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New Vs Old Tax Regime Calculator Calculator
Come April 2023, taxpayers will have to make the choice between the new tax regime and the old one as the Budget made it clear that the new tax regime will be considered the default regime.. The Fisdom New vs Old Regime Calculator can be used to determine the tax liability in each scenario and make an effective decision. Here is all you need to know.
What are the New Tax Regime and the latest tax slabs under the new tax regime?
The new tax regime under section 115BAC of the Income Tax Act, 1961 was first introduced by the Finance Minister in Budget 2020. Under this new tax regime, taxpayers can get the benefit of reduced tax liability but the prime disadvantage is no option to get any deduction or exemption under Income Tax Act, 1961.
In the recent Budget 2023, the Finance Minister increased the basic exemption limit and restructured the income slabs for taxation under the new tax regime to remove the complexities and ensure more taxpayers opt for it in the coming years. The revised tax slabs under the new tax regime are given below.
Up to Rs. 3,00,000
Rs. 3,00,001 – Rs. 6,00,000
Rs. 6,00,001 – Rs. 9,00,000
Rs. 9,00,001 – Rs. 12,00,000
Rs. 12,00,001 – Rs. 15,00,000
Above Rs. 15,00,000
What deductions are allowed and not allowed under the new tax regime?
There has been much confusion relating to what is deductible or exempted under the new tax regime and what is not. Given here is a comprehensive list of the same.
Deductions and exemptions allowed under New Tax Regime
Deductions and exemptions not allowed under New Tax Regime
Standard deduction of Rs. 50,000 under Section 16
Professional Tax and entertainment allowance on salaries
Deduction under section 57(iia) on family pension
Leave Travel Allowance
Deduction under section 80CCH(2) for the amount paid to Agniveer Corpus Fund.
House Rent Allowance
Interest on home loan for let-out property
Children Education Allowance
Transport allowances for specially-abled person
Deductions under Chapter VIA
Perquisites for official persons
Other Special Allowance under section 10(14)
Conveyance allowance received as part of the employment by employees in order to meet the conveyance expenditure incurred
Interest in home loan for self-occupied property under section 24
Gifts up to Rs. 5,000
Donation to political party
Deduction for employers contribution to NPS under section 80CCD(2)
Employee contribution to NPS
Exemption on voluntary retirement 10(10C), gratuity u/s 10(10) and Leave encashment u/s 10(10AA)
Deduction under section 80TTA and 80TTB
Daily allowance received to meet the ordinary regular charges or expenditure you incur on account of absence from his regular place of duty.
What is the new vs old tax regime calculator?
From the time it was launched, there has been huge confusion about whether the new tax regime is beneficial to the taxpayers or the old one. To ease this confusion, taxpayers can use the New vs Old Regime Tax calculator that is available on the Fisdom website which can allow them to calculate the net tax liability in each case. This will help the taxpayers in understanding which tax regime is better depending on their taxable income.
How to use the New vs Old regime tax calculator?
The Fisdom New vs Old Regime Calculator is available under the tab ‘Resources’ on the home page of the website. Users can click on the option ‘Calculators’ under this tab and then on ‘New vs Old Tax Regime’. The steps to use this calculator are given below.
The Fisdom New vs Old Regime has four parts where the taxpayers need to provide the relevant information. The details of the same are given below.
About YourselfThe details required in this section include
- Email Id
- Date of Birth
- The details needed in this section are
- Income from Salary/Profession
- Income from Business / Profession / Freelancing
- Rental Income received
- Interest paid on home loan
Other IncomeThis section requires information about the interest income received by the taxpayer
- FD interest
- Saving A/C interest
- Any other interest income
- Any other income
- This section requires information about any Chapter VIA deductions that the taxpayer is eligible for
- Section 80C
- Section 80D
- Section 80E
- Other Deductions
After providing all the necessary information taxpayers have to select the option ‘Calculate’. Taxpayers will be able to see the net tax liability under the old and new tax regimes for AY 23-24 and AY 24-25 (with and without exemption). This allows them to make an effective decision between the two tax regimes after reviewing the final tax liability and understanding which is most beneficial for their income level.
What are the advantages of using this calculator?
There are multiple advantages to using the Fisdom New vs Old Regime calculator. Some of these are highlighted below.
- Taxpayers can calculate the net tax liability in old as well as new tax regimes without any errors
- Taxpayers can use this calculator for different income levels and understand the tax liability for each level thereby enabling the chance to make optimum eligible investments at the beginning of the financial year.
- This calculator can be used multiple times and is easy to use as well as free of cost.
- Taxpayers can also click on the option ‘File ITR Now’ after the calculation of tax liability under this calculator and avail of the benefit of hassle-free tax filing through Fisdom.
New and old tax regimes are both beneficial to the taxpayers depending on the nature of income and the income level. The Fisdom New vs old regime calculator can be used seamlessly by taxpayers to calculate their tax liability at different income levels and reduce the hassles of calculating tax liability in each case to determine the most optimum option. However, taxpayers should also note that the new tax regime is now the default option available under the Income Tax Act, 1961.
- Are there any restrictions for individuals and HUFs under the revised provisions applicable to the new tax regime?
Individuals and HUFs have the option to choose between the two every fiscal year. Individuals and HUFs having business income also can choose between the two regimes, however, once they choose the new regime, they have the option to go back to the old regime only once in their lifetime, thereafter they cannot come back to the new tax regime.
- What is the biggest advantage of Fisdom’s New vs old regime tax calculator?
The biggest advantage of Fisdom’s New vs old regime tax calculator is that it is easy to use and provides errorfree and seamless calculation of the tax liability under the old and the new tax regime also accounting for the changes as per Budget 2023.
- Can Fisdom’s New vs old regime tax calculator be used multiple times?
Yes, Fisdom’s New vs old regime tax calculator can be sued multiple times to calculate the tax liability under both regimes at different income levels and applicable deductions.
- What is the disadvantage of the new tax regime?
The new tax regime may not be attractive to taxpayers who have already made significant investments that are eligible for deduction or exemption under various sections of the Income Tax Act 1961 as per the old tax regime.