Income Tax Calculator

The new regime is generally better if your total deductions under the old regime are less than Rs 2 to 2.5 lakh. If you have significant investments in PPF, ELSS, home loan interest, HRA, and health insurance totaling above Rs 3 lakh, the old regime likely saves you more tax. For someone earning Rs 15 lakh with no deductions, the new regime saves about Rs 46,000 in tax. But the same person with Rs 3.5 lakh in deductions saves about Rs 28,600 more under the old regime. The break-even point shifts every year with slab changes, so calculate both options annually rather than assuming last year choice still applies. Salaried employees can choose differently each year, but business income taxpayers can switch back to the old regime only once.

The new tax regime introduced in FY 2023-24 includes a standard deduction of Rs 75,000 for salaried employees and pensioners, making the effective zero-tax limit Rs 7.5 lakh instead of Rs 7 lakh. Contributions to NPS under Section 80CCD(1B) up to Rs 50,000 are also allowed. Employer contributions to NPS under 80CCD(2) are deductible up to 14 percent of basic salary for central government employees and 10 percent for others. Family pension deduction of Rs 25,000 and Agniveer Corpus Fund contributions are also permitted. However, the popular deductions like 80C, 80D, HRA, home loan interest, and LTA are not available under the new regime.

Your employer calculates TDS based on your estimated annual income minus declared deductions and exemptions. They apply the appropriate slab rate and deduct tax equally over the remaining months of the financial year. If you declare your deductions and investments on time, your employer adjusts the TDS accordingly, reducing your monthly tax deduction. If you fail to declare investments by the employer deadline, you can still claim the refund when filing your ITR. You can also request your employer to use the new regime if it benefits you, or opt for the old regime if you have substantial deductions. Any under-deducted TDS results in a tax demand you must pay before filing returns.

If your total tax liability exceeds Rs 10,000 in a financial year, you are required to pay advance tax in quarterly installments. The due dates are 15 percent by June 15, 45 percent by September 15, 75 percent by December 15, and 100 percent by March 15. Failure to pay advance tax on time attracts interest under Sections 234B and 234C of the Income Tax Act, calculated at 1 percent per month on the shortfall. For example, if you should have paid Rs 50,000 by September but paid only Rs 20,000, you would owe interest on the Rs 30,000 shortfall. Salaried employees usually do not need to worry about advance tax because employer TDS covers the liability, but those with significant non-salarry income like rental or capital gains must manage advance tax themselves.

For individual taxpayers, the ITR filing deadline is typically July 31 following the end of the financial year, extended to October 31 for taxpayers requiring audit, and November 31 for transfer pricing cases. Filing after the deadline but before December 31 incurs a late fee of up to Rs 5,000 under Section 234F, reduced to Rs 1,000 if total income is below Rs 5 lakh. Belated returns filed after December 31 but before the end of the assessment year incur higher fees and lose certain benefits like the ability to carry forward business losses. Filing on time also ensures faster processing of any refund you may be eligible for.