# Income tax calculator

> Calculate income tax for India FY 2025-26 (new vs old regime), US federal 2025 and UK 2025-26, with take-home pay and marginal and effective rates.

Interactive version: https://www.calcopenly.com/finance/income-tax-calculator
Subject: Finance calculators

Income tax is charged in slabs, or brackets: each rate applies only to the part of taxable income inside its band, and the pieces are added up. Taxable income is gross income minus deductions, such as the standard deduction in India and the US or the personal allowance in the UK. India then applies the section 87A rebate, any surcharge and a 4% health and education cess; the US uses the IRS Tax Table below 100,000 dollars of taxable income; the UK result can include employee National Insurance.

The default, a salary of ₹15,00,000 under India's new regime for FY 2025-26, leaves ₹14,25,000 taxable after the ₹75,000 standard deduction. Bracket tax is ₹93,750 and tax payable with cess is ₹97,500, an effective rate of 6.5%; the old regime with ₹1,50,000 of deductions would cost ₹2,10,600.

Figures are for resident individuals with ordinary income. US figures are federal tax for 2025 before credits; UK figures use the rates for England, Wales and Northern Ireland, whose bands are unchanged for 2026-27. State taxes, Scottish rates and capital gains are not included.

## Inputs

- **Tax system** (options: India, FY 2025-26, United States federal, 2025, United Kingdom 2025-26 (England, Wales, Northern Ireland))
- **Gross annual income**: In rupees, before the standard deduction.
- **Regime** (options: New regime, Old regime)
- **Salary or pension income**: Applies the standard deduction: ₹75,000 under the new regime, ₹50,000 under the old.
- **Deductions claimed under the old regime**: 80C, 80D, HRA exemption, home-loan interest and similar. The new regime ignores them.
- **Age**: Changes the old-regime exemption limit only. (options: Below 60, 60 to 79, 80 or over)
- **Gross annual income**: In dollars: wages, interest and other ordinary income, before the standard deduction.
- **Filing status** (options: Single, Married filing jointly)
- **Itemized deductions**: The larger of this and the standard deduction is used.
- **Gross annual income**: In pounds, employment income before tax.
- **Include employee National Insurance (Class 1)**

## Results

- Income tax payable — main result
- National Insurance
- Income after tax
- Taxable income
- Tax from the brackets
- Section 87A rebate or relief
- Surcharge
- Health and education cess
- Effective rate
- Marginal rate
- Tax under the new regime
- Tax under the old regime
- Lower-tax regime

## Formula

$$
\text{Tax} = \sum_k \text{rate}_k \times \max\!\big(0,\ \min(T, U_k) - U_{k-1}\big),\qquad T = \text{gross} - \text{deductions}
$$

## Worked examples

### India new regime, ₹16 lakh total income

- Tax system: India, FY 2025-26
- Gross annual income: 1,600,000 INR
- Regime: New regime
- Salary or pension income: no
- Deductions claimed under the old regime: 150,000 INR
- **Tax from the brackets: 120,000.00 INR**
- **Income tax payable: 124,800.00 INR**
- **Marginal rate: 20.8%**
- Checked against: Budget 2025-26 speech, Annexure to Part B: tax at proposed rates on ₹16L = 1,20,000; plus 4% cess = 1,24,800; the next rupee falls in the 20% slab, 20% × 1.04 = 20.8% (Python decimal model)

### India new regime, ₹12 lakh — full 87A rebate

- Tax system: India, FY 2025-26
- Gross annual income: 1,200,000 INR
- Regime: New regime
- Salary or pension income: no
- Deductions claimed under the old regime: 150,000 INR
- **Tax from the brackets: 60,000.00 INR**
- **Section 87A rebate or relief: 60,000.00 INR**
- **Income tax payable: 0.00 INR**
- Checked against: Budget 2025-26 speech, Annexure to Part B: ₹12L → tax 60,000, rebate benefit 60,000, tax after rebate 0

### India new regime, salaried ₹12.75 lakh

- Tax system: India, FY 2025-26
- Gross annual income: 1,275,000 INR
- Regime: New regime
- Salary or pension income: yes
- Deductions claimed under the old regime: 150,000 INR
- **Taxable income: 1,200,000.00 INR**
- **Income tax payable: 0.00 INR**
- Checked against: Budget 2025-26 speech para 156: no tax up to ₹12.75 lakh for salaried taxpayers after the ₹75,000 standard deduction

### India new regime, ₹12.1 lakh — 87A marginal relief (edge)

- Tax system: India, FY 2025-26
- Gross annual income: 1,210,000 INR
- Regime: New regime
- Salary or pension income: no
- Deductions claimed under the old regime: 150,000 INR
- **Tax from the brackets: 61,500.00 INR**
- **Section 87A rebate or relief: 51,500.00 INR**
- **Income tax payable: 10,400.00 INR**
- **Marginal rate: 104%**
- Checked against: Finance Bill 2025 s. 87A clause (b): tax capped at income above ₹12L = 10,000; + 4% cess = 10,400 (Python decimal model)

### India new regime, ₹50.5 lakh — surcharge marginal relief

- Tax system: India, FY 2025-26
- Gross annual income: 5,050,000 INR
- Regime: New regime
- Salary or pension income: no
- Deductions claimed under the old regime: 150,000 INR
- **Tax from the brackets: 1,095,000.00 INR**
- **Surcharge: 35,000.00 INR**
- **Income tax payable: 1,175,200.00 INR**
- Checked against: First Schedule Part III relief: tax + surcharge ≤ 10,80,000 (Budget annexure tax at ₹50L) + 50,000 → surcharge 35,000; + 4% cess (Python decimal model)

