How is income tax calculated?

Here is how income tax is calculated: Calculate or ascertain your gross income from your salary, house property, or capital gains. Calculate your net taxable income by subtracting exemptions and deductions, such as deductions on investments and insurance. To compute the tax, calculate eligible gross exemptions and gross income tax for the financial year. Exclude any credits you may be eligible for. You should know about various components of income tax before you calculate your tax. Income tax is calculated on taxable income based on the applicable income tax slab. The easiest way to arrive at an accurate figure is to use the income tax calculator to calculate your income tax. You can use our Income Tax Calculator to calculate tax benefits gained after availing of a Home Loan.

Which income is not taxable in India?

Several types of income are exempt under the Income Tax Act, 1961. These are known as tax-free income sources. Here are a few of these that you should be aware of: Agricultural income Payment received on voluntary retirement or during separation Funds received from government-recognised provident fund Any amount of gratuity received by a government employee Any payment in commutation of pension Receipts from Hindu Undivided Family Share from a partnership firm or LLP Certain sources or receipts earned by NRIs Income and receipts earned by foreigners in India If you are eligible for income tax, use the income tax calculator to determine the income you are liable to pay.

What is the maximum non-taxable income limit in India?

The maximum non-taxable income limit for individuals and Hindu Undivided Families is Rs.4 Lakh and the same for senior citizens. A tax rebate under Section 87A is available for individuals with a total income of Rs.12 Lakh. Super senior citizens above 80 years of age do not have to pay any tax or file returns up to Rs.5 Lakh of annual total income.

What are the details you need for e-Filing your income tax returns?

You need the following details and documents for e-Filing your income tax returns: Details of your Aadhaar Card, PAN Card number, and proof of your current address Details of all the bank accounts under your name for the particular financial year Proof of income such as salary slips and details of income from investments such as interest on the savings bank account, and FDs All the deductions claimed under Section 80 or Chapter VI-A of the Income Tax Act, 1961 Details of tax payments like advance tax payments and TDS For your convenience, keep all the necessary documents ready. Calculate advance tax and use the TDS calculator for income tax calculation.

What are the benefits of filing income tax online?

There are several benefits of filing income tax online. Some of these benefits are listed below: It facilitates electronic tax refunds. It minimises errors. It acts as proof of income and address. It assists you in carrying forward losses. It is easier to avoid the late penalty by filing online. Filing income tax online is much safer and is confidential. You may get insurance and benefit with VISA processing. Filing income tax online is much quicker. You get a swift confirmation receipt and it provides real-time updates. Use the TDS calculator for tax computation as it helps you save the amount which you would have otherwise spent on professionals to file income tax for your assistance.

Why is an Income Tax Calculator important?

The Income Tax Calculator by Bajaj Housing Finance can be used to calculate the amount of funds saved by availing of a Home Loan. You simply need to enter your annual income, the interest amount paid, and the principal amount repaid on the Home Loan to calculate your income tax benefits.

How to calculate advance tax?

Advance tax is payable if you have income sources other than salary. This includes rent, capital gains, lottery winning, and more. To calculate advance tax, apply the income tax slab rate applicable in the financial year. Follow the steps below: Estimate the income from capital gains, professional income, rent, and other income. Add income from salary to the above total to arrive at gross taxable income. Apply the income tax slab applicable to you. Deduct the TDS as per the TDS slab.

How much tax do I pay on Rs.7.5 Lakh?

If your income is between Rs.4 Lakh and Rs.8 Lakh under the new tax regime, you will need to pay 5% of your taxable income.

How much tax do I pay on Rs.10 Lakh?

If your income falls within the range of Rs.8 Lakh to Rs.12 Lakh under the new tax regime, you need to pay 10% of your income as tax.

What is the tax slab for FY 2025-26?

