regime you'll choose, as some deductions (Section 80C) only apply in Old Regime.
