To help taxpayers decide between the new and old income tax regime, the income tax department has launched a tax calculator. “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 can now be accessed on the income tax department website,” it said in a tweet on Monday.
The calculator will help taxpayers decide their tax liability based on the modifications proposed in the new tax regime in the Union Budget 2023-24. It comes well in advance of the new financial year starting April 1 and will enable assesses to inform their employers about their choice of tax regime and help in correct deduction of tax at source.
To popularise the new concessional income tax regime, finance minister Nirmala Sitharaman had in the Union Budget 2023-24 announced changes to make it more attractive to taxpayers. These include reduction in the number of slabs to five, increase in the tax exemption limit to Rs 3 lakh and a higher income tax rebate limit to Rs 7 lakh in the new tax regime. The benefit of standard deduction has also been extended to the new tax regime. The old income tax regime continues as it is and taxpayers have the option to move to the new exemption less concessional tax regime if they find it more attractive.