Tax Slab - Rates Up to Rs.4,00,000 - NIL Rs.4,00,000 to Rs.8,00,000 - 5% Rs.8,00,001 to Rs.12,00,000 - 10% Rs.12,00,001 to Rs.16,00,000 - 15% Rs.16,00,001 to Rs.20,00,000 - 20% Rs.20,00,001 to Rs.24,00,000 - 25% Above Rs.24,00,000 - 30% Income Tax Slab for Individuals between 60 and 80 Years of Age Tax Slabs- Rates Rs.3 Lakh - NIL Rs.3 Lakh – Rs.5 Lakh - 5% Rs.5 Lakh - Rs.10 Lakh - 20% Rs.10 Lakh and above - 30% Income Tax Slab for Individuals above 80 Years Tax Slabs - Rates Up to Rs.2.5 Lakh - NIL Rs.2.5 Lakh - Rs.3 Lakh - NIL Rs.3 Lakh - Rs.5 Lakh - NIL Rs.5 Lakh - Rs.10 Lakh - 20% Above Rs.10 Lakh - 30%

Income Tax Calculator FY 2025-26 - Calculate New vs Old Regime

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Home Loan Benefit on Income Tax Calculator (Old Regime)

Financial Year: 2026 - 2027

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Annual Income

Rs.

Interest Paid on Home Loan

Rs.

Principal Repaid on Home Loan

Rs.

Total income tax benefit with a Home Loan Rs. 0.00

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Income tax payable without a Home Loan

Rs. 0.00

Income tax payable with a Home Loan

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What is an Income Tax Calculator?

Individuals and Hindu Undivided Families falling under certain income tax slabs are liable to pay income tax every financial year. For this, you should know how to calculate income tax. While you can do a manual assessment, this may lead to errors. Bajaj Housing Finance brings you a simple digital Income Tax Calculator that you can use with ease.

This online Income Tax Calculator is a simple and convenient tool designed to estimate the approximate tax benefits you can gain through a Home Loan. If you have a Home Loan and wish to calculate the income tax online for Tax Year 2026-27 and AY 2027-28, you can do so by entering only a few details such as your gender, annual income, and the interest paid and principal repaid on the Home Loan.

Our Income Tax Calculator is an easy-to-use online financial tool, which can help you to calculate tax benefits on your income. It displays the tax payable before and after availing of a Home Loan, along with the total tax benefit amount.

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How to Use the Bajaj Housing Finance Income Tax Calculator for Tax Year 2026-27 (AY 2027-28)?

Follow these steps to estimate your Home Loan tax benefits:

Step 1: Select your gender in the calculator.

Step 2: : Enter your annual income details, including your basic salary and income from other sources such as rental income, savings account interest, or fixed deposit interest. The calculator is intended for taxable income above Rs.2,50,000, as income below this threshold may not attract income tax under the applicable tax regime.

Step 3: : Enter the total Home Loan interest paid during the tax year.

Step 4: : Enter the principal amount repaid towards your Home Loan during the tax year.

Based on the information provided, the calculator will instantly display your estimated tax benefit, tax liability before claiming Home Loan deductions, and tax liability after applying the eligible Home Loan tax benefits.

How to Understand Income Tax Slabs?

Income tax slabs determine how your income is taxed in a progressive manner. This means different portions of your income are taxed at different rates, rather than applying a single rate to the entire amount.

Income tax slabs are available under two regimes — the new tax regime and the old tax regime. Under the old tax regime, basic exemption limits differ based on age categories such as individuals below 60 years, senior citizens, and super senior citizens.

Income tax is payable by the following categories if their taxable income exceeds the applicable basic exemption limit:

Individuals
Hindu Undivided Families (HUFs)
Association of Persons (AOPs) and Body of Individuals (BOIs)
Companies
Firms and Limited Liability Partnerships (LLPs)
Local authorities and other artificial juridical persons

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Income Tax Slab Rates Under New and Old Regime for Tax Year 2026-27 (AY 2027-28)

Here is a breakdown of the two tax regimes and their income tax slab rates, as per the latest Union Budget 2025:

