Income Tax Calculator

🧾 Income Tax Calculator: Estimate Your Tax Liability Under Old and New Regimes

What is Income Tax?

Income tax is a direct tax levied by the Government of India on the income earned by individuals, businesses, and other entities. For salaried employees, understanding how much tax they owe annually is crucial for financial planning, investment decisions, and compliance.

🧮 Tax Regimes in India

India currently offers two tax regimes:

✅ Old Tax Regime

• Allows various deductions and exemptions (e.g., 80C, HRA, LTA, etc.)
• Slabs:
  • Up to ₹2.5 lakh: Nil
  • ₹2.5 lakh – ₹5 lakh: 5%
  • ₹5 lakh – ₹10 lakh: 20%
  • Above ₹10 lakh: 30%

✅ New Tax Regime (2023 onwards)

• Lower tax rates but no deductions/exemptions
• Slabs:
  • Up to ₹3 lakh: Nil
  • ₹3 lakh – ₹6 lakh: 5%
  • ₹6 lakh – ₹9 lakh: 10%
  • ₹9 lakh – ₹12 lakh: 15%
  • ₹12 lakh – ₹15 lakh: 20%
  • Above ₹15 lakh: 30%

🧰 How to Use the Income Tax Calculator

This calculator helps you estimate your annual tax liability under both regimes based on your taxable income.

Steps:

1. Enter your annual taxable income (after deductions if using the old regime).
2. Click on “Calculate Tax”.
3. The calculator will display:
   • Estimated tax under the Old Regime
   • Estimated tax under the New Regime

📊 Example Calculation

If your taxable income is ₹8,00,000:

• Old Regime:
  • ₹2.5L – ₹5L → ₹12,500
  • ₹5L – ₹8L → ₹60,000
  • Total Tax = ₹72,500
• New Regime:
  • ₹3L – ₹6L → ₹15,000
  • ₹6L – ₹8L → ₹20,000
  • Total Tax = ₹35,000

🎯 Benefits of Using the Calculator

• Compare tax liability under both regimes
• Make informed decisions about which regime to opt for
• Plan investments and deductions accordingly
• Useful for payroll teams, HR, and financial advisors

⚠️ Important Notes

• The calculator assumes basic slab rates and does not include cess (4%) or surcharge.
• For accurate results under the old regime, deduct eligible exemptions before entering income.
• The new regime is beneficial for those with fewer deductions.

📝 Conclusion

The Income Tax Calculator is a powerful tool for employees to estimate their annual tax liability and choose the most beneficial tax regime. Whether you’re planning investments or filing returns, this calculator simplifies the process and helps you stay financially informed.