ITR Filing 2025: Tax calculator will save taxpayer’s time and money, know how it works
ITR filing 2025: Before filing ITR, the tax calculator makes it easier to choose the right tax system by analyzing the income, tax slab and exemptions. This makes the tax liability clear and reduces the chances of refund or default.
ITR Filing 2025: If you are preparing to file Income Tax Return (ITR), then using a tax calculator before filing the return can make your tax planning much easier. This tool available on the Income Tax Department website helps you decide whether the old tax system will be better for you or the new one, as well as how much your tax liability is going to be.
Where to find the tax calculator
After logging in to the Income Tax Department portal, go to the “Tax Tools” section. There are two calculators available here: one is the general tax calculator and the other is the Old vs New Tax Regime calculator. Using these tools, you can know how much your tax liability will be and how much benefit you will get in which system.
How to use the tax calculator
After clicking on the tax calculator, some important information has to be filled, such as assessment year (2026-27), category of taxpayer (such as individual, HUF, company etc.), age category (below 60 years, 60-80 or above 80) and residential status. After this, enter your taxable income, and the calculator will automatically show the total amount by adding your tax liability, surcharge and cess.
It is important to pay attention to these things
- In FY 2024-25, there is no tax on income up to ₹ 5 lakh under section 87A in the old tax system.
- In the new tax system, this exemption limit is ₹ 7 lakh.
- In Budget 2025, the exemption limit in the new tax system has been increased to ₹ 12 lakh.
- The tax calculator also adds surcharge and 4% health + education cess.
- The total tax liability is displayed on the last screen.
Old or new tax system: Which is better?
The second option of the tax calculator helps you compare whether the old tax system is beneficial for you or the new one. The new tax system may have lower tax slabs, but you cannot avail tax exemption on any investment or expenditure.
On the other hand, the old system has higher tax rates but one gets the benefit of deductions in sections like HRA, 80C, 80D. Taxpayers should decide which system is better for them based on their income and investment profile.
Correct calculation will not delay returns
Using a tax calculator before filing ITR will not only make your calculations correct, but will also protect you from risks like delayed refunds or tax defaults. This tool is especially important for taxpayers who want to claim investments, HRA or other deductions throughout the year.
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