How Much Income Tax Refund Will I Get for FY 2025-26?

The single most common question we get during ITR filing season: “How much income tax refund will I actually get?” The answer isn’t a fixed number — it’s a formula. This guide shows you the formula, walks through five real salary scenarios with concrete refund numbers, and points you at the fastest way to get an exact answer.

The formula in one line

Refund = TDS already paid − Final tax liability for FY 2025-26.

That’s it. If your employer (and banks, clients, tenants) deducted more tax at source than you actually owe, the excess comes back to you as a refund after you file your ITR.

What “final tax liability” means

1. Take your gross annual income.
2. Subtract the standard deduction (₹75,000 New regime / ₹50,000 Old regime).
3. Subtract Chapter VI-A deductions you can claim (80C, 80D, 24(b), HRA, etc. — mostly Old regime).
4. Apply the FY 2025-26 slabs (New or Old based on regime).
5. Subtract the Section 87A rebate if eligible (up to ₹60,000 New / ₹12,500 Old).
6. Apply marginal relief at every cliff (87A, surcharge tiers).
7. Add surcharge if total income exceeds ₹50L.
8. Add 4% Health & Education Cess.
9. That figure is your final tax liability.

Want this computed for you? Use the no-upload refund calculator — enter gross salary + TDS deducted, get the result in 5 seconds.

Five real-world refund scenarios (FY 2025-26)

These are the most common patterns we see. All numbers are calculated using FY 2025-26 / AY 2026-27 rules. Your exact refund depends on details like HRA mix, basic salary, age, and prior employment.

Scenario 1: ₹8 lakh salary, no investments, New regime

• Gross salary: ₹8,00,000
• Standard deduction (New): ₹75,000 → taxable ₹7,25,000
• Slab tax: ₹15,000 (5% on ₹3L between ₹4-7L slab plus stub)
• 87A rebate: full (taxable income < ₹12L)
• Final tax: ₹0
• If employer deducted ₹15,000 TDS → Refund: ₹15,000

Scenario 2: ₹15 lakh salary, full 80C + 80D + HRA, Old regime

• Gross salary: ₹15,00,000
• Standard deduction (Old): ₹50,000
• HRA exemption (metro, rent paid ₹3L/yr, basic ₹7.5L): ~₹2,25,000
• 80C: ₹1,50,000 (EPF + PPF + ELSS)
• 80D: ₹25,000 (self + spouse)
• Taxable income: ₹10,50,000
• Slab tax: ₹1,42,500
• Cess (4%): ₹5,700
• Final tax: ₹1,48,200
• If employer deducted ₹2,10,000 TDS (without knowing about HRA + 80C) → Refund: ₹61,800

The big driver here: the employer typically over-deducts because payroll only sees what you declare in advance, not what you actually invest. RefundWise catches this and tells you exactly what you missed.

Scenario 3: ₹20 lakh salary, switched jobs mid-year, New regime

• Gross salary (employer 1, Apr–Sep): ₹10,00,000
• Gross salary (employer 2, Oct–Mar): ₹10,00,000
• Total gross: ₹20,00,000
• Each employer applied standard deduction independently → over-deducted
• Final taxable: ₹19,25,000 (single standard deduction)
• Slab tax (New regime): ₹2,42,500
• Cess: ₹9,700
• Final tax: ₹2,52,200
• Total TDS deducted by both employers: ₹2,75,000 → Refund: ₹22,800

Scenario 4: ₹12 lakh salary, fresh out of college, New regime

• Gross salary: ₹12,00,000
• Standard deduction (New): ₹75,000 → taxable ₹11,25,000
• Slab tax: ₹62,500
• 87A rebate: full (taxable < ₹12L)
• Final tax: ₹0
• If employer deducted ₹65,000 TDS → Refund: ₹65,000

This is the New regime’s killer feature for FY 2025-26: taxable income up to ₹12L = zero tax thanks to the ₹60K rebate. Many freshers don’t realise their employer over-deducted by a lot.

Scenario 5: ₹6 lakh salary, only bank FD interest, Old regime

• Gross salary: ₹6,00,000
• FD interest: ₹50,000 (TDS deducted by bank: ₹5,000 at 10%)
• Total income: ₹6,50,000
• Standard deduction (Old): ₹50,000 → taxable ₹6,00,000
• Slab tax: ₹32,500
• 87A rebate: partial — kicks in at the cliff
• Cess: ₹1,300
• Final tax: ~₹33,800
• Employer TDS (₹40,000) + bank TDS (₹5,000) = ₹45,000 → Refund: ~₹11,200

What pushes the refund UP

• HRA you forgot to declare to payroll. Most common single source of refund.
• 80C investments made after the “Jan declaration” deadline. Late-year ELSS or PPF top-ups.
• 80D premiums for parents you didn’t submit proof for.
• Section 24(b) home loan interest if you switched to a self-occupied home mid-year.
• NPS Tier-I contributions under 80CCD(1B) — additional ₹50K.
• Job change — both employers gave you a standard deduction.
• Bank TDS on interest that pushes you into refund territory.

What pulls the refund DOWN (or turns it into a tax-due)

• Capital gains your employer didn’t know about.
• Freelance / consulting income with no TDS deducted.
• Rental income above ₹50K/month.
• Multiple FDs across banks (TDS only kicks in above ₹40K per branch).
• Dividend income above ₹5K per company.
• Surcharge cliff hit (income just above ₹50L / ₹1Cr / ₹2Cr).

How to get an exact number

You have two paths:

1. Quick estimate (30 seconds, no upload): use the Income Tax Refund Calculator. Enter gross salary + TDS deducted + (optional) deductions. Old vs New regime side-by-side.
2. Sharper number (2 minutes, with Form 16): upload your Form 16 to the RefundWise calculator. AI extracts every line, applies HRA correctly with metro / non-metro split, catches missed deductions, and builds a step-by-step filing guide for incometax.gov.in.

How to actually receive the refund

1. File ITR (most salaried filers use ITR-1) before 31 July 2026.
2. E-verify within 30 days — Aadhaar OTP is fastest. Until verified, the return is treated as not filed.
3. Pre-validate your bank account on incometax.gov.in (Profile → My Bank Account). Refund credits ONLY to a pre-validated account.
4. CPC processes most simple refunds within 7-30 days. Complex cases (refund > ₹50K, AIS mismatches) can take 3-9 months.
5. If the department delays beyond the prescribed period, you get 0.5% per month interest under Section 244A.

The fastest path forward

If you have your Form 16 handy — upload it to RefundWise. Two minutes; you’ll see the exact refund number, which regime to choose, and a step-by-step filing guide.

If you don’t have Form 16 yet (employer issues by 15 June for FY 2025-26), use the no-upload refund calculator for a quick estimate. Come back with the Form 16 for the sharper number.

Disclaimer: All numbers above are illustrative under FY 2025-26 / AY 2026-27 rules. Your actual refund depends on facts and the regime you elect. RefundWise is not a chartered accountant and does not file ITRs on your behalf.