Income Tax India has provided a Tax Calculator to compare the tax system in the Old Regime with the New Regime, as stated in the Finance Bill of 2023.
Old Regime Vs New Regime Tax Online Calculator 2023-24
According to Finance Minister Nirmala Sitharaman, changes have been made in the income tax slabs under the new tax regime. During the February 1, 2023 announcement, some of the notable changes were an introduction of a standard deduction for salaried individuals and pensioners, an increase in the basic exemption limit to Rs 3 lakh, and a reduction in the highest surcharge rate to 25%. Additionally, the rebate under Section 87A has also been increased, enabling individuals with taxable incomes up to Rs 7 lakh to effectively pay no taxes if opting for the new tax regime. Although the default option for taxpayers will be the new tax regime, individuals can choose to stay in the old tax regime.
The new tax regime has revised income tax slabs and rates, with no tax on income up to Rs 3 lakh, and rates ranging from 5% to 30% on different income brackets. A 4% cess will be added to the income tax payable, and surcharge will apply on taxable incomes exceeding Rs 50 lakh. These changes take effect from April 1, 2023, for FY 2023-24, and employers will assume that employees have opted for the new regime unless otherwise specified.
For the current year (FY 2022-23), taxpayers may choose the existing new or old tax regime when filing returns, with different slabs and rates applicable. Cess at 4% and a rebate under Section 87A are available in both tax regimes.
The online Income Tax calculator is available for easy access to Individual/HUF/AOP/BOI/Artificial Juridical Person (AJP) as per the proposed section 115BAC under Finance Bill, 2023. You can find the direct link below for your convenience.