Income Tax Calculator — New vs Old Regime

Income Tax Calculator — Complete Guide (Estimation & Interpretation)

This guide explains how the calculator works, differences between new and old regimes, deductions, house property impacts, and provides practical examples & FAQs.

Introduction

Understanding income tax can be confusing: different regimes, exemptions, deductions and surcharges. This calculator helps estimate tax liability under two primary choices: the New Tax Regime (with concessional slab rates but fewer deductions) and the Old Tax Regime (traditional slabs with deductions like 80C). Below we explain how estimates are computed, what inputs matter, and how to interpret results.

Which Regime to Choose?

The New Regime offers lower slab rates but removes many common deductions — it’s simple and can be beneficial if your deductions are small. The Old Regime allows deductions (80C, 80D, standard deduction etc.) which reduce taxable income; it usually benefits taxpayers who can claim significant deductions. Always compare both regimes (this tool does that) before filing.

Inputs Explained

• Annual Gross Income: Sum of salary, business income, other income before deductions.
• Standard Deduction: Some taxpayers (salaried) get a standard deduction; enter amount here if applicable.
• House Property Income: Net income from house property (can be positive or negative — losses can be set off as per rules).
• Other Deductions: Combined eligible deductions (80C, 80D etc.) — used primarily under Old Regime.

How Tax is Calculated (Simplified)

Calculation steps (simplified): 1) Start with Gross Income. 2) Add or subtract House Property income (loss reduces total). 3) Subtract allowable deductions (standard + other eligible deductions — depending on regime). 4) The result is Taxable Income. 5) Apply slab rates for the selected regime to compute tax. 6) Add health & education cess (usually 4%). 7) Apply rebate (if eligible) or surcharge as per law — this tool includes standard rebate logic where applicable.

New Regime — Slab Summary (Used in Calculator)

For FY 2024–25 (illustrative): • Up to ₹3,00,000 — 0% • ₹3,00,001 to ₹7,00,000 — 5% • ₹7,00,001 to ₹10,00,000 — 10% • ₹10,00,001 to ₹12,00,000 — 15% • ₹12,00,001 to ₹15,00,000 — 20% • Above ₹15,00,000 — 30%

Old Regime — Exemptions & Age Groups

The Old Regime uses conventional slabs and allows deductions. Notably, basic exemption limits change with age: • Below 60 — ₹2,50,000 • 60–80 (senior) — ₹3,00,000 • Above 80 (super senior) — ₹5,00,000 This calculator uses these thresholds when computing under the old regime.

Deduction Breakdown

Deductions (80C, 80D, etc.) reduce taxable income in the old regime. The tool accepts a combined ‘Other Deductions’ field — for accurate assessment, break down items: 80C (max ₹1.5L), 80D (health insurance), 24(b) home loan interest for house property, etc. If you need finer breakdown fields, I can add them.

Practical Example

Example: Gross ₹9,00,000, Standard Deduction ₹50,000, House Income 0, Other Deductions ₹1,50,000. • Old Regime Taxable = 9,00,000 − 50,000 − 1,50,000 = ₹7,00,000. Apply old slabs. • New Regime (no major deductions) Taxable = ₹9,00,000 (apply new slabs). Compare both: sometimes new regime may give lower tax; other times old regime wins.

Limitations & Disclaimer

This calculator is an estimation tool. It does not replace professional advice. Surcharge, complex set-offs, loss carryforwards, and certain rebate rules may not be fully modeled. Always verify with official notifications or your tax advisor before filing returns.

FAQs

Q: Does this tool include cess?

A: Yes — 4% health & education cess is added to computed tax.

Q: Which regime is better?

A: It depends on your deductions. Use the compare box above to see which regime yields lower tax based on your inputs.

Conclusion

Use this calculator for quick, transparent estimates. For filing, always check the latest official slab notifications and consult a tax professional for complex situations.