Income Tax Calculator: New tax regime to be fait accompli in Budget 2025? Compute tax under both the regimes here | Mint

Income tax calculator: As we are aware that the new tax regime will become a default regime in FY2023-24, taxpayers are meant to calculate their income tax as per the lower slab rates sans major deductions and exemptions that are no longer allowed in this regime.

Although the new tax regime does not offer most exemptions and deductions given under section 80C, 80 D, 80 G and 80CCD (1), among others, what it offers instead is the lower slab rates.

For instance, if your income is ₹11 lakh per annum, it will be taxed at 15 percent in the new tax regime unlike 30 percent in the old tax regime. Likewise, an income of ₹9 lakh is taxed at 10 percent in the new tax regime unlike 20 percent in the old tax regime. Check the table below for the entire tax slab.

How to use the tax calculator?

It is recommended to use the income tax calculator to assess the exact income tax. First of all, you need to click this link on Income Tax India portal to access the tax calculator.

For financial year 2024-25, the entry of the year is already pre-filled. Now you need to enter ‘individual’ under ‘taxpayer’ and choose the age i.e., whether under 60 or above 60. Now, choose the residential status — whether you are resident or non-resident.

Now, you need to enter the gross salary after deducting the allowances that are exempted under both regimes. These allowances are as follows.

Allowances exempted under both the regimes.

I. Any allowance granted for meeting the cost of travel on tour or transfer.

II. Any allowance, whether, granted on tour or for the period of journey in connection with transfer, to meet the ordinary daily charges incurred by an employee on account of absence from his normal place of duty

III. Any allowance granted for meeting the expenditure incurred on conveyance in the performance of duties of an office or employment of profit if the free conveyance is not provided by the employer.

IV. Transport allowance is granted to an employee, who is blind or deaf and dumb or orthopedically handicapped with a disability of lower extremities, to meet his expenditure for the purpose of commuting between the place of his residence and the place of his duty.

It is noteworthy that the amount deductible from gross salary (except standard deduction) which is not allowed under the new regime includes the following exemptions.

New tax regime: Deductions not allowed

1. Exemption with respect to travel concession or assistance as covered in section 10(5).

2. HRA exemption as covered in section 10(13A)

3. Any other allowance as covered in section 10(14) or section 10(17)

4. Entertainment allowance and professional tax as covered in section 16(ii) and section 16(iii) respectively

Then you need to enter the following entries:

>> Income other than salary and special rate income 

>> Interest on self-occupied house property 

>> Deductions/exemptions allowed under new tax regime 

>> Deductions/ exemptions under old tax regime 

Once these figures are entered, the tax calculator will calculate the income tax liability under both the regimes and reflect the saving in income tax, if any.