About this Income Tax calculator
The Income Tax Calculator helps you compare tax liability under both old and new tax regimes for FY 2024-25. With the government offering two distinct tax structures, choosing the right regime can save you ₹20,000-50,000 annually.
The new regime offers lower tax rates but removes most deductions. The old regime has higher rates but allows deductions like 80C (₹1.5L), HRA exemption, home loan interest, and more. Your optimal choice depends on your investments and expenses.
This calculator uses the latest tax slabs, standard deduction, and rebate rules to give you an accurate comparison. It helps you make an informed decision before filing your ITR.
Understanding the two tax regimes
The new tax regime (default from FY 2023-24) offers lower tax rates: 0% up to ₹3L, 5% on ₹3-7L, 10% on ₹7-10L, 15% on ₹10-12L, 20% on ₹12-15L, and 25-30% above that. However, it doesn't allow most deductions except standard deduction of ₹50,000.
The old regime has higher rates: 0% up to ₹2.5L, 5% on ₹2.5-5L, 20% on ₹5-10L, and 30% above ₹10L. But it allows 80C deductions (₹1.5L), HRA exemption, home loan interest (₹2L), medical insurance (₹25K-50K), and more.
For most salaried individuals without significant investments or home loans, the new regime is better. But if you have 80C investments, pay rent, or have a home loan, the old regime often results in lower tax despite higher rates.
Common deductions under old regime
Section 80C allows deductions up to ₹1.5 lakh for EPF, PPF, ELSS mutual funds, life insurance premiums, home loan principal, NSC, and children's tuition fees. This is the most commonly used deduction.
HRA exemption can save significant tax if you pay rent. The exemption is the minimum of: actual HRA received, rent paid minus 10% of salary, or 50% of salary for metro cities (40% for non-metro).
Home loan interest deduction allows up to ₹2 lakh under Section 24(b). Medical insurance premiums qualify for ₹25,000 deduction (₹50,000 if covering parents above 60). NPS contributions get additional ₹50,000 deduction under 80CCD(1B).
How to choose the right regime
Calculate your tax under both regimes using this calculator. Enter your total income and all applicable deductions for the old regime. The calculator will show which regime saves more tax.
Generally, if your total deductions exceed ₹2.5-3 lakhs, the old regime is better. If your deductions are minimal (just EPF and standard deduction), the new regime usually wins.
Remember, you can switch between regimes every year if you have business income. Salaried individuals can also switch, but once you opt for new regime, switching back to old has restrictions. Consult a CA for complex cases.
Tax planning strategies
Start tax planning at the beginning of the financial year, not in March. This gives you time to make optimal investment decisions rather than rushing into unsuitable products just for tax saving.
If you're in the old regime, maximize 80C with a mix of EPF (automatic), ELSS (equity exposure), and PPF (safe returns). Don't buy insurance just for tax saving - buy adequate term insurance and invest the rest.
Consider NPS for additional ₹50,000 deduction. If you have parents, get them health insurance for ₹50,000 deduction. If you're paying rent, ensure you claim HRA exemption properly with rent receipts and landlord PAN.