In this article, we have tried to done the scenario analysis of Tax Payable under both Old and New Tax Regime considering the various combinations of Income along with Deduction eligibility of the Taxpayer. Based on the analysis of the scenarios, we have also derived the conclusions so that Taxpayers can make the informed choice.
Further, we have also designed the Income Tax Calculator (both Summary and Detailed for the actual computation of Income Tax Liability of the Taxpayer.
Scenario Analysis: (Explanation is given after Calculator)
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Summary Scenario Analysis Calculator (Detailed Calculator is given in next section)
In case Deduction or Exemption under old Tax Regime apart from Standard Deduction is only up to Rs. 2 Lakhs like on Section 80C or otherwise, New Tax Scheme will be preferred in every scenario.
In case, Deduction or Exemption under Old Tax Regime is Rs. 3 Lakhs including of interest set off on house property from Salary: In this case, if Gross Income is less than Rs. 10 Lakhs, Old Regime is beneficial and in case, Gross Income is more than Rs. 10 Lakhs, New Regime is beneficial.
In case Deduction or Exemption under Old Tax Regime is Rs. 4.25 Lakhs like for 80C, NPS, interest from housing loan etc.: In this case, if Gross Income is less than Rs. 12.25 Lakhs, Old Regime is beneficial and in case, Gross Income is more than Rs. 12.25 Lakhs, New Regime is beneficial.
In case Deduction or Exemption under Old Tax Regime is Rs. 4.75 Lakhs like for 80C, NPS, interest from housing loan, exemption on account of LTC etc.: In this case, Old Tax Regime is always beneficial, however if income is more than Rs. 15.75 Lakhs, difference is of only Rs. 2500 between Old Tax Regime and New Tax Regime.
For actual calculation, you may please refer the above summary calculator or the Detailed Calculator as provided in next section.
Detailed Calculator
We have also designed the detailed Income Tax Calculator for the convenience of Taxpayers, We have also incorporated HRA & Deduction Calculator also in this for the benefit of Taxpayers:
*Tax is calculated excluding of surcharge and Education Cess of (4%). Surcharge is applicable when Total Income exceeds 50 Lakhs.
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Notes
In the row of Other Allowances, other income if any may also be filled.
You can apply Excel Formulas in Cells while punching figures like Add, Minus, Multiply, Divide etc.
We have incorporated HRA Calculator also for the convenience of Taxpayers, Metro City Means: Bombay, Delhi, Kolkata & Madras, Please select Yes or No from Drop Down.
In case of Rent-out Property, borrowing cost can be deducted from the Rental Income, however any loss from income from house property can not be adjusted from Salary Income under New Scheme.
Maximum Additional Deduction for NPS is 50000 under 80CCD(1B) under Old Scheme.
Tax is excluding Surcharge and Cess.
Option shall be exercised for every year in case where individual does not have business income, for others once exercised for New Scheme will not be allowed to change in subsequent Years.
Disclaimers:
Though we have exercised due care in designing the article and calculator for academic purpose, you are advised to consult your Tax Adviser before taking any decision.
We request you to share any discrepancy in the calculator to our Notice in the comment section.
We have taken due care to the best of our knowledge while explaining the provisions surrounding the issue purely for informational/academic purpose. It should not be considered as professional advice or consultancy to be relied upon. While due care has been taken by Fab Gyan in preparing this article, certain mistakes and omissions may creep in. The Fab Gyan or its Author does not accept any liability for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any actions taken in reliance thereon.
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