Income tax department on Monday released a 'tax calculator' which will help an assessee decide if the new income tax regime announced in the Budget is good for him/her or if the old one is better. The tax calculator is live on the income tax department's portal. "Tax Calculator is now live! A dedicated tax calculator to check Old Tax Regime vis-à-vis New Tax Regime for Individual/HUF/AOP/BOI/Artificial Juridical Person(AJP) as per Section 115BAC can now be accessed on the IT Dept website," according to a tweet by the tax department.
An Income-tax calculator is an online tool that helps to evaluate taxes based on a person’s income based on Union Budget 2023-24 announcement. Individuals falling under the taxable income bracket are liable to pay a specific portion of their net annual income as tax.
While announcing the Budget for the financial year beginning April 1, 2023, Finance Minister Nirmala Sitharaman said, "We are also making the new income tax regime as the default tax regime. However, citizens will continue to have the option to avail the benefit of the old tax regime."
As per the announcement, taxpayers opting for the new regime will get a rebate if their income does not exceed Rs 7 lakh per annum.
The finance minister also allowed a standard deduction of Rs 50,000 under the new regime which is already available in the old tax regime. The basic exemption limit has been raised to Rs 3 lakh from Rs 2.5 lakh. A Rs 2.5 lakh basic exemption limit is prescribed in the old tax regime.
The move will lead to a saving of Rs 33,800 for those earning up to Rs 7 lakh annually and opting for the new tax regime. Those with income up to Rs 10 lakh would save Rs 23,400 and Rs 49,400 savings would accrue to those earning up to Rs 15 lakh.