Income Tax Calculator – Old vs New Regime
Here's a comparison table detailing the differences between the Old and New Income Tax Regimes in India. The table covers critical aspects, such as tax rates, deductions, exemptions, and other significant features:
| Category | Old Regime | New Regime (2023-24) |
|---|---|---|
| Tax Rates | Progressive slabs (5%, 10%, 15%, 20%, 30%) based on income brackets | Lower slabs (5%, 10%, 15%, 20%, 25%, 30%) but with no major deductions or exemptions |
| Income Brackets | ₹2.5 lakh to ₹5 lakh (5%), ₹5 lakh to ₹10 lakh (20%), above ₹10 lakh (30%) | ₹0 to ₹2.5 lakh (Nil), ₹2.5 lakh to ₹5 lakh (5%), ₹5 lakh to ₹7.5 lakh (10%), up to ₹15 lakh (30%) |
| Standard Deduction | ₹50,000 available for salaried individuals and pensioners | ₹50,000 available for salaried individuals and pensioners (from FY 2023-24 onwards) |
| Deductions Under Section 80C | Up to ₹1.5 lakh deduction on investments like PPF, NSC, ELSS, life insurance premium, etc. | Not available |
| Section 80D - Health Insurance | Deduction available on health insurance premiums paid (up to ₹25,000 or ₹50,000 for seniors) | Not available |
| House Rent Allowance (HRA) | Exemption available on HRA as per prescribed limits | Not available |
| Leave Travel Allowance (LTA) | Exemption on LTA available as per certain conditions | Not available |
| Home Loan Interest Deduction | Deduction on home loan interest (up to ₹2 lakh) under Section 24 | Not available |
| NPS Contribution Deduction | Additional deduction of ₹50,000 under Section 80CCD(1B) on NPS contributions | Not available |
| Standard Deduction for Family Pension | Deduction of ₹15,000 on family pension | Not available |
| Rebate Under Section 87A | Rebate up to ₹12,500 for taxable income up to ₹5 lakh | Rebate up to ₹25,000 for taxable income up to ₹7 lakh |
| Tax Calculation Complexity | More complex due to various exemptions, deductions, and allowances | Simpler due to fewer exemptions and deductions |
| Who Should Opt | Beneficial for those with high deductions, exemptions, and investments | Beneficial for taxpayers with no or minimal deductions and investments |
| Flexibility | Allows more tax-saving options via investments | Less flexibility due to limited deductions and exemptions |
| Applicability | Taxpayers can choose between the Old and New Regime each year (subject to conditions for salaried) | Taxpayers can switch back and forth each year if salaried, but businesses have more restrictions |
| Goal of Regime | Encourages saving and investment by offering tax incentives | Aims for simplified compliance and lower tax rates without conditions |
This table summarizes the primary differences between the Old and New Tax Regimes, helping taxpayers choose based on their financial situation, deductions, and investment habits.