Income tax calculator: The new tax regime became a default tax regime in FY 2023, which means taxpayers are meant to pay income tax based on the new regime unless they opt out of it. They would do so only if they were told that the old tax regime would lead to lower taxes.
However, to be able to make that decision, they first need to compute income tax under both the regimes — new and old — for a year and then choose the one that leads to a lower tax outgo for that year. Before proceeding further, let us first understand the tax exemptions which are allowed under the old regime but not in the new tax regime.
Tax exemptions
There are a range of income tax exemptions which are available only in the old tax regime and not in the new tax regime. These include those given under 80C, 80D, CCD(1B) and 80D and 80G.
Although there are a few exemptions that are given under the new tax regime also but they are few and far between.
So, if you are a taxpayer and confused about whether the new tax regime is better for you or the old tax regime, you can use the tax calculator.
To access the income tax calculator where you can compare the tax component calculated under both regimes, you can click this link:
Income Tax Calculator: This is how you can use the tax calculator
1. First, there is a column for the assessment year, which is pre-filled to 2025-26.
2. Then, you can choose the category of taxpayer (individual/ HUF/AOP), age (less than 60, more than 60, or between 60 and 80), and residential status (resident/ non-resident).
3. Now you need to enter your income under separate heads: income other than salary and special rate income, interest on self-occupied house property. These columns will change based on which category you chose in step 2.
4. Now, there are columns for deductions allowed under the new tax regime, followed by a similar column under the old tax regime.
5. Thereafter, you will see two different columns—each for the old and new regime—wherein one has to enter income under various heads: income from self-occupied house property, income other than salary and special rate income, gross total income, computation of tax liability, and income tax after relief under section 87A.
6. Finally, this calculator will show the calculation of tax liability and show tax savings in the new regime.
Read all personal finance stories here.