Income Tax Calculator Online Old vs New: Filing income taxes can feel lengthy and exhausting, particularly for first-timers. Plus, the decision between the old and new regimes can add complexity. What’s the solution? Well, to streamline the tax filing process, the income tax department offers an online tax calculator.
The Income Tax department unveiled a ‘tax calculator’ in February 2023, designed to assist taxpayers in determining whether the new income tax regime suits them better or if sticking with the old one is preferable.
Also Read: ITR Filing 2024: How To Claim Tax Refund Online, Check Step-by-step Guide To Know Status
The online tax calculator is crafted to offer an estimated tax liability figure, serving as a tool for taxpayers to gauge their owed taxes or potential refund amount.
What Is An Online Tax Calculator?
An online tax calculator, accessible on the internet, enables individuals to approximate their tax obligations by considering factors like income, deductions, and tax credits.
This calculator also aids in selecting the suitable IT regime for you. It offers the ability to compute and contrast your overall tax responsibility under both regimes. Simply provide the necessary details regarding salary and deductions.
Old Tax Regime vs New Tax Regime Calculator
Under the old tax regime, you can avail yourself of numerous deductions and exemptions when calculating tax liability. Conversely, the new regime, introduced in the Union Budget 2020-21, provides concessional rates. Yet, opting for the new tax regime entails forfeiting certain exemptions and deductions available under the existing old tax regime.
However, it’s important to note that the calculator is not always accurate and should be used as a general guide only.
Why Calculating Income Tax Is Important?
Determining your income tax aids in financial planning. Understanding your tax obligation enables you to budget effectively, align expenses, and save accordingly, preventing overspending and debt accumulation.
How To Calculate Income Tax From IT Department’s Tax Calculator?
The tax calculator is currently active on the income tax department’s website.
Tax Calculator: Old Regime Vis-a-vis New Regime: When one logs into the IT department portal (https://incometaxindia.gov.in/pages/tools/income-tax-calculator.aspx), it asks the following information;
- Tax Payer Type
- Male / Female / Senior Citizen / Super Senior Citizen
- Residential Status
- Income other than Salary and Special Rate Income
- Interest on Self Occupied House Property
- Deductions allowed under both regimes i.e. 80CCH(2), 80CCD(2), 80JJAA, family pension deduction under section 57(iia)
- Deductions/exemptions (other than those mentioned above) not eligible in the new tax regime
As soon as you enter the above details, the portal will represent the number under old and new tax regimes.
Taxpayers should be aware that the IT department has emphasised the disclaimer stating that the calculator is solely intended to provide the public with convenient access to fundamental tax calculations and does not claim to provide accurate tax calculations in every situation.
It is advised that for filing of returns, the exact calculation may be made as per the provisions contained in the relevant Acts, Rules etc..
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