Want to Compare Income Tax in Old & New Regime? Here's an e-Calculator Launched by Govt

New Delhi: The Income Tax Department on Thursday 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, for resident individuals (financial year 2020-21) has been hosted on the official e-filing website of the department.

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 said.

It will either tell the user about the tax benefit as per the new regime (as proposed in the Union Budget), tax benefit as per the existing or old system, and lastly if tax outflow for the user is the same in both the old and the new regime.

This will help an individual take an informed decision of opting either the tax slab while filing their income tax return (ITR) next year.

Taxpayers in three age categories of normal citizen (below 60 years), senior citizens (60-79 years) and super senior citizen (above 79 years) can punch in their estimated annual income, total eligible deductions and exemptions to see what will be their total taxable income if they continue in the old regime or opt for the new one which will not allow any deductions and exemptions.

The calculator, once fed with data, promptly informs 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.

In the new personal income tax regime as proposed by Union Finance Minister Nirmala Sitharaman in her Budget speech on February 1, 5% tax is levied on an annual income between Rs 2.5 lakh to Rs 5 lakh. The tax rate rises to 10%, 15%, 20% and 25% for every Rs 2.5 lakh addition. A 30% 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%, 10% or 30% tax depending on various income levels.