New Income Tax Regime, Income Tax Calculator: The Income Tax department has released a “tax calculator” to assist taxpayers in calculating the tax and determine which tax regime they are comfortable with. The new income tax system was proposed in the Budget 2023 by the Finance Minister Nirmala Sitharaman.
A tweet from the tax department stated that a dedicated tax calculator is available on the website of Income tax to compare the old and new tax regimes for individuals and for everyone as per Section 115 BAC.
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What exactly is an online tax calculator?
Depending on a person’s income, taxes can be calculated with the use of an internet tool called an income-tax calculator. Taxes on those in the taxable income bracket must equal a predetermined portion of their net annual income.
Pros of Tax Calculator
- One may create a financial budget by calculating your income tax.
- One can budget their spending and make appropriate savings decisions when one knows how much tax one will need to pay.
- One can prevent going into debt and overspending by doing this.
- One can claim tax deductions for particular costs when figuring up income tax.
The finance minister approved a baseline deduction of Rs 50,000 under the current tax system, which was also available under the old one. For individuals who choose the new tax system and earn up to Rs 7 lakh yearly, the decision will result in savings of Rs 33,800. Savings of Rs 23,400 would be made for incomes up to Rs 10 lakh, and Rs 49,400 would be made for incomes up to Rs 15 lakh.
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How to use a tax calculator in the IT department to calculate income tax?
The following information will be asked for after logging into the portal:
-Type of Taxpayer
-Male, Female, Senior, or Super Senior Citizen
-Status as a residence
-Income not from Salaries and Special Income
-Interest in Property with Self-Occupied property
-Deductions permitted under both regimes, including section 57’s family pension deduction and sections 80CCH(2), 80CCD(2), and 80JJAA (iia)
The portal will display the figure under both the old and new tax regimes as soon as you submit the aforementioned information.