The new tax regime introduced in India offers a simplified tax structure with potentially lower tax liability for many taxpayers.
Here's a breakdown of how to calculate your income tax under the new regime after the revisions implemented in Budget 2024:
New Tax Regime Income Tax Calculator FY 2024-25
Increased Standard Deduction
Good news! Budget 2024 increased the standard deduction from Rs. 50,000 to Rs. 75,000. This reduces your taxable income, potentially lowering your tax burden.
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| New Tax Regime Calculation |
Revised Tax Slabs
The new tax regime has revised tax slabs for the financial year 2025-26 (assessment year 2026-27):
- Up to Rs. 3 lakh: Nil (No Tax)
- Rs. 3 lakh to Rs. 7 lakh: 5%
- Rs. 7 lakh to Rs. 10 lakh: 10%
- Rs. 10 lakh to Rs. 12 lakh: 15%
- Rs. 12 lakh to Rs. 15 lakh: 20%
- Above Rs. 15 lakh: 30%
Here's How to Calculate Your Tax
- Calculate Your Gross Income: Add up all your taxable income sources like salary, interest income, rental income, etc.
- Deduct Standard Deduction: Subtract the new standard deduction of Rs. 75,000 from your gross income.
- Calculate Taxable Income: This is your gross income minus the standard deduction.
- Identify Your Tax Slab: Find the tax slab your taxable income falls under (refer to the revised slabs above).
- Apply Tax Rate: Multiply your taxable income by the corresponding tax rate for your slab.
Important Notes
- This is a simplified calculation. You may need to consider other factors like additional deductions, exemptions, and surcharges depending on your specific situation.
- For a more accurate calculation, consider using an online tax calculator or consulting a tax professional.
Benefits of New Tax Regime
- Simpler Calculations: The new regime eliminates the need to claim and track various deductions, simplifying tax filing.
- Potentially Lower Tax: The revised slabs and increased standard deduction can lead to lower tax liability for many taxpayers.
Is the New Regime Right for You?
While the new regime offers benefits, it's important to compare it with the old tax regime to see which one offers you a lower tax liability. You can find tax calculators online that allow you to compare both regimes based on your income and deductions.
Disclaimer: This article is for informational purposes only. For personalized tax advice, consult a qualified tax professional. For official information on the revised tax slabs and other tax regulations, visit the Central Board of Direct Taxes (CBDT) website.