1. Old vs New Tax Regime

The Indian government introduced a new tax regime with lower rates but fewer deductions. Taxpayers can choose between the old regime (with deductions) or new regime (lower rates but no deductions). This calculator helps compare both options.

2. How Tax Calculation Works

The calculator uses the following formula for both regimes:

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

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

3. Key Differences Between Regimes

• Deductions: Old regime allows many deductions, new regime allows only standard deduction
• Tax Slabs: New regime has more slabs with lower rates for middle income
• Rebates: Section 87A rebate available in both regimes (up to ₹12,500)
• Cess: 4% health and education cess applies to both

4. Using the Calculator

Steps: Enter your taxable income, select whether to compare both regimes or just one, and choose your age group. The calculator will show the tax liability under selected regime(s).

5. Frequently Asked Questions (FAQ)

Q1: Which regime is better for me?
A: If you have significant deductions (HRA, investments, etc.), old regime may be better. Otherwise, new regime might save tax.

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

Q3: Are there any exceptions?
A: Business income taxpayers with turnover > ₹50 crore must use old regime. Salaried and professionals can choose.

Q4: What about capital gains?
A: Capital gains tax remains same in both regimes and is calculated separately.

Q5: How is standard deduction treated?
A: In new regime, ₹50,000 standard deduction is deducted from gross salary before tax calculation.