As per the new tax regime, individuals have the option to choose between the existing tax regime and the new tax regime. The new tax regime offers lower tax rates in comparison to the existing tax regime. If you are unsure about how to calculate tax as per new regime, you can use an income tax calculator.
Steps to use the income tax calculator 2024
The income tax calculator 2024 is a simple tool that can help you assess your tax liabilities. Here is a step-by-step guide on how to use the income tax calculator:
Step 1: Go to the income tax India e-filing website or any other reliable tax website.
Step 2: Click on the 'Income Tax Calculator' tab that is available on the website.
Step 3: Enter your annual income for the financial year 2024-25 (AY 2025-26) in the appropriate field.
Step 4: Input your age, gender, and other personal details as required.
Step 5: Select the tax regime as 'New Tax Regime' and input the other necessary details mentioned in the online form.
Step 6: The income tax calculator will automatically generate your tax liabilities under the new tax regime.
Here is an example of how to use the income tax calculator:
Calculate tax as per new regime
Suppose your annual income for FY 2024-25 is Rs. 7,50,000. Below is the illustration of how the income tax calculator will calculate tax under the new tax regime.
- Taxable income = Rs. 7,50,000
- Tax rate = 10%
- Tax liability = Rs. 75,000
Now let us understand how to calculate income tax under the new tax regime:
- Up to 2.5 lakh | 0% (No tax)
- 2.5 lakh to 5 lakh | 5% of income exceeding 2.5 lakh
- 5 lakh to 7.5 lakh | 10% of income exceeding 5 lakh
In the given example since your income is Rs. 7,50,000, we will calculate tax for each slab.
- Tax on Rs. 2.5 lakh @0% = Rs. 0
- Tax on Rs. 2.5 lakh to Rs. 5-lakhs @5% = Rs. 12,500
- Tax on Rs. 5 lakh to Rs. 7.5 lakh @10% = Rs. 25,000
- Total tax liability = Rs. 37,500
It is important to note that the new tax regime does not provide certain exemptions and deductions available in the existing tax regime. For instance, under the new tax regime, you cannot claim exemptions in respect of House Rent Allowance (HRA), Leave Travel Concession (LTC), and standard deduction. However, the new tax regime provides some exemptions and deductions like interest paid on housing loans, contribution to the National Pension Scheme (NPS), and medical insurance premium paid for self, spouse, or dependent children.
In conclusion, using the income tax calculator 2024 can help you determine your tax liabilities accurately and efficiently. Calculating your tax liabilities is important, as it helps you plan your finances better and ensures that you do not incur any penalties for non-payment of taxes. Keep in mind that the new tax regime has its own set of rules and regulations, and it is essential to understand these guidelines before opting for the new tax regime.
