Calculators
Salary plus other Income should be atleast Rs. 1,00,000.
Old vs New Income Tax
Leverage the income tax calculator to compare and choose between the tax regimes to determine which works best for you.
The Old vs New Income Tax Calculator compares tax liabilities under both the old and new tax regimes, helping individuals choose the ideal option for their needs.
By entering basic details, you can easily compare the tax amounts payable under both the old and new regimes.
Using our calculator will help you determine the best tax strategy and plan your investments accordingly.
Tax slabs in the old tax regime differ according to age classifications.
What is the major difference between the old vs new income tax?Old tax regime: It offers a variety of deductions and exemptions that can reduce your taxable income and tax liability.
New tax regime: It has lower tax slab rates than the old tax regime, but it does not allow many of the deductions and exemptions available under the old regime.
Which tax regime is more beneficial?The choice between the old and new tax regimes depends on your personal circumstances such as income, investments, and deductions. To determine which tax regime is more beneficial, you need to compare your tax liability under the two regimes. Use the 1 Finance Old vs New Income Tax Calculator to compare both scenarios and see which regime offers you a lower tax liability.
Is it possible to switch between the old and new tax regimes?What is a tax rebate and how does it differ in the old and new regimes?A tax rebate is a form of tax relief provided by the government for individuals with lower incomes. If an individual's income falls below the prescribed limit, the amount of tax payable is reduced accordingly. In other words, the tax liability for such individuals is considered as 0.
For the financial year and , the income limit for tax rebate was ₹5 Lakh in the old and ₹7 Lakh in the new tax regimes.
Why is capital gain not considered by the 1 Finance Old vs New Income Tax Calculator during calculation?Can I use the 1 Finance Old vs New Income Tax Calculator for payment of taxes?Should I input my CTC in the salary input field of the 1 Finance Old vs New Income Tax Calculator?What shall I enter in the deduction or exemption field in the 1 Finance Old vs New Income Tax Calculator?Section 10 (13A) - HRA Exemption
Section 10 (5) - Leave Travel Allowance
Section 80C - Life insurance premium, ELSS, PPF, EPF, etc.
Section 80D - Health insurance premium
Section 80CCD (1B) - Self-Contribution to NPS
Section 80CCD (2) - Employer Contribution to NPS
Section 24 (b) - Interest on self-occupied home
Other Chapter VIA deductions
How does the tax regime impact NRIs under the old and new tax regime?Can a salaried employee change the tax regime selected for tax deductions?The Old vs New Income Tax Calculator is provided for the purpose of awareness and ease of calculation. It is not intended to provide any advice for your specific taxation requirements. For personalised tax-related queries, please consult your tax consultant or qualified financial advisor.
Tax planning varies for individuals based on personal financial requirements. It should be a part of a comprehensive personal financial plan.
The Indian income tax system taxes individual taxpayers based on their income levels. The old regime has been around for many years, while starting from the financial year 2020-21, the approach to levying taxes has undergone significant changes.
Old Tax Regime: Under this system, individuals can reduce their taxable income through various deductions and exemptions. Deductions are available for investments in areas like provident fund, insurance premiums, health insurance and more. Tax rates are relatively higher under this tax regime but choosing this system helps lowering the overall taxable income using many deductions.
New Tax Regime: This system offers lower tax rates but extremely limited deductions and exemptions. The goal of the new system is to simplify taxes and reduce the overall tax burden. Individuals with fewer deductions and those who prefer a simpler tax structure may opt for this regime. People who choose this system won't qualify for many deductions available in the old regime.
That is why it is important to compare the tax payable in the old vs new regime using the 1 Finance Old vs New Income Tax Calculator.
Both the old and new tax regimes have their respective benefits and drawbacks. The old tax system promotes saving habits among taxpayers by offering various deductions and exemptions. In contrast, the new tax system is more beneficial for individuals with lower earnings and fewer investments, as it offers fewer deductions and exemptions, simplifying the tax process and reducing paperwork.
