The most accurate tax calculator
This calculator gives you CA-grade tax computation for FY 2025-26 and Tax Year 2026-27. Most online calculators get HRA wrong, miss marginal relief, apply wrong surcharge caps, or don't separate income heads correctly. This one matches the actual Income Tax Act provisions section-by-section.
Why separate income heads matter
The Income Tax Act classifies income under 5 heads (sections 14-59): (1) Salary — gets std deduction, HRA exemption. (2) House Property — gets 30% std deduction on rent, home loan interest. (3) Business/Profession — has presumptive options (44AD/44ADA/44AE) with different deemed-profit percentages. (4) Capital Gains — special rates (STCG 20%, LTCG 12.5%) NOT eligible for rebate 87A. (5) Other Sources — interest, dividend, gifts at slab rates.
Mixing them into one field (like most calculators do) gives wrong tax. For example, ₹10L salary + ₹5L LTCG equity = NOT ₹15L taxable at slab rate; it's ₹10L salary at slab + ₹5L LTCG at special 12.5% rate (with ₹1.25L exemption).
IT Act 2025 transition explained
The new Income Tax Act 2025 came into force on 1 April 2026, replacing the IT Act 1961 (which stood for 65 years with 1000+ amendments). Key facts:
• FY 2025-26 (AY 2026-27): Still under IT Act 1961, even if you file ITR after April 2026. Date of income determines the Act, not date of filing.
• Tax Year 2026-27 onwards: Under IT Act 2025. "Previous Year" and "Assessment Year" concepts merged into single "Tax Year".
• Tax rates UNCHANGED: Budget 2026 confirmed all slabs from Budget 2025 carry forward.
• Section renumbering: 80C is now Section 123, 80D is Section 124, TDS 194C is Section 393(6). Limits and benefits unchanged.
• New forms: Form 16 → Form 130, Form 26AS → Form 168, Form 24Q/26Q → Form 130/131. Multiple TDS forms (26QB/QC/QD/QE) consolidated into single Form 141.
• ITR-3/4 deadline extended to 31 August (was 31 July) for non-audit cases. ITR-1/2 still 31 July.
How marginal relief works
Under new regime, if taxable income is slightly above ₹12 lakh (e.g., ₹12.10L), marginal relief ensures the additional tax doesn't exceed the additional income. Without it, crossing ₹12L by ₹10K would jump tax from zero to ~₹61,500. With marginal relief, tax is capped at ₹10K. Relief applies up to ₹12.75L. This calculator automatically detects and applies marginal relief with an alert banner.
Which regime should I choose?
New regime wins for most. If your total old-regime deductions (80C + 80D + HRA + home loan + 80CCD(1B)) are less than ₹3.75-4.25 lakh, new regime saves more tax. Old regime wins for high-deduction households — typically high HRA + ₹2L home loan + full ₹1.5L 80C + ₹50K NPS + ₹50K health insurance. This calculator computes BOTH and shows you the better option automatically.
FAQs
Q: I'm salaried + have FD interest + rental income. How do I enter?
A: Fill three sections: (1) Salary section — gross salary, (2) Other Sources — FD interest under "FD/RD Interest", (3) House Property — let-out section with rent, municipal tax. Calculator aggregates correctly per IT Act head-wise rules.
Q: I'm a freelance CA earning ₹35L. What to fill?
A: Business/Profession section → §44ADA — Professional → ₹35,00,000. Calculator applies 50% presumptive = ₹17.5L deemed income. If you also have FD interest, fill Other Sources section.
Q: I have salary + run a small shop. How to declare both?
A: Fill Salary section with salary income AND Business/Profession section → §44AD with shop turnover. Both incomes get aggregated. Std deduction applies only to salary (not business).