Income Tax Regime Comparison Calculator
Compare your tax liability under the Old Regime and New Regime of Indian Income Tax to pick the optimal choice.
Tax Regime Head-to-Head
Compare the tax structures under both regimes to make an informed filing choice:
Old Regime Tax
Calculated tax liability after deducting investments like 80C, HRA, and health insurance.
New Regime Tax
Tax liability with simplified lower tax slabs and fewer exemption claims.
Net Savings
The difference between the two regime taxes, highlighting the cheaper option.
How is it calculated?
Tax = \sum (Income\,in\,Slab \times Slab\,Rate)Tax is calculated by dividing taxable income (after standard deductions and exemptions) into respective tax slabs and applying the slab rates.
Worked Examples
Tax Comparison for ₹12 Lakh Annual CTC
Under the New Regime, standard deductions apply. Under the Old Regime, you can claim 80C, 80D, and HRA exemptions. Compare the net tax side-by-side to save maximum money.
Exemptions Impact
If you have deductions exceeding ₹3.75 Lakhs (80C, 80D, HRA, Home Loan Interest), the Old Regime is often more beneficial.
Income Tax Regime Comparison Guide (Old vs. New Slab)
The Indian Income Tax Structure
In India, individual taxpayers can choose between two main tax structures to calculate their annual income tax liability: the Old Tax Regime and the New Tax Regime. Choosing the right regime is essential to maximize your take-home pay and optimize tax savings.
The Old Regime features higher tax rates but allows a wide range of deductions and exemptions (such as Section 80C, 80D, HRA, and home loan interest). The New Regime offers simplified, lower tax slab rates but withdraws almost all exemptions.
How to Compare Regimes Using the Tax Calculator
To compare your tax liability under both regimes, enter your gross annual salary, other income sources (like interest or capital gains), and the tax deductions you plan to claim (80C investments, health insurance, etc.).
The calculator will compute your taxable income for both regimes, apply the standard deductions, map your income to the respective slab rates, and show a clear side-by-side comparison of the tax payable. This helps you identify which regime saves you more money.
The Mathematical Logic of Progressive Tax Slabs
Tax is calculated progressively across income slabs, rather than applying a single rate to your entire income. The formula is:
Tax = Sum of (Income in Slab * Slab Rate) + 4% Health & Education Cess
Under the New Regime (as updated in recent budgets), no tax is payable for taxable income up to ₹7 Lakhs due to rebate provisions under Section 87A. For higher incomes, standard tax slabs of 5%, 10%, 15%, 20%, and 30% are applied incrementally after deducting the flat standard deduction of ₹75,000.
Old vs. New Regime: The Break-Even Point
The choice depends on your investment levels. If your total tax-deductible investments (80C, HRA, 80D, Home Loan interest) exceed ₹3.75 Lakhs, the Old Regime is generally cheaper.
If your investments are low (e.g., you do not want to lock up money in tax-saving schemes), the New Regime is more beneficial due to its lower slab rates. This tool computes your unique break-even investment point.
Frequently Asked Questions
What is standard deduction on salary?
Can I switch between the Old and New tax regimes every year?
What are the main deductions available under the Old Tax Regime?
Results are estimates and should not be considered financial advice.