Calculating income tax also allows you to claim tax deductions for certain expenses.
The tax calculator is live on the Income Tax Department portal.
The Income Tax Department on Monday released a ‘tax calculator’ aimed at helping taxpayers decide whether the new income tax regime has been announced or not. budget 2023 Good for him/her or if old 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 115BAC is now available with IT Dept. The website can be viewed by the tax department.
Why is it necessary to pay income tax?
Payment of income tax is a legal requirement in most countries including India. Income tax is a way of contributing to society and helping to fund public services such as schools, hospitals, roads and other infrastructure. Paying your share of tax ensures that these services are available to all.
What is an online income tax calculator?
Income tax calculator is an online tool that helps in estimating taxes based on the income of an individual. Individuals falling under the taxable income bracket are liable to pay a specific portion of their net annual income as tax.
Calculating your income tax helps you budget your finances. Knowing how much tax you have to pay will help you plan your expenses and save money accordingly. This helps you avoid overspending and getting into debt.
Calculating income tax also allows you to claim tax deductions for certain expenses.
As per the Budget 2023 announcement, taxpayers opting for the new regime will get exemption if their income does not exceed Rs 7 lakh per annum.
The finance minister also allowed standard deduction of Rs 50,000 under the new regime which was already available in the old tax regime. The basic exemption limit has been increased from Rs 2.5 lakh to Rs 3 lakh. The old tax regime prescribed a basic exemption limit of Rs 2.5 lakh.
The move will save Rs 33,800 for those earning up to Rs 7 lakh annually and opting for the new tax regime. Those earning up to Rs 10 lakh will save Rs 23,400 and those earning up to Rs 15 lakh will save Rs 49,400.
How to calculate income tax from IT department’s tax calculator?
The tax calculator is live on the Income Tax Department portal.
Tax Calculator: Old Regime Vs New Regime: When someone logs in to the IT department portal, it asks for the following information;
-tax pair type
-Male/Female/Senior Citizen/Very Senior Citizen
-residential status
Income other than salary and special rate income
Interest on self-occupied house property
Deduction allowed under both the regimes i.e. 80CCH(2), 80CCD(2), 80JJAA, family pension deduction under section 57(iia)
Deductions/exemptions (other than those mentioned above) are not eligible in the new tax regime
As soon as you enter the above details, the portal will populate the number representing under the old and new tax regimes.
The department has also underlined the disclaimer saying that the calculator is only meant to provide quick and easy access to basic tax calculations to the public and does not claim to give correct tax calculations in all circumstances. It is advised that the exact computation may be done in accordance with the provisions contained in the relevant Acts, Rules etc. for filing the return.
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