### India old vs new, salaried ₹15 lakh with ₹1.5 lakh deductions

- Tax system: India, FY 2025-26
- Gross annual income: 1,500,000 INR
- Regime: Old regime
- Salary or pension income: yes
- Deductions claimed under the old regime: 150,000 INR
- Age: Below 60
- **Taxable income: 1,300,000.00 INR**
- **Income tax payable: 210,600.00 INR**
- **Tax under the new regime: 97,500.00 INR**
- **Tax under the old regime: 210,600.00 INR**
- **Lower-tax regime: New regime**
- Checked against: Old: 12,500 + 1,00,000 + 30% × 3,00,000 = 2,02,500 + 4% cess; new: 14.25L taxable → 93,750 + 4% cess (Python decimal model)

## Questions

### How much income tax is due on ₹12 lakh under the new regime?

None for FY 2025-26. The section 87A rebate of up to ₹60,000 cancels the tax on taxable income up to ₹12,00,000, and the ₹75,000 standard deduction lifts the tax-free salary to ₹12,75,000. Just above ₹12 lakh of taxable income, marginal relief caps the tax at the income above ₹12 lakh, so ₹12,10,000 of non-salary income pays ₹10,000 plus 4% cess, ₹10,400.

### Which is better, the new or the old tax regime?

The new regime, unless your old-regime deductions are large. For FY 2025-26, a salary of ₹15 lakh with ₹1.5 lakh of deductions pays ₹97,500 under the new regime and ₹2,10,600 under the old. At that salary the old regime matches the new one only with ₹5,43,750 of deductions (80C, 80D, HRA exemption, home-loan interest and similar). Enter your own figures to compare both.

### What are the US federal income tax brackets for 2025?

For a single filer: 10% up to $11,925 of taxable income, 12% to $48,475, 22% to $103,350, 24% to $197,300, 32% to $250,525, 35% to $626,350 and 37% above. The standard deduction is $15,750 single and $31,500 married filing jointly (One Big Beautiful Bill Act). For 2026 the deduction rises to $16,100 and $32,200, and the 37% rate starts above $640,600 for single filers.

### How does the UK personal allowance taper work?

The £12,570 personal allowance falls by £1 for every £2 of income above £100,000 and is zero at £125,140 (GOV.UK, 2025-26 and 2026-27). Losing the allowance adds 20% to the 40% rate, so income between £100,000 and £125,140 is taxed at 60%, or 62% with 2% employee National Insurance. On £110,000 the allowance is £7,570 and income tax is £33,432.

### What is the difference between marginal and effective tax rates?

The marginal rate is the tax on the next unit of income; the effective rate is total tax divided by gross income. On the default ₹15 lakh salary the marginal rate is 15.6% (the 15% slab plus 4% cess) but the effective rate is 6.5%. A US single filer earning $85,000 in 2025 pays $10,155, an effective 11.95%, while the next dollar is taxed at 22%.

### How accurate is the income tax calculator?

Accuracy depends on your inputs and the method's assumptions. Decimal arithmetic uses 50 significant digits, but estimates, numerical methods and source data can be less precise; the displayed rounding does not remove those limits. It is checked against 15 worked examples whose answers come from independent sources; for example, “India new regime, ₹16 lakh total income” is checked against Budget 2025-26 speech, Annexure to Part B: tax at proposed rates on ₹16L = 1,20,000; plus 4% cess = 1,24,800; the next rupee falls in the 20% slab, 20% × 1.04 = 20.8% (Python decimal model).

### Where does the method come from?

Finance Bill 2025 (India): s. 87A (clause 20), s. 115BAC (clause 24), First Schedule Part III; Budget 2025-26 speech, Annexure to Part B: tax at new slab rates; Income Tax Department: salaried individuals for AY 2026-27 (updated 9 July 2026); IRS: Instructions for Form 1040 (2025), Tax Table and Tax Computation Worksheet; IRS: Federal income tax rates and brackets; IRS: One Big Beautiful Bill provisions — 2025 standard deduction; GOV.UK: Rates and thresholds for employers 2025 to 2026; GOV.UK: Income Tax rates, previous tax years; GOV.UK: Income Tax if you earn over £100,000.

## Sources

- [Finance Bill 2025 (India): s. 87A (clause 20), s. 115BAC (clause 24), First Schedule Part III](https://www.indiabudget.gov.in/budget2025-26/doc/Finance_Bill.pdf)
- [Budget 2025-26 speech, Annexure to Part B: tax at new slab rates](https://static.pib.gov.in/WriteReadData/specificdocs/documents/2025/feb/doc202521493201.pdf)
- [Income Tax Department: salaried individuals for AY 2026-27 (updated 9 July 2026)](https://www.incometax.gov.in/iec/foportal/help/individual/return-applicable-1)
- [IRS: Instructions for Form 1040 (2025), Tax Table and Tax Computation Worksheet](https://www.irs.gov/pub/irs-pdf/i1040gi.pdf)
- [IRS: Federal income tax rates and brackets](https://www.irs.gov/filing/federal-income-tax-rates-and-brackets)
- [IRS: One Big Beautiful Bill provisions — 2025 standard deduction](https://www.irs.gov/newsroom/one-big-beautiful-bill-provisions-individuals-and-workers)
- [GOV.UK: Rates and thresholds for employers 2025 to 2026](https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2025-to-2026)
- [GOV.UK: Income Tax rates, previous tax years](https://www.gov.uk/income-tax-rates/previous-tax-years)
- [GOV.UK: Income Tax if you earn over £100,000](https://www.gov.uk/income-tax-rates/income-over-100000)

_Note: financial information, not professional advice._