Old Regime Tax Liability
₹ 1,17,000.00
New Regime Tax Liability
₹ 1,17,000.00
Total Deductions Claimed (Old)
₹ 4,25,000.00
Recommended Choice
Equal / Evaluate
Optimized Annual Tax Liability
₹ 1,17,000.00
About the Tax Planning & Optimization Tool
Our free Tax Planning & Optimization Tool helps salaried professionals and individual taxpayers in India compare tax liabilities between the Old Tax Regime and the New Tax Regime, while maximizing deductions across key sections like 80C, 80D, NPS, and home loan interest.
How Indian Income Tax Is Calculated & Optimized
Income tax calculation depends on whether you opt for tax exemptions or lower individual slab rates:
- Old Tax Regime: Allows standard deduction plus major tax-saving deductions (such as Sec 80C up to ₹1.5L, 80D health insurance, NPS 80CCD(1B) up to ₹50k, and home loan interest under Sec 24b up to ₹2 Lakhs).
- New Tax Regime: Features concessional tax slabs and a standard deduction of ₹75,000, but does not permit traditional exemptions and deductions.
The total tax payable includes applicable income tax plus a 4% Health and Education Cess on the computed tax.
How to Use the Calculator
Simply enter your income and eligible deduction details:
- Gross Annual Salary / Income: Your total yearly taxable earnings before deductions.
- Section 80C, 80D, NPS, & Home Loan Interest: Input your eligible tax-saving investments and expenses.
Click the Optimize Tax button to instantly view your Old vs New regime tax liabilities, total deductions claimed, and the recommended tax regime choice.
Frequently Asked Questions (FAQs)
Which tax regime is better: Old or New?
If your total eligible deductions exceed approximately ₹3.5 to ₹4 Lakhs (depending on income brackets), the Old Tax Regime generally results in lower tax liability. Otherwise, the New Tax Regime is usually more beneficial due to lower slab rates.
What is the standard deduction under the New Tax Regime?
The standard deduction is ₹75,000 for salaried individuals under the New Tax Regime (and ₹50,000 under the Old Regime).
Can I switch between the Old and New tax regimes every year?
Yes, individuals with salaried or non-business income have the flexibility to choose either the Old or New tax regime every financial year when filing their Income Tax Return (ITR).
