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The Old vs New Tax Regime Calculator compares tax liabilities under both the old and new tax regimes, helping individuals choose the ideal option for their needs.
By entering basic details, you can easily compare the tax amounts payable under both the old and new regimes.
Using our calculator will help you determine the best tax strategy and plan your investments accordingly.
Based on your inputs, tax is not payable under both the Old and New Tax Regimes.
| Particulars | Old Regime | New Regime |
|---|---|---|
| Taxable Income | ||
| Income Tax Payable | ||
| Less: Rebate | ||
| Surcharge | ||
| 0 | 0 | |
| Total Tax Payable |
The Indian income tax system taxes individual taxpayers based on their income levels. The old regime has been around for many years, while starting from the financial year 2020-21, the approach to levying taxes has undergone significant changes.
That is why it is important to compare the tax payable in the old vs new regime using the Old vs New Tax Regime Calculator.
Both the old and new tax regimes have their respective benefits and drawbacks. The old tax system promotes saving habits among taxpayers by offering various deductions and exemptions. In contrast, the new tax system is more beneficial for individuals with lower earnings and fewer investments, as it offers fewer deductions and exemptions, simplifying the tax process and reducing paperwork.
For age upto 59 years
| Income Tax Slab | Income Tax Rate |
|---|---|
| ₹0 - ₹2.5 lakh | Nil |
| ₹2.5 lakh - ₹5 lakh | 5% |
| ₹5 lakh - ₹10 lakh | 20% |
| Above ₹10 lakh | 30% |
For age between 60-79 years
| Income Tax Slab | Income Tax Rate |
|---|---|
| ₹0 - ₹3 lakh | Nil |
| ₹3 lakh - ₹5 lakh | 5% |
| ₹5 lakh - ₹10 lakh | 20% |
| Above ₹10 lakh | 30% |
For age 80 and above 80 yearss
| Income Tax Slab | Income Tax Rate |
|---|---|
| ₹0 - ₹5 lakh | Nil |
| ₹5 lakh - ₹10 lakh | 20% |
| Above ₹10 lakh | 30% |
Surcharge: In addition to the aforementioned tax liabilities, a surcharge is applicable when the taxable income exceeds ₹50 lakh. The surcharge rates under the old regime are as follows:
| Income Tax Slab | Income Tax Rate |
|---|---|
| ₹50 lakh - ₹1 cr | 10% |
| ₹1 cr - ₹2 cr | 15% |
| ₹2 cr - ₹5 cr | 25% |
| Above ₹5 cr | 37% |
For instance, on a taxable income of ₹60 lakh, your initial income tax is ₹16,12,500. Since the taxable income exceeds ₹50 lakh, a 10% surcharge (₹1,61,250) will be added to the income tax.
For Financial Year 2024-25
| Income Tax Slab | Income Tax Rate |
|---|---|
| ₹0 - ₹4 lakh | Nil |
| ₹4 lakh - ₹8 lakh | 5% |
| ₹8 lakh - ₹12 lakh | 10% |
| ₹12 lakh - ₹16 lakh | 15% |
| ₹16 lakh - ₹20 lakh | 20% |
| ₹20 lakh - ₹24 lakh | 25% |
| Above ₹24 lakh | 30% |
Surcharge: Surcharge rate in the new regime for the financial year 2024-25, 2025-26 and 2026-27 are as follows:
| Income Tax Slab | Income Tax Rate |
|---|---|
| ₹50 lakh - ₹1 cr | 10% |
| ₹1 cr - ₹2 cr | 15% |
| Above ₹2 cr | 25% |
Lower-Income Group: Individuals earning lower incomes are less impacted by tax rates under both the old and new regimes, thanks to tax rebates for those earning up to ₹5 lakh under the old regime, up to ₹7 lakh under the new regime for the financial year 2024-25 and up to ₹12 lakh under the new regime for the financial year 2025-26 and 2026-27.
Middle-Income Group: For individuals in the middle-income bracket who invest in tax-saving products, their taxable income could be lower in the old tax system. However, if they don't have any exemptions or deductions, they might still save on taxes due to the lower tax slab rates in the new system compared to the old one.
High-Income Group: Individuals with high incomes are subject to a steady 30% tax rate under both regimes. Nevertheless, the absence of certain deductions and exemptions in the new regime could make the old regime more advantageous for those looking to maximise tax reductions.
Marginal relief is a provision in income tax that addresses situations where the surcharge on income tax significantly exceeds the increase in income. This mechanism ensures a more balanced and proportionate taxation structure.