Old Tax Regime: The old tax regime featured a multi-slab structure with higher tax rates, applicable to individuals based on their age for financial year and . Though these are same for these years, they might change in future financial years.
For age upto 59 years
For age between 60-79 years
For age 80 and above 80 years
Surcharge: In addition to the aforementioned tax liabilities, a surcharge is applicable when the taxable income exceeds ₹50 lakh. The surcharge rates under the old regime are as follows:
For instance, on a taxable income of ₹60 lakh, your initial income tax is ₹16,12,500. Since the taxable income exceeds ₹50 lakh, a 10% surcharge (₹1,61,250) will be added to the income tax.
New Tax Regime: The new tax regime aims to simplify the structure and reduce the overall tax burden on individuals. The tax slabs for the new regime are as follows:
For Financial Year
Surcharge: Surcharge rate was reduced in the new regime for the financial year 2023-24. The updated rates are as follows:
For instance, on a taxable income of ₹60 lakh, your initial income tax is ₹15,00,000. Since the taxable income exceeds ₹50 lakh, a 10% surcharge (₹1,50,000) will be added to the income tax.
For Financial Year
Surcharge: Surcharge rate was reduced in the new regime for the financial year . The updated rates are as follows:
Lower-Income Group: Individuals earning lower incomes are less impacted by tax rates under both the old and new regimes, thanks to tax rebates for those earning up to ₹5 lakh under the old regime and up to ₹7 lakh under the new regime.
Middle-Income Group: For individuals in the middle-income bracket who invest in tax-saving products, their taxable income could be lower in the old tax system. However, if they don't have any exemptions or deductions, they might still save on taxes due to the lower tax slab rates in the new system compared to the old one.
High-Income Group: Individuals with high incomes are subject to a steady 30% tax rate under both regimes. Nevertheless, the absence of certain deductions and exemptions in the new regime could make the old regime more advantageous for those looking to maximise tax reductions.
Marginal relief is a provision in income tax that addresses situations where the surcharge on income tax significantly exceeds the increase in income. This mechanism ensures a more balanced and proportionate taxation structure.
Let's break down the concept with an example:
Initial Scenario:
Income: ₹50 Lakh
Income Tax Payable: ₹13,12,500
With Increase of ₹50,000 in Income:
New Income: ₹50.50 Lakh
New Tax Payable: ₹14,60,250
(Income Tax: ₹13,27,500 + Surcharge: ₹1,32,750)
Difference Payable without Marginal Relief:
Increase in Tax: ₹1,47,750
(Initial - New Tax Payable: ₹14,60,250 - ₹13,12,500)
Marginal Relief Application:
Marginal Relief Provided: ₹97,750 (Increase in Tax: ₹1,47,750 - Increase in Income: ₹50,000)
Revised Surcharge: ₹35,000
(Original Surcharge: ₹1,37,250 - Marginal Relief: ₹97,750)
In summary, marginal relief is a mechanism to prevent the total tax payable, including surcharge, from increasing too much when there is a relatively small increase in income. It aims to make the taxation more proportionate to the actual increase in income.
Under the new tax regime, taxpayers have access to certain specific deductions. Here’s a list of the allowable deductions:
Employer contributions to the National Pension System (NPS) account under section 80CCD(2).
Deduction for interest paid on housing loans for a rented-out property under section 24(b).
Interest paid on the housing loan is deductible from the rental income, reducing taxable income.
Deduction for gratuity received in a lifetime, capped at ₹20 lakh for non-government employees.
Tax exemption for monetary benefits in voluntary retirement, up to ₹5 lakh.
Tax benefit of ₹3 lakh for leave encashment on retirement.
Section 10(6): Remuneration received as an official of an embassy, high commission, etc.
