In February 2023, the Income Tax department released a ‘tax calculator’ which aims to help a taxpayer decide if the new income tax regime is good for him/her or if the old one is better.
“Tax Calculator is now live! A dedicated tax calculator to check Old Tax Regime vis-à-vis New Tax Regime for Individual/HUF/AOP/BOI/Artificial Juridical Person(AJP) as per Section 115 BAC can now be accessed on the IT Dept website,” the IT department had said.
What Is An Online Tax Calculator?
An online tax calculator is a tool available on the internet that allows individuals to estimate their tax liability based on various inputs such as income, deductions, and tax credits.
Online Tax Calculator is designed to provide an approximate tax liability amount, and it can be used by taxpayers to get a general idea of how much they owe in taxes or how much of a refund they might receive.
Also Read: Income Tax Return: Know These ITR Basics Before It’s Too Late
However, it’s important to note that these calculators are not always accurate and should be used as a general guide only.
Why Calculating Income Tax Is Important?
Calculating your income tax helps you budget your finances. Knowing how much tax you need to pay allows you to plan your expenses and save money accordingly. This helps you avoid overspending and falling into debt.
How To Calculate Income Tax From IT Department’s Tax Calculator?
The tax calculator is live on the income tax department’s portal.
Tax Calculator: Old Regime Vis-a-vis New Regime: When one logs into the IT department portal (https://incometaxindia.gov.in/pages/tools/income-tax-calculator.aspx), it asks the following information;
-Tax Payer Type
-Male / Female / Senior Citizen / Super Senior Citizen
-Residential Status
-Income other than Salary and Special Rate Income
-Interest on Self Occupied House Property
-Deductions allowed under both regimes i.e. 80CCH(2), 80CCD(2), 80JJAA, family pension deduction under section 57(iia)
-Deductions/exemptions (other than mentioned above) not eligible in new tax regime
As soon as you enter the above details, the portal will represent the number under old and new tax regimes.
Taxpayers must note that the department has also underlined the disclaimer saying that the calculator is only to enable the public to have a quick and an easy access to basic tax calculation and does not purport to give correct tax calculation in all circumstances.
It is advised that for filing of returns the exact calculation may be made as per the provisions contained in the relevant Acts, Rules etc..
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