New Delhi: The Central Board of Direct Taxes (CBDT) has now given a new facility to taxpayers after Finance Minister Nirmala Sitharaman gave a big exemption on the income tax front in the budget (Budget 2023). In fact, many people are confused about the fact that which tax system would be better for them of Old Tax and the New Tax Regime? To help in this regard, the CBDT has introduced a calculator on its website.
With the help of this calculator, people will be able to easily know about their tax liability in both tax regimes and through this, they will be able to decide which tax regime is more suitable for them.
There will be no relief in the new tax regime
Changes in the new tax system are proposed to be implemented from the assessment year 2024-25 (the financial year 2023-24). These changes will be effective after the implementation of the Finance Bill 2023, which includes increasing the tax exemption from ₹ 5 lacks to ₹ 7 lacks and allowing the standard deduction. But the exemption on home loan interest payment and premium paid for health insurance will not be given.
How will this calculator work?
The calculator’s first gross salary (after deducting exempt allowances under both regimes), amount deductible/exempt from gross salary (other than the standard deduction) which is not allowed in the new regime, salary and special income rate, income other than interest Will ask for information about.
Based on these inputs the calculator will calculate the amount under old and new tax regimes. It will deduct the deductions allowed under both the categories (exemption under the old regime and standard deduction under the new regime) and receive income from salary. It will then calculate the gross income and figure out the eligible tax deductions.
Tax liability will be easily calculated
Based on all these points, this calculator will give the total tax liability under both regimes and also tell you what is your profit or loss under both tax regimes, thus helping taxpayers to choose the appropriate tax regime. Now you can take the help of a calculator by visiting this link (https://incometaxindia.gov.in/Pages/tools/115bac-tax-calculator-finance-bill-2023.aspx).
Explain that from the assessment year 2024-25 (the financial year 2023-24) the new income tax regime will be the default option. However, the option of continuing with the old tax regime will still be available to the taxpayer, but he will have to indicate his option.
