If you are wondering whether you should choose the new or old tax regime for FY 2023-2024 (AY 2024-2025), this free calculator will help you decide. The tax slabs were unchanged in the interim budget presented on 1st Feb 2024.
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You can enter your salary and deduction details to determine which is beneficial. This comparison table prepared by Vinay Vittal gives you a detailed chart of when the new tax regime will be beneficial and when the old regime will be beneficial.
As you may know, the new tax regime is applicable with no tax deductions in 80C, 80D, etc. (see full list above). The new regime may be beneficial under certain circumstances (e.g. when you have a home loan).
According to the new tax regime, if the net taxable income is above Rs. 7 lakhs AND if the income tax is greater than taxable income minus seven lakhs, then the tax to be paid is = taxable income minus seven lakhs.
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So in the above example, the tax before cess is Rs. 25,500, but taxable income minus seven lakhs is only Rs. 5000. So the tax to be paid before cess is the lower of two or Rs. 5000. With cess, the total tax is Rs. 5,200. This is known as the “second relief under section 87A” The first relief is explained here: Why salary up to seven lakhs will be tax-free from 1st April 2023
This benefit applies to a net taxable income of Rs. 7.27 lakhs. After that, taxable income minus seven lakhs will become greater than the tax before cess, so the latter will be used.
New Tax Regime vs Old Tax Regime
This is the screenshot of the input page where the user can modify the black cells.
Note: A standard deviation of Rs. 52,500 is applicable in the new tax regime for salaried taxpayers.
A tax rebate is applicable on income up to Rs. 5 Lakhs in the old regime and up to 7 lakhs in the new regime from 1st April 2023. This has not been included.
Latest (after Budget amendment March 2023): Old tax regime vs new tax regime (up to March 31st, 2023) vs new tax regime (from 1st April 2023) calculator. (please let me know if there are any bugs).
Update: Reader Balasubrahmanyan has modified the old tax regime vs the new tax regime tool “to include a few deductions, especially employer contribution to NPS.
Also, sections to calculate surcharge and marginal relief are added”.
Use this only if your income is higher than 50L: Old tax regime vs new tax regime (up to March 31st, 2023) vs new tax regime (from 1st April 2023) calculator (please let me know if there are any bugs).