Old vs New Tax Regime: IT department's new tax calculator will tell which tax regime will be beneficial

Income Tax Calculator: The Income Tax Department has made the new tax calculator live on its website. With this, taxpayers can calculate their tax liability under old and new tax regime.

Income Tax Calculator: The Income Tax Department has made the new tax calculator live on its website. With this, taxpayers can calculate their tax liability under old and new tax regime. The tax calculator will be applicable on both new and old tax regime. The Income Tax Department has given this information by tweeting.

The IT department said in a tweet, Tax Calculator is now live. Dedicated tax calculator for Individual/HUF/AOP/BOI/Artificial Juridical Person(AJP) to check new tax regime vis-à-vis old tax regime as per section 115BAC can now be accessed on the IT department website.

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This will help taxpayers to assess which tax regime will result in lower tax liability. To access the tax calculator, one has to go to the official website of Income Tax (https://incometaxindia.gov.in/) and click on the link.

Tax Calculator

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Let us tell you that the Finance Bill has introduced a new tax regime, which was introduced in April 2020 as a default regime under section 115BAC. However, one can still opt for the old tax regime. Under the new tax regime, a lower rate of tax is applicable, but no tax exemption is available in the new regime.

Exemption limit in new tax regime Rs 7 lakh

In the new tax regime, income up to Rs 7 lakh is tax free. When the income exceeds Rs 7 lakh, the tax rate on income between Rs 3 lakh and Rs 6 lakh will be 5% under the new tax slab. Then the tax rate will increase by 5% for every ₹ 3 lakh increase in income.

The tax rate for income between Rs 6 and 9 lakh is 10%, while the tax rate is 15% for income between ₹ 9 and 12 lakh and 20% for income between ₹ 12 and 15 lakh. A maximum rate of 30% is applicable for taxpayers with higher income.