Income Tax Calculator (India) – Old vs. New Regime Comparison
Income Tax Calculator (India) – Old vs. New Regime Comparison
Confused between the Old and New tax regimes? You're not alone. Choosing the right one can save you thousands. Our Free Income Tax Calculator for India (AY 2024-25) does the hard work for you. Simply enter your income and deductions to instantly compare your tax liability under both regimes and find out which option is better for you.
Tax Calculator (AY 2024–25)
How to Use the Income Tax Calculator
Find out your tax liability in a few simple steps for the Assessment Year 2024-25 (Financial Year 2023-24):
- Gross Annual Income: Enter your total salary or income before any deductions.
- Total Deductions: Enter the sum of all eligible deductions you plan to claim under the Old Regime (e.g., Section 80C, 80D, HRA, home loan interest).
- Your Age Group: Select your age, as tax slabs differ for senior citizens under the Old Regime.
The calculator will instantly show you the tax payable under both regimes and recommend the better option for you.
Understanding the Old vs. New Tax Regime
From FY 2023-24 (AY 2024-25), the New Tax Regime is the default option. However, taxpayers can still choose to opt for the Old Regime.
Old Tax Regime
This is the traditional system where you can claim a wide range of deductions and exemptions to reduce your taxable income. Key deductions include:
- Section 80C: Up to ₹1.5 lakh for investments like PPF, ELSS, Life Insurance, etc.
- Section 80D: For health insurance premiums.
- HRA Exemption: For rent paid.
- Home Loan Interest: Under Section 24(b).
This regime is beneficial for those who make significant tax-saving investments.
New Tax Regime (Default)
This regime offers lower, more streamlined tax slab rates but requires you to forgo most of the common deductions and exemptions available in the Old Regime. The main benefits are:
- Lower tax rates for many income levels.
- No need to make specific investments just to save tax.
- A Standard Deduction of ₹50,000 is now available in both regimes for salaried individuals.
- Full tax rebate if your taxable income is up to ₹7 lakh.
Frequently Asked Questions (FAQ)
Q1: Which tax regime is better for me?
Answer: It depends entirely on your income and the deductions you are eligible for. If your total deductions are high (typically over ₹2.5 - 3.75 lakh), the Old Regime might be more beneficial. If you have fewer deductions, the New Regime's lower slab rates will likely result in less tax. Use our calculator to get a precise answer.
Q2: What is Assessment Year (AY) and Financial Year (FY)?
Answer: A Financial Year (FY) is the year in which you earn your income (e.g., April 1, 2023, to March 31, 2024). The Assessment Year (AY) is the year immediately following the FY, in which your income is assessed and taxed (e.g., April 1, 2024, to March 31, 2025). This calculator is for income earned in FY 2023-24, which is assessed in AY 2024-25.
Q3: Can I switch between regimes every year?
Answer: Salaried individuals can choose between the Old and New regimes each year. However, individuals with business income can switch only once in their lifetime.