Income Tax Calculation: Old vs New Regime
Income Tax is a direct tax levied by the government on an individual's income. The Indian Government recently introduced a New Tax Regime with lower overall slab rates but without most of the tax deductions natively available in the Old Tax Regime (like 80C, 80D, HRA). This calculator directly checks both systems against your custom deductions to output the one that saves you maximum absolute tax.
Core Math/Formula: Total Tax = Tax on Slab Amounts + 4% Health & Education Cess (Minus Section 87A Marginal Rebates limit)
Common FAQs
What is the Standard Deduction?
The Standard Deduction is a flat ₹50,000 allowance deducted immediately from your gross salaried income before calculating tax. It applies seamlessly to both the Old and New Regime.
Is the New Tax Regime better?
Usually, if you do not have significant high-limit deductions like massive Home Loan Interest, HRA, and full ₹1.5L 80C deductions, the New Tax Regime's wider slabs result in a lower total tax payout. Additionally, income up to ₹7,00,000 under the New Regime fetches an 87A rebate dropping tax identically to 0.