New Income Tax Slab Rates Announced in Budget 2025

Net Annual Taxable Income	New Tax Regime (excluding the exemptions and deductions)	Old Tax Regime (including the exemptions and deductions)
Up to Rs.2.5 Lakh	Exempt	Exempt
Rs.2.5 Lakh to Rs.4 Lakh	Exempt	5%
Rs.4 Lakh to Rs.5 Lakh	5%	5%
Rs.5 Lakh to Rs.8 Lakh	5%	20%
Rs.8 Lakh to Rs.10 Lakh	10%	20%
Rs.10 Lakh to Rs.12 Lakh	10%	30%
Rs.12 Lakh to Rs.16 Lakh	15%	30%
Rs.16 Lakh to Rs.20 Lakh	20%	30%
Rs.20 Lakh to Rs.24 Lakh	25%	30%
Above Rs.24 Lakh	30%	30%

Income Tax Slab under the Old Tax Regime for Senior Citizens between 60 and 80 Years of Age

Tax Slabs	Income Tax Rates
Up to Rs.3 Lakh	NIL
Rs.3 Lakh – Rs.5 Lakh	5%
Rs.5 Lakh – Rs.10 Lakh	20%
Above Rs.10 Lakh	30%

How to Calculate Total Income Tax Liability?

While determining the total income tax payable through an online income tax calculator, enter the accurate data about the following in the tax calculator:

Your gross yearly income from profits/salary
Income from investments, rent, and other sources
Tax exemptions if they are applicable
Transport allowance and house rent

Once you fill these out, you will be able to see your total income tax liability. If TDS is automatically deducted from your salary, you can check Form 168, which functions as a TDS calculator.

Simply subtract the TDS from the total income tax liability to get the amount you need to submit online via Challan 280. If you pay more than the total tax liability, the government reimburses the difference within a month of filing your income tax.

In case you file the IT returns after the due date, you will have to pay a penalty under Section 428 and interest under Section 423. The due dates can vary based on your source of income. If you are employed and are earning a salary, your due date for filing income tax returns is July 31 of the subsequent tax year.

Let us take the example of Rajesh, who has an annual income of Rs.18 Lakh and has investments worth Rs.2.5 Lakh. Here is how his income tax liability would be computed under both the old and new tax regimes for the tax year 2026-27:

Particulars	Old Tax Regime	New Tax Regime
Gross Income	Rs.18,00,000	Rs.18,00,000
Deductions under Chapter VIII (e.g. 123, 126, 129, etc.)	Rs.2,50,000	Not Applicable
Standard Deduction	Rs.50,000	Rs.75,000
Net Taxable Income	Rs.15,00,000	Rs.17,25,000

Tax Calculations

Old Tax Regime

Income Slab	Tax Rate	Taxable Amount	Tax Amount
Up to Rs.2.5 Lakh	Nil	Rs.2,50,000	Nil
Rs.2.5 Lakh – Rs.5 Lakh	5%	Rs.2,50,000	Rs.12,500
Rs.5 Lakh – Rs.10 Lakh	20%	Rs.5,00,000	Rs.1,00,000
Rs.10 Lakh – Rs.15 Lakh	30%	Rs.5,00,000	Rs.1,50,000

Based on the above table, the tax liability will be:
Total Tax (before cess) - Rs.2,62,500
Cess (4%) - Rs.10,500
Total Tax Liability - Rs.2,73,000

New Tax Regime

Income Slab	Tax Rate	Taxable Amount	Tax Amount
Up to Rs.4,00,000	Nil	Rs.4,00,000	Rs.0
Rs.4,00,001 – Rs.8,00,000	5%	Rs.4,00,000	Rs.20,000
Rs.8,00,001 – Rs.12,00,000	10%	Rs.4,00,000	Rs.40,000
Rs.12,00,001 – Rs.16,00,000	15%	Rs.4,00,000	Rs.60,000
Rs.16,00,001 – Rs.17,25,000	20%	Rs.1,25,000	Rs.25,000

Based on the above table, the total tax liability will be:
Total Tax (before cess) - Rs.1,45,000
Cess (4%)- Rs.5,800
Total Tax Liability - Rs.1,50,800

An easy way to save on taxes is to make investments. At Bajaj Housing Finance, we help you fulfil your financial and personal goals by offering a housing loan and a Loan Against Property at competitive interest rates.

