Income Tax Calculator
Income
Deductions (Old Regime)
Old Regime Tax: ₹0
New Regime Tax: ₹0
Concept:
The Regime Selector helps you decide whether to choose the Old Tax Regime (with deductions) or the New Tax Regime (lower rates, no deductions). It compares the final tax liability under both and recommends the more tax-efficient option.
The Regime Selector helps you decide whether to choose the Old Tax Regime (with deductions) or the New Tax Regime (lower rates, no deductions). It compares the final tax liability under both and recommends the more tax-efficient option.
Formulas
- Old Regime (with deductions):
Taxable_Income_Old = Gross_Income – Deductions
Tax_Liability_Old = Apply_Old_Slab_Rates(Taxable_Income_Old) - New Regime (no deductions):
Taxable_Income_New = Gross_Income
Tax_Liability_New = Apply_New_Slab_Rates(Taxable_Income_New) - Recommendation:
Choose regime with lower Tax_Liability
Step-by-Step Manual Formulas
Step 1. Calculate deductions (if any):
Deductions = (HRA + 80C + 80D + Other eligible deductions)
Step 2. Compute taxable income under Old Regime:
Taxable_Income_Old = Gross_Income – Deductions
Step 3. Compute taxable income under New Regime:
Taxable_Income_New = Gross_Income
Step 4. Apply slab rates:
Tax_Liability_Old = Slab_Calculation(Taxable_Income_Old, Old_Rates)
Tax_Liability_New = Slab_Calculation(Taxable_Income_New, New_Rates)
Step 5. Compare & Recommend:
If Tax_Liability_Old < Tax_Liability_New → Choose Old Regime
Else → Choose New Regime
Theory in Simple Words
- Old Regime: Higher tax rates but allows deductions (HRA, 80C, 80D, etc.). Best if you
use many tax-saving investments. - New Regime: Lower tax slabs but no deductions. Best for people with fewer or no
deductions. - Decision Rule: Calculate tax liability under both regimes → pick the one with the
lower tax payable.