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While presenting her second Union Budget, the Hon’ble FM Nirmala Sitharaman unveiled a new income tax regime with reduced income tax rates. However, under the new regime, which will be optional, taxpayers will not be able to avail of all of the deductions and exemptions that are available in the present income tax regime. This created confusion in the minds of taxpayers about whether to stick with the old tax regime or pay income tax returns under the new tax regime. To simplify the process for taxpayers and to help them make an informed decision the IT department on Thursday launched an e-calculator for individuals to estimate and compare their tax liability under the new tax regime as compared to the old tax regime.
The E-calculator launched by the Income Tax Department
offers a comparison table to compare taxes in the old and new tax regime for
resident individuals. E-Calculator has been hosted on the official e-filing
website of the Income Tax department. The web portal is otherwise used for
filing e-ITRs by individuals and other categories of taxpayers. The disclaimer
posted on the link reads “This calculator is only meant to provide a basic idea
of the estimated impact of the new provisions. Refer to the Income Tax
provisions for actual provisions and eligibility.”
The e- calculator launched will largely give three broad results based on the financial data entered into it by the taxpayer. It shall brief the user about the tax benefit as per the new tax regime. The user can also gather information about tax benefits as per the existing tax regime and finally, the calculator shall help the user to make a wise and informed choice between old and new tax regimes. The calculator, once fed with data, instantly informs the user about the actual amount of money that he can save by opting either of the two tax regimes.
Table of Contents
The Income Tax Department has divided taxpayers into three age categories of normal citizens (below 60 years), senior citizens (60-79 years) and super senior citizens (above 79 years). All these three categories of taxpayers can add in their estimated annual income, total eligible deductions and exemptions to find out what will be their total taxable income if they continue with the old tax regime or opt for the new tax regime (which doesn’t allow any deductions and exemptions).
The E-Calculator also takes into account the eligible
exemptions and deductions as proposed under the new tax regime
The new tax regime as unveiled by the FM in her budget
speech is optional. However, the taxpayers will have to forego various tax
exemptions available in the old regime. This created confusion in the minds of
taxpayers about whether to stick with the old tax regime or pay income tax
returns under the new tax regime. The launch of e-calculator by the Income-tax
Department will help the users to make an informed decision while choosing
between old and new tax regime. Once the taxpayer adds in the required data in
the calculator, it instantly informs the user about the actual amount of money
that he can save by opting either of the two tax regimes.
Read, Also: How to Claim Income Tax Refund Online?
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