Income Tax Calculator: A Complete Guide to the Old vs. New Regime
Compare your taxes under India’s old and new regimes using our Income Tax Calculator. Understand deductions, slabs, and formulas to plan better.
Income Tax Calculator
1. Income Details
2. HRA Details
3. Deductions & Exemptions
4. Tax Pie Chart
Combined Comparison
Old Regime Net Tax
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New Regime Net Tax
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Old Regime Details
| Gross Income | ₹0.00 |
|---|---|
| Total Deductions | ₹0.00 |
| Taxable Income | ₹0.00 |
New Regime Details
| Gross Income | ₹0.00 |
|---|---|
| Total Deductions | ₹0.00 |
| Taxable Income | ₹0.00 |
Amortization / Tax Details (Current Year)
| Year | Gross Income | Deductions | Taxable Income | Tax (Old) | Tax (New) |
|---|
Tax Saving Suggestions
Suggestions will appear here based on your inputs.
Understanding India’s Income Tax System
Filing income tax can be confusing for many individuals, especially when deciding between the old and new tax regimes. The government now allows taxpayers to choose between these two systems, depending on their deductions, income sources, and preferences.
To make this decision easier, our Professional Income Tax Calculator helps you compare your tax liability under both regimes instantly. It uses accurate formulas based on current tax laws to calculate your gross income, deductions, and total tax payable.
Whether you are a salaried employee, self-employed professional, or freelancer, this tool offers a simple way to estimate how much tax you owe and which regime saves you more money.
What Is an Income Tax Calculator?
An Income Tax Calculator is an online tool designed to compute your annual tax liability based on your income, deductions, and applicable tax rates. Instead of manually calculating your taxes, this calculator automatically applies the right tax slabs, deductions, and cess to give you a clear picture of your finances.
It also helps you compare results between the old and new regimes, so you can make an informed decision when filing your returns.
Benefits of Using an Income Tax Calculator
- Accuracy: Avoid manual errors by letting the calculator apply the correct tax rules and rates.
- Speed: Get instant results for both tax regimes in seconds.
- Comparison: Understand which regime offers more savings.
- Financial Planning: Estimate your take-home income and plan investments wisely.
- Free and Easy: No need for complex spreadsheets or formulas.
Step-by-Step Calculation Process
The Income Tax Calculator uses a few essential formulas to determine your final tax liability. Let’s break them down.
- Gross Total Income
Your Gross Total Income is the sum of all your earnings before deductions. It includes your salary, business income, rental income, and other taxable sources.
Formula:
Gross Total Income = Annual Salary + Other Taxable Income
This is the starting point for all tax calculations.
- Old Regime: Taxable Income Calculation
The Old Tax Regime allows multiple exemptions and deductions, making it beneficial for those who invest in tax-saving instruments or claim house rent allowance (HRA).
Formula:
Taxable Income (Old Regime) = Gross Total Income − (Standard Deduction + 80C + 80D + Other Deductions + HRA Exemption)
Here’s how the HRA Exemption is computed:
- Condition 1: Actual HRA received
- Condition 2: 50% of Basic Salary (for metro cities) or 40% (for non-metro cities)
- Condition 3: Rent paid minus 10% of Basic Salary
Final HRA Exemption = Lowest of (Condition 1, Condition 2, Condition 3)
If you claim deductions under Section 80C (like ELSS, PPF, or Life Insurance) or Section 80D (for health insurance), the Old Regime may reduce your taxable income significantly.
- New Regime: Taxable Income Calculation
The New Tax Regime offers simplicity and lower tax rates but removes most exemptions. It is ideal for taxpayers who prefer a straightforward structure without claiming multiple deductions.
Formula:
Taxable Income (New Regime) = Gross Total Income − Standard Deduction
Here, the standard deduction of ₹50,000 for salaried individuals is already included, but no further exemptions (like HRA or 80C) are allowed.
- Final Tax Payable
After determining your taxable income under both regimes, the calculator applies the respective tax slabs and adds a 4% Health and Education Cess.
It also includes the Section 87A rebate, which makes your tax payable zero if your taxable income is:
- Up to ₹5,00,000 under the Old Regime
- Up to ₹7,00,000 under the New Regime
This ensures fairness for low-income earners across both systems.
Which Tax Regime Should You Choose?
This decision depends on your financial situation and eligible deductions.
Choose the Old Regime if:
- You claim deductions under Sections 80C, 80D, 24(b), or 10(13A)
- You pay rent and claim HRA exemption
- You invest in tax-saving plans like PPF, ELSS, or NPS
Choose the New Regime if:
- You have fewer deductions to claim
- You prefer a simple, lower-rate structure
- You want a hassle-free tax calculation process
The Income Tax Calculator helps you compare the exact tax payable under both regimes side by side, making your choice easy and data-driven.
Tips for Reducing Tax Liability
Even with automated tools, strategic tax planning helps lower your burden.
- Invest in 80C instruments like PPF, ELSS, or National Savings Certificate.
- Pay health insurance premiums (80D).
- Contribute to NPS (80CCD).
- Claim HRA or home loan interest deductions (Section 24).
- Keep all investment proofs handy for filing returns.
Using the Income Tax Calculator regularly ensures you stay aware of your estimated tax outgo and optimize savings accordingly.
Frequently Asked Questions (FAQ)
Q1. What is the difference between the old and new tax regimes?
The old regime allows multiple deductions and exemptions, while the new regime offers lower tax rates with fewer deductions.
Q2. How does the Income Tax Calculator determine my HRA exemption?
It calculates the lowest of three values — actual HRA received, 50% or 40% of basic salary, or rent paid minus 10% of basic salary.
Q3. Can I switch regimes every year?
Yes, salaried taxpayers can choose their regime every financial year before filing their returns.
Q4. Is the standard deduction available in both regimes?
Yes, salaried employees can claim a ₹50,000 standard deduction under both regimes.
Q5. Which regime gives me higher tax savings?
If you have high deductions (HRA, 80C, home loan interest), the old regime may help. If not, the new regime’s lower tax rates could be better.
Q6. Can I use this calculator for FY 2024-25?
Yes, the calculator will be updated as soon as new tax slabs or rules are announced in the Union Budget.
Disclaimer
The Income Tax Calculator provides approximate results for educational and planning purposes. Actual tax liability may vary based on income sources, exemptions, and applicable surcharges. Please consult a certified tax professional or financial advisor for accurate filing and compliance with the latest income tax laws.