Section 10(7): Allowances or perquisites paid or allowed as such outside India by the government to a citizen of India for rendering service outside India
Section 10(10): Death-cum-retirement gratuity received
Section 10(10A): Commuted value of pension received
Section 10(10AA): Leave encashment on Retirement
Section 10(10B) - Compensation received at the time of his retrenchment
Section 10(10C): Amount received/receivable on voluntary retirement or termination of service
Section 10(10CC): Tax paid by employer on non-monetary perquisite
Section 10(14)(i): Certain allowances received by employees referred in sub-clauses (a) to (c) of sub-rule (1) in Rule 2BB
Section 10(14)(ii): Transport allowance granted to certain physically handicapped assessee
EIC: Exempt income received by a judge covered under the payment of salaries to Supreme Court/High Court judges Act/Rules
80CCD(2)
80CCH(2)
80JJAA
Taxpayers, including individuals or Hindu Undivided Families (HUFs), can choose between the old and new tax regimes depending on their financial circumstances and income sources. This choice can be made on a yearly basis or as a one-time option, primarily based on the source of income during the financial year.
For income involving business or professional activities: If an individual or HUF earns income from a business or profession and opts for the new tax rates in a specific financial year, these rates will apply in subsequent years. However, taxpayers in this category can switch back to the old tax regime once in their lifetime, provided their circumstances change. This one-time switch-back option remains available unless the taxpayer no longer earns any income from a business or profession.
For income excluding business or professional activities: Individuals or Hindu Undivided Families (HUFs) without income from business or profession can select their preferred tax regime annually. For salaried individuals, employers are responsible for deducting taxes based on the chosen regime. Employees should inform their employers about their tax regime preference at the start of the financial year to ensure accurate Tax Deducted at Source (TDS) deductions. This helps avoid discrepancies between the Form 16 data provided by the employer and the information needed for filing Income Tax Returns (ITR).
Additionally, taxpayers can adjust their choice of tax regime at the time of filing their personal tax return.
Simplify the Tax System: The new tax regime aimed to simplify the intricate Indian tax system by eliminating complexities, including numerous deductions and rebates.
Reduce Tax Compliance Burden: Streamlining the tax structure was geared towards easing the compliance burden on taxpayers, simplifying calculations and the filing of ITRs.
Lower Overall Tax Burden: Lowering tax rates across income slabs was a core objective, reducing the overall tax burden on individual taxpayers.
Promote Tax Transparency: The new regime sought to enhance transparency by eliminating certain exemptions and deductions prone to misuse or tax avoidance.
Lower Tax Rates: The new regime introduced lower tax rates, reducing tax liabilities and providing more disposable income for savings and investments.
Easier Compliance: Reduced complexity in the tax system made compliance more straightforward, enabling taxpayers to calculate their tax liability with greater ease.
Annual Choice: Taxpayers gained the flexibility to choose between the old and new regimes annually, enabling adjustments in tax planning based on changing financial circumstances.
The tax calculation on capital gains under both the old and new tax regimes does not typically differ significantly. Only short-term capital gains (except those from equities or equity-oriented funds) are taxed at the applicable slab rates, which might vary depending on whether the old or new regime is chosen. Additionally, Chapter VIA deductions (such as those under Section 80C, 80D, etc.) can be applied to reduce capital gains below the exemption threshold of ₹2.5 lakh, potentially minimising or eliminating the tax liability on capital gains. However, this benefit primarily affects those whose capital gains are their only income exceeding ₹2.5 lakh.
Under the new tax regime, losses from house property cannot be set off against income from other categories such as salary, business or professional income, other income, or capital gains. However, it is permissible to set off a loss from one house property against the gain from another within the same category (intra-head set-off).
Other set-off rules remain unchanged when comparing the old and new regimes. Regarding the carry forward of losses, the only restriction in the new regime is that depreciation related to business income cannot be carried forward. There are no other significant changes to the carry forward rules between the old and new regimes.