Tax Concepts
Old vs New Regime: How the slabs work?
The New Regime (Default) has lower tax rates but fewer deductions. The Old Regime has higher rates but allows you to reduce your taxable income using sections like 80C, 80D, and HRA.
How Deductions Reduce Tax (Old Regime)
Deductions are subtracted from your Gross Income to arrive at Taxable Income.
- Gross Income: ₹10,00,000
- Less 80C (EPF/LIC): -₹1,50,000
- Less Standard Deduction: -₹50,000
- Taxable Income: ₹8,00,000 (Tax is calculated on this amount)
FAQs
Which tax regime is better for me?▼
Generally, if your total deductions (80C + 80D + HRA + Home Loan) exceed ₹3.75 Lakhs, the Old Regime might save you more tax. Otherwise, the New Regime is usually better.
Does this calculator include Cess?▼
Yes, a 4% Health & Education Cess is automatically added to your calculated income tax as per government rules.
Is Standard Deduction available in New Regime?▼
Yes! From FY 2025-26 onwards, the Standard Deduction for salaried employees in the New Regime has been increased to ₹75,000.
⚠️ Disclaimer: This tool provides an estimate based on current tax laws. Actual liability may vary due to surcharges or specific complex rules. Please consult a CA for filing returns.