Old Vs New Income Tax Regime Calculator FY 24-25

What is an Income Tax Calculator?

An income tax calculator helps you easily calculate your tax liability. This calculator accurately estimates your taxes by inserting your income details and applicable deductions. It is a useful tool for all salaried individuals, freelancers, or business owners.

An income tax calculator saves time, reduces errors, and gives a clear picture of how much tax you owe or can save. It allows you to quickly calculate your taxable income and estimate your savings through deductions, rebates, and exemptions.

How to Use the Income Tax Calculator 2024

Using Policybazaar Income Tax Calculator is a simple and easy way to estimate your tax liability and plan your finances better. 

Follow the steps mentioned below to learn the use of the Policybazaar Income Tax Calculator available online:

Step 1: Visit the Policybazaar website, go to the Insurance product section, and explore the investment plans. Within this section, you'll find the “Income Tax Calculator”.

Step 2: Enter the following details in the calculator:

• Annual income (from salary and other sources)

• Interest income

• Rental income

• Capital gains

• Tax exemptions

• Tax deductions (such as investments in ELSS, PPF, life insurance, health insurance, etc.)

Step 3: After entering all the details, click the "Calculate Tax" button.

Step 4: The old vs new tax regime calculator will provide you with an estimate of the following information:

• Your net taxable income

• Tax liability for the Financial Year 2024-25 (AY 2025-26)

Step 5: You can also compare different tax-saving options and their benefits using the income tax calculator.

Step 6: Additionally, you can change the input values to see how they impact your tax liability and plan your finances accordingly.

Looking for more insights? Try our SIP Calculator.

Illustration of Income Tax Calculator 2024

Ms. Preeti, a salaried employee, earns a basic salary of Rs. 15,00,000 per annum. She lives in a rented apartment in Delhi where she pays a rent of Rs. 30,000 per month, and her company gives her a monthly HRA of Rs. 40,000 along with Special Allowances of Rs. 20,000 per month and an annual LTA (Leave Travel Allowance) of Rs. 20,000.

The Gross Total Income from the Salary of Ms Preeti under the Old and New Tax Regime will be:

Now, Ms. Preeti has an FD (Fixed Deposit) and earns an annual interest Rs. 14,000 from it. She also earns an interest income of Rs. 10,000 p.a. from her savings account. Some important investments made by Preeti to save tax are:

• ELSS (Equity Linked Savings Scheme) funds of Rs. 20,000.

• PPF (Public Provident Fund) investment of Rs. 50,000.

• Medical insurance of Rs. 15,000.

• LIC premium of Rs. 10,000.

Calculation of Income Tax under the Old Tax Regime

Calculation of Income Tax under the New Tax Regime

Income Tax Slab Rates

The income tax slabs in India highlight the taxable rate payable by you based on your annual income and earnings from all sources.

Refer to the following income tax rates for new vs. old tax regime:

***Note: The same tax rates will continue, there is no change in the rates as per Union Budget 2024.

New Tax Regime Slab Rates as of Union Budget July 2024

Income Tax Exemptions & Deductions under Old Tax Regime FY 2024-25 (AY 2025-26):

• Section 87A: You can avail of a tax rebate of up to Rs. 12,500 if you are earning Rs. 5 lakhs or below.

• Section 80C: You can avail of a tax rebate of up to Rs. 1.5 lakhs on the premium deposited for schemes like ULIP (Unit Linked Insurance Plan), Equity-Linked Saving Scheme (ELSS), and PPF (Public Provident Fund).

• Section 80CCD (1B): Under this clause, you can avail of a tax exemption of up to Rs. 2 lakhs for the premium deposited under a National Pension Scheme (NPS).

• Section 80D: Tax exemption of up to Rs. 25,000 can be availed on medical insurance premium bills for self and family. The limit may extend to Rs. 50,000 in the case of senior citizens.

• Section 80G: Any donation to charitable organizations or science & discovery can be fully exempted from taxable income under this section.

• Section 80E: The interest paid on education loans is fully exempted for up to 8 years.

• Section 80TTA/80TTB: Under Section 80TTA, the income or interest from savings accounts up to Rs. 10,000 will be waived from taxable income. At the same time, the limit extends to Rs. 50,000 for senior citizens on all forms of interest.

• Section 80GG: You can avail of tax exemption on annual payment of house rent.

• Section 10(14): Exemption for specific allowances like children's education allowance, hostel allowance, etc.

• Standard Deduction: A flat deduction of Rs. 50,000 is allowed to salaried individuals and pensioners.

• House Rent Allowance (HRA): Tax exemption on the portion of the salary received as HRA, subject to certain conditions.

• Leave Travel Allowance (LTA): Exemption for expenses incurred on domestic travel.

Income Tax Exemptions & Deductions under New Tax Regime FY 2024-25 (AY 2025-26):

If you choose the new tax regime introduced under Section 115 BAC in the Income Tax Act, 1961, you can avail of only a few of the following tax exemption and deduction benefits. Let us learn them below:

• Transport Allowance for Persons with Disabilities (PWD): Reimbursement of travel expenses incurred by PWD for commuting between place of residence and place of duty.

• Conveyance Allowance: Reimbursement of expenses incurred on conveyance in the performance of duties of an office.

• Travel/ Tour/ Transfer Compensation: Reimbursement of expenses incurred on travel, tour, or transfer.

• Perquisites for Official Purposes: Reimbursement of expenses incurred for official purposes, such as meals, accommodation, and transportation.

• Exemption for Voluntary Retirement Scheme: Income from a voluntary retirement scheme is exempt from tax.

• Gratuity Amount: The gratuity amount received on retirement or death is exempt from tax.

• Leave Encashment: The leave encashment amount received is exempt from tax.

• Interest on Home Loan on Lent-Out Property: Interest paid on a home loan for a rent-out property is eligible for deduction.

• Gifts of up to Rs. 5,000: Gifts received up to Rs. 5,000 in a year are exempt from tax.

• Employer's Contributions to Employees’ NPS Accounts: Employer's contributions to employees' NPS accounts are eligible for deduction.

• Additional Employee Costs: Additional employee costs incurred by an employer are eligible for deduction.

• Standard Deductions on Family Pension: Standard deduction is available on a family pension received by a taxpayer.

• Deductions on Deposits in Agniveer Corpus Fund: Deduction is available on deposits made in the Agniveer Corpus Fund.

To Sum Up!

The use of an income tax calculator can help you plan your finances better and make informed decisions about your investment options and tax-saving strategies. You can use this online calculator to quickly know your tax liability.