Let's break down the concept with an example:
Income: ₹50 Lakh
Income Tax Payable: ₹13,12,500
New Income: ₹50.50 Lakh
New Tax Payable: ₹14,60,250
(Income Tax: ₹13,27,500 + Surcharge: ₹1,32,750)
Increase in Tax: ₹1,47,750
(Initial - New Tax Payable: ₹14,60,250 - ₹13,12,500)
In summary, marginal relief is a mechanism to prevent the total tax payable, including surcharge, from increasing too much when there is a relatively small increase in income. It aims to make the taxation more proportionate to the actual increase in income.
Under the new tax regime, taxpayers can avail the following deductions and exemptions:
Taxpayers, including individuals or Hindu Undivided Families (HUFs), can choose between the old and new tax regimes depending on their financial circumstances and income sources. This choice can be made on a yearly basis or as a one-time option, primarily based on the source of income during the financial year.
For income involving business or professional activities: If an individual or HUF earns income from a business or profession and opts for the new tax rates in a specific financial year, these rates will apply in subsequent years. However, taxpayers in this category can switch back to the old tax regime once in their lifetime, provided their circumstances change. This one-time switch-back option remains available unless the taxpayer no longer earns any income from a business or profession.
For income excluding business or professional activities: Individuals or Hindu Undivided Families (HUFs) without income from business or profession can select their preferred tax regime annually. For salaried individuals, employers are responsible for deducting taxes based on the chosen regime. Employees should inform their employers about their tax regime preference at the start of the financial year to ensure accurate Tax Deducted at Source (TDS) deductions. This helps avoid discrepancies between the Form 16 data provided by the employer and the information needed for filing Income Tax Returns (ITR).
Additionally, taxpayers can adjust their choice of tax regime at the time of filing their personal tax return.
Under both the old and new tax regimes, the tax treatment of capital gains remains largely similar. Short-term capital gains (except those from equities or equity-oriented mutual funds) are taxed at the applicable slab rates, which may differ based on the chosen regime. In the old regime, taxpayers can use Chapter VIA deductions (such as those under Sections 80C, 80D, etc.) to reduce their taxable income, including capital gains, below the basic exemption limit of ₹2.5 lakh, potentially lowering or eliminating tax liability. For FY 2024-25, 2025-26 and 2026-27, under the new regime, while Chapter VIA deductions are not available, the revised basic exemption limit and tax slabs (as per Budget 2025) could impact the final tax liability on capital gains. However, this primarily benefits individuals whose only taxable income beyond ₹2.5 lakh arises from capital gains.
Under the new tax regime, losses from house property cannot be set off against income from other categories such as salary, business or professional income, other income, or capital gains. However, it is permissible to set off a loss from one house property against the gain from another within the same category (intra-head set-off).
Other set-off rules remain unchanged when comparing the old and new regimes. Regarding the carry forward of losses, the only restriction in the new regime is that depreciation related to business income cannot be carried forward. There are no other significant changes to the carry forward rules between the old and new regimes.
Old tax regime: It offers a variety of deductions and exemptions that can reduce your taxable income and tax liability.
New tax regime: It has lower tax slab rates than the old tax regime, but it does not allow many of the deductions and exemptions available under the old regime.
In general, if you have many tax-saving investments and expenses, the old tax regime is likely to be more beneficial for you. However, if you do not have many tax-saving investments or expenses, the new tax regime may be more beneficial for you.
A tax rebate is a form of tax relief provided by the government for individuals with lower incomes. If an individual's income falls below the prescribed limit, the amount of tax payable is reduced accordingly. In other words, the tax liability for such individuals is considered as 0.
For the financial year 2024-25, the income limit for tax rebate is ₹5 lakh in the old tax regime and ₹7 lakh in the new tax regime. For the financial year 2025-26 and 2026-27, the income limit for tax rebate will be ₹5 lakh in the old tax regime and ₹12 lakh in the new tax regime (other than income taxed at special rates such as capital gains from equity shares, mutual funds, etc.).
Enter any investments, loans, or allowances that you are eligible for tax deduction or exemption under the old tax regime but not under the new tax regime. This includes:
Most of the commonly availed deductions allowed in the old regime are not allowed in the new regime. The only commonly availed deduction allowed in the new regime is NPS contributions by employer under section 80CCD(2). Other than this, exemptions are available on gratuity, commuted pension, leave encashment on leaving the employer, etc. which are not availed in normal course of employment.
The Old vs New Tax Regime Calculator is provided for the purpose of awareness and ease of calculation. It is not intended to provide any advice for your specific taxation requirements. For personalised tax-related queries, please consult your tax consultant or qualified financial advisor.