Exemptions on Total Income Under Different Sections

Deduction on Total Income under Different Sections Applicable in Tax Year 2026-27

Check the exemptions on total income tax:

Section 157

If a taxpayer’s income is below Rs.5 Lakh, the person will be eligible for a tax rebate of up to Rs.12,500 as per the old tax regime. Individuals with a taxable income of up to Rs.12 Lakh can claim a rebate under Section 157, which effectively reduces their income tax liability to zero.
Section 123

The taxpayer is eligible for a rebate of up to Rs.1.5 Lakh for investments made in a tax-saver fixed deposit scheme, National Savings Certificate, Public Provident Fund, Unit-Linked Insurance Plan (ULIP), and equity-linked savings scheme (ELSS).
Section 124(3) & (4)

Taxpayer can seek up to Rs.50,000 additional tax deduction, totalling Rs.2 Lakh for their investment in the National Pension Scheme.
Section 126

A non-senior taxpayer is eligible for a tax exemption of up to Rs.25,000 for medical insurance premium bills. For senior citizens, the maximum limit is Rs.50,000. The maximum deduction one can avail of under this section is Rs.1 Lakh.
Section 133

Donations made to charities are entirely tax-exempt under this section.
Section 129

A 100% tax rebate is applicable on the interest paid for education loans for up to 8 years.
Section 153

Interest income up to Rs.10,000 from savings accounts will be eligible for tax deductions. Senior citizens are eligible to avail tax waivers of up to Rs.50,000 under Section 153.
Section 134

Income spent on paying house rent is tax-exempt. This section is applicable if you have not received HRA benefits from your employer.

*Terms and conditions apply.

Benefits of Income Tax Calculator

Here are the benefits of using our Income Tax Calculator:

The calculator shows how your income tax payable changes when you avail a home loan by comparing the tax without and with a Home Loan. It also displays the total tax benefit amount.
By entering only a few details, such as your annual income, interest paid on the Home Loan, and principal repaid, the tool estimates the tax benefit you can avail from your Home Loan.
Using the calculator eliminates the need for manual tax computation.

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Disclaimer

This calculator is provided for general information purposes only and should not be considered as financial advice. The results obtained from the calculator are estimates based on your inputs and remain subject to change depending on the laws and government guidelines, applicable at the time being. However, Bajaj Housing Finance Limited (‘BHFL’) is under no obligation to update or keep the information current. Users are advised to seek independent legal and professional advice before acting on the basis of the information contained in the Website. Placing reliance on the aforementioned information shall always be sole responsibility and decision of the User and the User shall assume the entire risk of any use made of this information.

In no event shall BHFL or the Bajaj Group, its employees, directors or any of its agents or any other party involved in creating, producing, or delivering this Website shall be liable for any direct, indirect, punitive, incidental, special, consequential damages (including lost revenues or profits, loss of business or loss of data) or any damages whatsoever connected to the User’s reliance on the aforementioned information.

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Frequently asked questions

Yes, under the old tax regime, eligible salaried individuals can claim both the standard deduction and House Rent Allowance (HRA) exemption, subject to the prescribed conditions. Under the new tax regime, HRA exemption is generally not available, while the standard deduction continues to be available.

Section 156 provides a tax rebate to eligible resident individuals, reducing their income tax liability if they meet the prescribed income limit. For tax year 2025–26 (AY 2026–27), under the new tax regime, resident individuals with a taxable income of up to Rs.12 Lakh are eligible for a rebate of up to Rs.60,000 (or the actual tax payable, whichever is lower), effectively reducing the tax liability to nil, subject to the applicable conditions.

Yes, self-employed professionals can use our Income Tax Calculator.