Old vs New tax regime:
There is no single answer to this. Prima facia, it can be seen that taxpayers who do not have many deductions to claim can opt for the new regime, and those who have substantial deductions to claim resulting in lower tax can continue with the old regime.
Looking at the reduction in the tax rates in the new regime, the first reaction would be that the new system looks better. However, with these cuts, someone with Rs 7.5 lakh income will have to pay Rs 25,000 and for those who are earning Rs 10 lakh income, the tax saving will be Rs 37,500. For these savings, you will have to let go all the exemptions and deductions which might nullify these gains.
Automatic Income Tax Calculator:
In order to help taxpayers, make an informed decision by calculating and comparing their tax outgo under both the old and new tax regime, we have prepared a tax calculator in excel which can help people to get know which regime is better for them. While the new tax regime has lower income tax rates, income tax exemptions and deductions have to be foregone.
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