How to Use the Income Tax Calculator in 2025 (Step-by-Step Guide)

Income tax filing is one of those tasks most individuals want to avoid, mainly because the rules keep changing every year. New slabs, old slabs, deductions allowed, deductions removed, standard deduction increased, rebate extended — it gets confusing. That’s exactly why Toolsuite.in created a simple and intuitive Income Tax Calculator for FY 2025–26, designed for salaried individuals, professionals, and small business owners.

This article walks you through every part of the tool in the simplest way possible. You don’t need tax knowledge or technical understanding. If you can read your salary slip, you can calculate your income tax accurately with this tool.

Let’s explore the interface of Income Tax Calculator step-by-step.

⭐ What This Calculator Can Do

The Toolsuite.in Income Tax Calculator automatically calculates:

• Tax under both New Regime and Old Regime
• Standard deduction (based on regime and salary type)
• Budget 2025 rebate (taxable income up to ₹12,00,000 → ZERO tax)
• Salary income + business income + other income
• House property benefits (interest/loss or rental income)
• Cess and surcharge
• Total tax payable

It eliminates guesswork and ensures 100% accurate results using the latest tax rules applicable for FY 2025–26 (AY 2026–27).

🧭 Step-by-Step Guide to Using the Income Tax Calculator

Below is a detailed, beginner-friendly explanation of every part of the calculator.

Step 1: Choose Your Tax Regime (New or Old)

At the top of the tool, you will see two options:

🔵 New Regime (default option)

⚪ Old Regime

Tax regimes decide how your tax will be calculated.

✔ New Tax Regime

• Lower tax rates
• Very limited deductions
• Standard deduction allowed
• Section 80C, 80D, HRA, home loan interest, etc. are mostly NOT allowed
• Budget 2025 rebate available → If taxable income ≤ ₹12,00,000, total tax becomes ZERO

This regime is simple and suitable for people who do not invest heavily in tax-saving schemes.

✔ Old Tax Regime

• Higher tax rates
• Most deductions available
  • 80C (PF, LIC, ELSS)
  • 80D (medical insurance)
  • 80G (donations)
  • HRA
  • LTA
  • Home loan interest (Section 24)
• Better for people who make regular investments and claim multiple exemptions

Choose the regime you wish to compute tax for.
Most users check the tax for both regimes and pick whichever gives lower tax.

Step 2: Enter Your Gross Salary (Annual)

Next, you will see a field:

Gross Salary (annual ₹)

This is your total yearly salary before any deductions.

Example:
If your annual package is ₹12,00,000, then type:

1200000

Your salary details can be found in:

• Your salary slip
• Form 16 (Part B)
• HR portal

Step 3: Apply Standard Deduction

There is a checkbox:

Salaried — apply standard deduction (regime-specific)

If you are a salaried employee, keep this box ticked.

What happens automatically?

• In the New Regime → Standard deduction = ₹75,000
• In the Old Regime → Standard deduction = as per old rules

You do not need to enter the deduction amount — the calculator does it for you.

If you are NOT salaried, you may uncheck this box.

Step 4: Enter Business / Professional Income

This field is for people who earn income through:

• Freelancing
• Consultancy
• Small business
• Proprietorship
• Part-time work
• Commissions
• Any profession (doctors, CAs, lawyers, tutors, etc.)

Enter your net income (profit) for the year.

Example:
If you earned ₹5 lakh and spent ₹2 lakh on expenses, your net income is:

₹3,00,000 → enter this amount.

If you have no business income, simply enter:

0

Step 5: Enter Other Income (Interest, Dividends, etc.)

This is one of the most important sections because most people forget to include small incomes that are still taxable.

You should enter:

• Bank FD interest
• Savings account interest
• Recurring deposit interest
• Mutual fund dividends
• Side income
• Family pension
• Any other income not included in salary

If you don’t have any such income, enter: 0

Step 6: Enter House Property Details

There is a dropdown named House Property.

Here you select:

• None – no house loan or rental income
• Self-Occupied – if you live in your own house
• Let-Out – if you earn rental income
• Loss from Housing Loan Interest (self-occupied)
• Loss from Housing Loan Interest (let-out property)

How the calculator works:

• If you have home loan interest, the calculator applies rules based on your regime:
  • New Regime: Limited deductions allowed
  • Old Regime: Up to ₹2,00,000 deduction allowed

The tool also adds house property income/loss to your total taxable income.

Step 7: Apply Budget 2025 Rebate

You will see a field:

Apply Budget-2025 rebate (new regime taxable ≤ ₹12,00,000 → NIL)

This is one of the most important updates for FY 2025–26.

What does it mean?

If your taxable income (after standard deduction) under the New Regime is:

₹12,00,000 or less → you pay ZERO tax

The government introduced this to reduce the tax burden for middle-class families.

Keep Yes selected unless you want to see the tax amount without rebate.

Step 8: Click “Calculate Tax”

Once all fields are entered, click the blue button:

Calculate Tax

The tool instantly processes all inputs and gives you a clean, detailed summary.

📊 What the Result Section Shows

The tool shows:

✔ Salary after standard deduction

✔ Business income added

✔ Other income added

✔ Effect of house property

✔ Final taxable income

✔ Tax before cess

✔ Health and education cess (4%)

✔ Surcharge (if income exceeds ₹50 lakh)

✔ Budget 2025 rebate applied or not

✔ Final Tax Payable

The tool gives a very neat, easy-to-read summary so that anyone can understand their tax liability clearly.

📌 Example

Here is a real example exactly like the one shown in the image:

Input:

• Salary: ₹12,00,000
• Standard deduction applied
• No business income
• No other income
• House property: None
• Regime: New
• Rebate: Yes

Output:

• Salary after standard deduction: ₹11,25,000
• Tax as per slab calculated
• Because taxable income ≤ ₹12,00,000 → tax becomes ZERO
• Final tax payable: ₹0

This shows the power of the new rebate benefit.

🎯 Why Our Income Tax Calculator Is So Useful

Here’s why thousands of users love this tool:

• Updated for FY 2025–26
• Very easy to use — no tax background needed
• Works for salaried, freelancers, professionals & business owners
• Shows extremely clear tax breakdown
• Helps in choosing between New vs Old Regime
• Helps in planning salary structure
• Helps understand whether you need to pay tax or are eligible for refund

It removes confusion and allows you to prepare for filing confidently.

❓ Frequently Asked Questions (FAQ)

Final Thoughts

Calculating income tax does not have to be complicated. With the Toolsuite.in Income Tax Calculator for FY 2025–26, anyone — whether salaried, self-employed, or running a small business — can understand their tax liability within seconds. The interface is clean, simple, and designed with beginners in mind.

Whether you want to plan your investments, check if you qualify for the ₹12 lakh rebate, estimate TDS, or prepare for filing, this tool gives you the clarity you need.

Please Try now our income tax calculator: Income Tax Calculator India FY 2025-26 — New vs Old Regime