How to Calculate Income Tax 2025?
Understanding how to calculate your income tax for the year 2025 is crucial for financial planning. The government updates tax slabs and deductions annually, and being aware of the latest changes helps in accurate tax estimation.
Understanding Tax Slabs for 2025
The income tax system operates in a slab structure, where different portions of income are taxed at different rates. Here are the expected tax slabs for 2025:
- Income up to ₹2,50,000 – No tax
- ₹2,50,001 – ₹5,00,000 – 5%
- ₹5,00,001 – ₹10,00,000 – 20%
- Above ₹10,00,000 – 30%
Steps to Calculate Income Tax
Follow these steps to compute your income tax:
- Determine your total annual income from all sources.
- Subtract applicable deductions (e.g., 80C, 80D, HRA exemptions).
- Apply the respective tax slab rates to calculate the tax amount.
- Deduct any tax rebates or reliefs applicable.
- Calculate final payable tax after adjusting for advance tax and TDS.
Frequently Asked Questions (FAQs)
The basic exemption limit remains ₹2,50,000 for individuals below 60 years.
Yes, the government may introduce new deductions under various sections like 80C and 80D.
By investing in tax-saving schemes like PPF, NPS, and ELSS funds.
Late filing may attract penalties of ₹5,000 or more depending on the delay.
Yes, e-filing is available through the official Income Tax Department portal.
The expected deadline is July 31, 2025.
Yes, employers and banks deduct TDS as per applicable tax rates.
Yes, refunds can be claimed while filing your income tax return.
Freelancers pay tax based on their annual income and allowable deductions.
PAN card, Form 16, bank statements, and investment proofs.