E-calculator to compare IT in old and new regime launched

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NEW DELHI: The Income Tax Department has launched an e-calculator for individuals to estimate and compare their tax liability under the new tax slabs as compared to the existing regime.

 

The calculator, with a comparative table to compare taxes in the old and the new tax regime without claiming deductions and exemptions, for resident individuals (financial year 2020-21) has been hosted on the official e-filing website of the department.

Taxpayers in three age categories of normal citizen (below 60 years), senior citizen (60-79 years) and super senior citizen (above 79 years) can punch in their estimated annual income from all sources, total eligible deductions and exemptions to see what will be there total taxable income if they continue in the old regime or opt for the new one, said a report in Livemint.

The calculator takes into account eligible exemptions and deductions, as proposed under the new regime, after being extracted from the Budget memorandum 2020.

In the new personal income tax regime, 5 per cent tax is levied on an annual income between Rs.2.5 lakh to Rs.5 lakh. The tax rate rises to 10 per cent, 15 per cent, 20 per cent and 25 per cent for every Rs.2.5 lakh addition. A 30 per cent tax is charged for income over Rs.15 lakh.

The old or the existing income tax rate regime allows a standard deduction of Rs.50,000 and investment of Rs.1.5 lakh in saving schemes with a rate of 5 per cent, 10 per cent or 30 per cent tax depending on various income levels.

The calculator, launched earlier in the day, was updated by the department in the evening to make it more "user friendly". It largely gives the user three broad results based on the kind of individual financial data fed into it, a senior official was quoted by News18 as saying.

The calculator, once fed with data, also inform the user about the actual amount of money that can be saved by opting either of the two regimes.

"This calculator is only meant to provide basic idea of the estimated impact of the new provisions. Refer to the Income Tax provisions for the actual provisions and eligibility," a disclaimer posted on the link said (with inputs from PTI).

Image Credit: Money Control

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