Govt launches tax calculator: Check your income tax outgo under new and old tax regimes
In order to help taxpayers calculate whether the old tax regime or the new tax regime would be beneficial for them, the Income Tax Department has released a tax calculator which is available on the income tax department’s online portal.
The online tax calculator can be used to compare the tax liability under the old and the new tax regime. This can be used by individuals, HUF, AOP, BOI and, Artificial Judiciary Person (AJP) as per section 115BAC.
Although the tax calculator can help one make quick and easy calculations, one should note that it does not claim to provide accurate calculations in all circumstances.
You can check the tax calculator here.
“The above calculator is only to enable public to have a quick and an easy access to basic tax calculation and does not purport to give correct tax calculation in all circumstances. It is advised that for filing of returns the exact calculation may be made as per the provisions contained in the relevant Acts, Rules etc.,” the Income Tax website said.
Proposals made in Budget 2023
Finance Minister Nirmala Sitharaman in Union Budget 2023 proposed a slew of changes in the new tax regime to make it more attractive for taxpayers. The basic exemption limit was increased from Rs 2.5 lakh to 3 lakh. Tax rebate under Section 87A of the Income Tax Act, 1961, was hiked to Rs 7 lakh from Rs 5 lakh.
Moreover, the standard deduction limit of Rs 50,000 has been extended to the new tax regime as well. Under the new tax regime, effectively an individual with an income under Rs 7.5 lakh will not have to pay any tax in FY 2023-24. Additionally, the new tax regime was also made the default tax regime by FM.
Switching from the old tax regime to the new tax regime
As long as a taxpayer has a salaried income and not a company income, a switch can be made between the old and new tax regimes. Taxpayers can choose between the two tax regimes in each financial year.
With the help of the online tax calculator provided by the Income Tax Department, taxpayers can easily calculate their tax liability under both regimes, compare them, reduce their confusion and select the tax regime which is more suitable and beneficial for them. The changes in the new tax regime will be effective from April 1, 2023.
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