Income tax planning is one of the most important yet confusing aspects of personal finance for salaried Indians. Since the introduction of the new tax regime in Budget 2020, taxpayers face an annual dilemma—should they stick with the old regime that offers numerous deductions but higher tax rates, or switch to the new regime with lower rates but minimal deductions? The choice you make can result in a difference of tens of thousands of rupees in tax liability, making it crucial to calculate accurately rather than guessing or following generic advice. Our comprehensive income tax calculator eliminates this confusion by computing your tax liability under both regimes side-by-side, clearly showing which option saves you more money based on your specific income and investment profile.
Understanding India's income tax structure requires navigating a complex web of tax slabs, surcharges, cess, standard deductions, and various exemptions under multiple sections of the Income Tax Act. The old tax regime, which most taxpayers are familiar with, operates on a progressive slab system where income up to ₹2.5 lakhs is tax-free, then taxed at 5% up to ₹5 lakhs, 20% up to ₹10 lakhs, and 30% beyond that. However, this regime offers substantial relief through deductions—₹1.5 lakhs under Section 80C for investments in PPF, ELSS, life insurance, and EPF; ₹25,000 to ₹50,000 under Section 80D for health insurance premiums; HRA exemption for rent paid; home loan interest deduction up to ₹2 lakhs; and numerous other provisions that can collectively reduce your taxable income by several lakhs.
The new tax regime introduced a simplified structure with lower tax rates—no tax up to ₹2.5 lakhs, 5% from ₹2.5-5 lakhs, 10% from ₹5-7.5 lakhs, 15% from ₹7.5-10 lakhs, 20% from ₹10-12.5 lakhs, 25% from ₹12.5-15 lakhs, and 30% beyond ₹15 lakhs. The attractive lower rates come with a significant trade-off—most deductions and exemptions are not available under this regime. You can't claim 80C, 80D, HRA exemption, standard deduction, or home loan interest. The only deductions permitted are employer's NPS contribution and standard deduction of ₹50,000. This creates a critical decision point: taxpayers with significant investments and deductions benefit more from the old regime, while those with minimal deductions might save more under the new regime's lower rates.
Our tax calculator becomes invaluable in making this choice objectively. Rather than relying on thumb rules or incomplete online advice, you input your actual income, HRA received and rent paid, investments under Section 80C, health insurance premiums, home loan interest, and other relevant details. The calculator then computes your exact tax liability under both regimes, accounting for standard deduction, surcharge (for high incomes), and 4% cess. Within seconds, you see a clear comparison showing which regime results in lower tax, by how much, helping you make an informed decision. This is particularly valuable because the optimal choice isn't universal—it depends entirely on your individual circumstances. A young professional with minimal investments might benefit from the new regime, while someone with home loan EMIs, children's school fees, and regular mutual fund SIPs might save significantly more under the old regime.
Beyond just regime comparison, our calculator serves as a comprehensive tax planning tool throughout the financial year. Use it at the beginning of the year to estimate your annual tax liability and plan monthly or quarterly tax-saving investments to avoid last-minute scrambling in March. Calculate how much additional Section 80C investment you need to maximize tax savings. See the impact of switching from employer-provided HRA to the standard deduction. Model the tax implications of a salary raise or job switch before making career decisions. For business owners and freelancers, estimate advance tax requirements to avoid interest penalties. The calculator transforms income tax from a mysterious annual burden into a manageable, plannable component of your financial life, helping you legally minimize tax liability while ensuring full compliance with Indian tax laws and maximizing your take-home income for wealth creation and goal achievement.
Income Tax Calculator (FY 2023-24)
Old Tax Regime
New Tax Regime
How to Use Our Income Tax Calculator
Calculate and compare your tax liability under both regimes in simple steps:
Step 1: Enter Annual Gross Income
Input your total annual gross salary before any deductions. This includes basic salary, HRA, special allowances, bonuses, and all other salary components. Don't subtract PF or any other deductions—enter the complete gross amount. You can find this in your Form 16 Part B or by multiplying your monthly gross salary by 12 and adding any bonuses received.
