1. What is the Old and New Tax Regime?

The Indian government introduced a new tax regime with lower rates but fewer deductions/exemptions. Taxpayers can choose between the old regime (with deductions) or new regime (lower rates but no deductions).

2. How Does the Calculator Work?

The calculator uses the tax slab rates for both regimes:

Old Regime: Higher rates but allows deductions (80C, 80D, HRA, etc.)

New Regime: Lower rates but no deductions (except standard deduction of ₹50,000 for salaried)

3. Key Differences Between Regimes

• Old regime has higher tax rates but more deductions
• New regime has lower rates but fewer deductions
• Salaried individuals get ₹50,000 standard deduction in new regime
• Senior citizens have higher exemption limits in old regime

4. Using the Calculator

Steps:

1. Enter your total taxable income (after considering deductions for old regime)
2. Select your age group
3. Choose to compare both regimes or calculate for one specific regime
4. View results showing tax liability under each regime

5. Frequently Asked Questions (FAQ)

Q1: Which regime is better for me?
A: It depends on your income level and available deductions. Generally, if your deductions exceed ₹2-3 lakhs, old regime may be better.

Q2: Can I switch regimes every year?
A: Yes, you can choose a different regime each financial year as per your situation.

Q3: Are there any exceptions to regime choice?
A: Businesses with income from profession cannot opt for new regime. Salaried and business income (non-professional) can choose.

Q4: What is the last date to choose a regime?
A: You can declare your choice at the time of filing ITR, but TDS will be deducted as per employer's assumption.

Q5: Is the standard deduction available in both regimes?
A: Yes, but only ₹50,000 in new regime (₹50,000 in old regime for salaried).