Income Tax Calculator: Choose the Best Tax Regime for Maximum Savings
If you’re planning your taxes, it’s important to know whether the new tax regime or the old one will benefit you more. To help with this, the Income Tax Department has introduced an updated Income Tax Calculator, allowing taxpayers to estimate their tax liability and potential savings.
With the Budget 2025 changes, income up to Rs 12 lakh will now be tax-free, bringing significant relief to many taxpayers. This means that depending on your income level, you could pay less tax or even no tax at all.
New Income Tax Calculator for FY 2024-25 and FY 2025-26
After the latest changes in the new tax regime, tax liability for many individuals will be reduced. To simplify tax calculations, the government has launched a new Income Tax Calculator. This tool is available for the financial years 2024-25 and 2025-26, helping you determine:
- How much tax you need to pay under the old and new regimes.
- The exact amount you can save by choosing the right tax regime.
- A clear comparison of tax liabilities based on the latest tax slabs.
How to Use the Income Tax Calculator?
Using the calculator is simple and provides instant results. Here’s how you can check which tax regime is better for you:
- Select Your Residential Status – Choose whether you are a resident or non-resident taxpayer.
- Enter Your Taxable Income – Input your total taxable income, including salary, business earnings, or other sources.
- View Tax Breakdown – The calculator will display a detailed tax comparison for the current financial year (FY 2024-25) and next financial year (FY 2025-26) based on the Budget 2025 tax rules.
- Check Your Tax Savings – You will see how much you can save by choosing the most suitable tax regime.
For example, if your taxable income is Rs 15 lakh, the calculator will show whether you pay less tax under the old or new tax slabs.
Where to Access the Income Tax Calculator?
The official Income Tax Calculator is available on the Income Tax Department’s website. You can use it for free by visiting this link:
👉 Income Tax Calculator : click here
New Tax Regime Slabs and Rates
With the revised tax structure, here’s how income will be taxed under the new regime:
| Income Range (Rs) | Tax Rate (%) |
|---|---|
| 4 – 8 lakh | 5% |
| 8 – 12 lakh | 10% |
| 12 – 16 lakh | 15% |
| 16 – 20 lakh | 20% |
| 20 – 24 lakh | 25% |
| Above 24 lakh | 30% |
Available Deductions and Exemptions
While the new tax regime offers lower tax rates, deductions and exemptions are limited. However, some benefits remain:
- Standard Deduction for Salaried Employees – Up to Rs 75,000
- Employer’s Contribution to NPS (National Pension System) Tax-Free – Under Section 80CCD(2), contributions to a Tier-1 NPS account are tax-free, with a deduction of up to 14% of the basic salary.
Final Thoughts
Choosing the right tax regime can lead to significant savings. The Tax Calculator makes it easy to compare both options and decide which one is more beneficial for you. With income up to Rs 12 lakh now tax-free, many taxpayers can enjoy a lighter tax burden starting April 1, 2025.
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