Income Tax Calculator

Compare Old vs New Tax Regime and find the best option for you.

Income Tax Calculator

Tax
Years

Tax Comparison

About Income Tax in India

India offers two tax regimes: Old (with deductions) and New (lower rates, minimal deductions). You can choose the regime that minimizes your tax liability each financial year.

Key Points:

  • Financial Year: April 1 to March 31
  • Assessment Year: Following year (FY 2023-24 = AY 2024-25)
  • Tax filing deadline: July 31
  • Both regimes have ₹50K standard deduction
  • Section 87A rebate; saves tax up to ₹25K (new) or ₹12.5K (old)

How Tax is Calculated

Tax Calculation Steps:

Step 1: Calculate Gross Total Income

Step 2: Subtract Exemptions (HRA, LTA, etc.)

Step 3: Subtract Deductions (80C, 80D, etc.) - Old Regime only

Step 4: Apply tax slabs to taxable income

Step 5: Add 4% Health & Education Cess

Step 6: Subtract TDS already paid

Standard Deduction (₹50K) automatically reduces taxable income in both regimes.

Key Insights

💰 Tax Saving Limit

Maximum tax saving through deductions: 80C (₹1.5L) + 80D (₹25-50K) + HLI (₹2L) + NPS (₹50K) = ₹4.25L+. Can save ₹1.5-2L in taxes!

📊 Break-Even Point

For ₹10L income, if deductions > ₹2.5L, old regime wins. For ₹15L income, break-even is around ₹3L in deductions.

🎯 HRA Strategy

Paying ₹20K rent can save ₹50-60K in taxes (old regime). Claim HRA even if living with parents by paying them documented rent!

Did You Know?

📝 Form 16 Importance

Form 16 from employer shows TDS deducted. Verify it matches your calculations. Any mismatch can lead to tax notices. Keep 16A (TDS on other incomes) too!

💡 New Regime Popularity

Despite simpler process, only 25% taxpayers chose new regime in FY 2022-23. Most find old regime with deductions more beneficial.

🏥 Health Insurance Savings

80D allows ₹25K deduction (₹50K if senior citizen). ₹20K premium saves ₹6K+ in taxes, effectively reducing premium cost!

Frequently Asked Questions About Income Tax

Old Regime suits you if your deductions (80C, 80D, HRA, etc.) exceed ₹2.5 lakhs. New Regime is better if you have minimal deductions and want simplified tax filing. For income ₹10-15 lakhs with full 80C (₹1.5L) + HRA + others, old regime is typically better. Use this calculator to compare!
Taxable Income = Gross Salary - Exemptions - Deductions. Exemptions include HRA, LTA, Standard Deduction (₹50K in both regimes). Deductions include 80C (₹1.5L), 80D (₹25-50K), home loan interest (₹2L), NPS (₹50K). New regime allows only ₹50K standard deduction, no other deductions.
80C allows ₹1.5 lakh deduction for: PPF, ELSS mutual funds, EPF, Life insurance premiums, NSC, 5-year FD, Home loan principal, Tuition fees, SSY, NPS (Tier 1). Remember: total across all 80C investments cannot exceed ₹1.5 lakhs per year.
Yes, salaried individuals can switch every year. Business/professional income earners can switch only once in lifetime (or till they opt for new regime new regime, whichever is earlier). Choose based on annual deductions - compare both regimes annually using this calculator!
Standard Deduction is a flat deduction from salary income. FY 2023-24 onwards: both regimes allow ₹50,000 standard deduction. This is automatic - you don't need to invest or claim it. Reduces taxable income, thereby reducing tax liability for all salaried individuals.
HRA exemption (old regime only) = Minimum of: (1) Actual HRA received, (2) Rent paid minus 10% of salary, (3) 50% of salary (metro) or 40% (non-metro). Example: ₹20K rent, ₹50K salary in Mumbai = Min(HRA received, ₹15K, ₹25K). Only applicable in old regime.
Choose OLD if: Deductions > ₹2.5L, have home loan, pay high rent (HRA benefit), invest in 80C/80D. Choose NEW if: Deductions < ₹1.5L, want simpler filing, no investments in tax-saving instruments. For ₹15L+ income with minimal deductions, new regime often wins.
Cess (Health & Education Cess) = 4% of calculated tax, applicable to all. Surcharge applies only on high incomes: 10% on ₹50L-₹1Cr, 15% on ₹1-2Cr, 25% on ₹2-5Cr, 37% on ₹5Cr+. Final Tax = (Tax + Surcharge) × 1.04. This calculator includes 4% cess in displayed amounts.