Income Tax Dept Portal Launches Tax Calculator To Help Compare Savings Under New And Old Tax Regimes

The tax calculator on the IT portal will help an assessee decide if the new income tax regime announced in the Budget 2023 is good for him/her or if the old one is better

In a bid to help taxpayers decide between the new and existing income tax regimes, the Income tax department on Monday released a 'tax calculator' on its portal.

The tax calculator will help an assessee decide if the new income tax regime announced in the Budget 2023 is good for him/her or if the old one is better, reported news agency PTI. The tax calculator has gone 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.

What’s an income tax calculator?

It is an online tool that will aid an individual taxpayer in calculating taxes based on Union Budget 2023-24 announcement. Individuals who come under the taxable income bracket are liable to pay a specific portion of their net annual income as tax.

Finance Minister Nirmala Sitharaman, who announced the Budget for the financial year beginning April 1, 2023, 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 Budget 2023, taxpayers opting for the new regime will get a rebate if their income does not exceed Rs 7 lakh per annum.

Apart from this, the finance minister in the Budget 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 ensure 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.