Step 2: Input Section 80C Investments
Enter your total investments qualifying under Section 80C, capped at ₹1.5 lakhs. This includes EPF contribution, PPF deposits, ELSS mutual funds, life insurance premiums, NSC, tax-saving FDs, principal repayment of home loan, tuition fees for children's education, and more. Add all these amounts, but don't exceed ₹1,50,000 as that's the maximum deduction allowed.
Step 3: Add Health Insurance Premium (80D)
Enter health insurance premiums paid for yourself, spouse, and children (maximum ₹25,000), plus premiums for parents if applicable (additional ₹25,000 or ₹50,000 if parents are senior citizens). This provides additional deduction beyond 80C.
Step 4: Enter HRA Details
If you live in rented accommodation, enter the annual HRA received in your salary and the actual rent paid. The calculator will compute your eligible HRA exemption based on the minimum of: actual HRA received, rent minus 10% of basic salary, or 50% of basic salary for metro cities (40% for non-metros).
Step 5: Add Home Loan Interest
If you have a home loan for a self-occupied property, enter the interest paid during the year (maximum deduction ₹2 lakhs). Don't include principal repayment here—that goes under 80C. For let-out properties, there's no limit on interest deduction, but this calculator focuses on standard salaried taxpayers.
Step 6: Compare Results
Click calculate to see your tax liability under both old and new regimes. The calculator automatically highlights which regime is more beneficial for you and shows exactly how much you save by choosing the optimal regime. Use this information to inform your tax regime choice when filing your ITR.
Features & Benefits of Our Tax Calculator
Our income tax calculator offers comprehensive features for accurate tax planning:
- Dual Regime Comparison: Automatically calculates tax under both old and new regimes, showing side-by-side comparison with clear recommendation on which saves you more money.
- HRA Exemption Calculation: Accurately computes HRA exemption using the complex formula mandated by Income Tax Act, considering all three conditions and applying the minimum automatically.
- All Major Deductions: Accounts for Section 80C (₹1.5L limit), Section 80D health insurance, standard deduction (₹50,000 in new regime), home loan interest (₹2L limit), and HRA exemption.
- Accurate Tax Slabs: Uses current FY 2023-24 tax slabs for both regimes, including proper calculation of cess at 4% on total tax liability.
- Instant Savings Calculation: Clearly shows how much tax you save by choosing the optimal regime, helping you make informed decisions worth thousands of rupees.
- Tax Planning Tool: Use throughout the year to plan investments, estimate quarterly advance tax, or model tax impact of salary changes and job switches.
These features make our calculator an essential tool for every Indian taxpayer, from first-time filers to experienced professionals managing complex tax portfolios.
Success Story: Choosing the Right Regime
"I earn ₹12 lakhs annually and everyone at my office was switching to the new tax regime, saying it has lower rates. I was about to do the same until I used CalcGST's tax calculator. I entered my income, EPF contribution (₹1.8L annually, so ₹1.5L under 80C), health insurance for my parents (₹30,000), and the rent I pay (₹15,000/month). The calculator showed that under the old regime, my tax would be ₹70,840, but under the new regime, it would be ₹95,000—that's ₹24,160 more! I would have lost almost ₹25,000 just by following the crowd without calculating. I'm sticking with the old regime and investing the saved tax money in additional ELSS funds. This calculator literally paid for my next vacation!"
— Deepak Verma, Senior Accountant, Pune
Why Choose Our Income Tax Calculator
Income tax calculation is complex, and errors can be costly—either resulting in underpayment that attracts penalties and interest, or overpayment that reduces your disposable income unnecessarily. Our calculator stands out through its commitment to accuracy, using the exact tax slabs and formulas prescribed by the Income Tax Department for FY 2023-24. Unlike simplistic calculators that ignore HRA exemption or cap calculations incorrectly, ours accounts for all major deductions and exemptions that salaried Indians commonly use. The dual regime comparison is particularly valuable in today's scenario where the optimal choice isn't obvious and varies dramatically based on individual circumstances. We present the comparison clearly without bias, letting the numbers speak for themselves. The calculator is updated annually to reflect budget changes, ensuring you're always working with current tax laws. Whether you're a young professional filing your first return, a mid-career employee optimizing tax savings, or someone nearing retirement planning final working years, our calculator provides the accurate, unbiased information you need to minimize tax liability legally while maintaining full compliance with Indian tax regulations.
Frequently Asked Questions About Income Tax Calculator
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