Income Tax calculator to compare old tax regime and new tax regime u/s 115BAC

The Income Tax Department of India has introduced a new tax calculator on its official e-Filing portal (incometax.gov.in) to help taxpayers compare their tax liabilities under the old and new tax regimes.

Key Features of the New Tax Calculator:

1. Comparison of Regimes: The calculator allows users to input their income details, deductions, and exemptions (where applicable) to compare the tax liability under both the old tax regime and the new tax regime. This comparison helps taxpayers determine which regime results in lower tax outgo.
2. Updated for AY 2025-26: The tool reflects the latest tax slabs and rates announced in the Union Budget 2024.
3. Accessibility: The calculator is available on the Income Tax Department’s e-Filing portal free of cost and can be accessed by both registered and unregistered users. It is user-friendly, with options for both basic and advanced calculations:
   • Basic Calculator: Requires minimal inputs like assessment year, taxpayer category, age, residential status, total annual income, and deductions.
   • Advanced Calculator: Allows detailed inputs for various income sources (e.g., salary, house property, business income, capital gains, other sources) and specific deductions (e.g., under Section 80C, 80D, 80CCD, etc., available only in the old regime).
4. Real-Time Updates: The tool is regularly updated to incorporate the latest changes in tax laws, notifications, and budget announcements, ensuring accuracy for AY 2025-26 and beyond.
5. Marginal Relief and Surcharge: It accounts for marginal relief and surcharge calculations for high-income earners (incomes above ₹50 lakh).

Limitations and Considerations:

• The calculator provides estimates and should not be used as the final basis for tax filings. Taxpayers are advised to consult a Chartered Accountant or tax expert for personalized advice, especially if they have complex income sources or deductions.
• The new regime eliminates most deductions (e.g., 80C, 80D, HRA) except for limited ones like the standard deduction and employer NPS contributions, while the old regime allows a broader range of exemptions but has higher tax rates for some slabs.
• The tool is particularly useful for salaried individuals, but businesses and professionals with income from business or profession may need to follow additional procedures (e.g., filing Form 10-IEA to opt out of the new regime).