For all business types — Individual, HUF, Firm, LLP, Company, Co-operative & more.
Surcharge, cess,
MAT/AMT and marginal relief all computed automatically.
Everything Indian businesses need to know about income tax for FY 2025-26.
The New Tax Regime (default) offers lower slab rates but allows very few deductions — no 80C, 80D, HRA, or home loan interest (self-occupied). The basic exemption is ₹4 lakh, and a rebate u/s 87A makes income up to ₹12 lakh effectively tax-free. The Old Tax Regime has higher slab rates (up to 30%), but allows all the classic deductions like 80C (₹1.5L), 80D, HRA, and home loan interest, making it beneficial if you have substantial investments and expenses.
Partnership Firms and LLPs are taxed at a flat 30% on their total taxable income, regardless of the amount. If the income exceeds ₹1 crore, a surcharge of 12% on the tax is added. On top of this, a Health & Education Cess of 4% is applied on the total tax plus surcharge. Additionally, Alternate Minimum Tax (AMT) at 18.5% may apply if normal tax is lower than AMT computed on adjusted total income.
Domestic companies have three main rate options: 25% for companies with turnover ≤ ₹400 crore (in the preceding financial year), 30% for larger companies, 22% for companies opting for the concessional regime under Section 115BAA (no MAT applicable), and 15% for eligible new manufacturing companies set up after October 2019 under Section 115BAB (no MAT, very few deductions allowed). Surcharge at 7% applies if income > ₹1 crore, and 12% if income > ₹10 crore.
Minimum Alternate Tax (MAT) applies to domestic companies and ensures they pay at least 15% tax on their book profits, even if their regular taxable income is lower due to deductions and exemptions. It does not apply to companies opting for Sections 115BAA or 115BAB. Similarly, Alternate Minimum Tax (AMT) at 18.5% applies to other taxpayers (individuals, firms, LLPs, co-operatives) who claim certain profit-linked deductions and their normal tax liability falls below the AMT threshold.
Marginal relief ensures that the additional tax paid due to surcharge does not exceed the additional income that pushed the taxpayer into the surcharge bracket. For example, if your income is ₹50,05,000 (just above the ₹50 lakh threshold), the extra tax from the 10% surcharge should not be more than ₹5,000 (the income exceeding ₹50 lakh). This calculator automatically applies marginal relief wherever applicable.
Yes, for resident individuals under the new tax regime, the rebate u/s 87A has been enhanced to ₹60,000 for FY 2025-26 (AY 2026-27). This effectively makes taxable income up to ₹12 lakh tax-free (after any applicable deductions under the new regime). For salaried individuals, the standard deduction of ₹75,000 further pushes this to ₹12.75 lakh. Note that this rebate is not available for income taxed at special rates (like capital gains u/s 111A, 112A).
Section 115BAB offers a concessional tax rate of 15% to new domestic manufacturing companies incorporated on or after 1st October 2019, that commenced manufacturing before 31st March 2024. The company must not avail of specified exemptions or deductions, must not have been formed by splitting an existing company, and must not use second-hand machinery beyond certain limits. No MAT is applicable under this section.
The Income Tax Act, 2025 was introduced to replace the Income Tax Act, 1961. It comes into effect from 1st April 2026. However, for filing income tax returns for FY 2025-26 (AY 2026-27), the provisions of the Income Tax Act, 1961 still apply. The new Act aims to simplify the tax code while retaining the same tax rates and slab structures, so the tax computation for AY 2026-27 remains unchanged by this transition.