New Tax Regime Calculator
New Tax Regime Calculator
Introduction
The New Tax Regime Calculator estimates your tax liability under India's simplified tax regime (introduced in 2020) — offering lower rates but limited deductions.
How to Use
- Enter your Annual Gross Income
- The applicable Standard Deduction is applied automatically
- Click "Calculate" to see your tax liability under the New Regime
Formula Explanation
Income is taxed through progressive slabs (e.g., ₹0–3 lakh: nil, ₹3–6 lakh: 5%, and increasing rates beyond), without most traditional deductions like 80C, HRA, etc.
Worked Example
Consider someone earning ₹12,00,000 annually with minimal deductions. Under the New Regime, after the standard deduction, progressive slab rates typically result in a lower total tax liability compared to the Old Regime — unless they have substantial deductions like a large home loan interest claim or significant 80C investments.
Practical Context
The New Tax Regime was introduced by the government in 2020 for simplified taxation, with lower rates but without popular deductions like 80C (PPF, ELSS), HRA, and home loan interest. It's more beneficial for those who don't actively invest in tax-saving instruments, while the Old Regime suits those who do.
Frequently Asked Questions
Q1: What deductions are allowed under the New Regime?
Standard deduction (for salaried employees) and Section 80CCD(2) are among the limited deductions allowed; most traditional deductions aren't available.
Q2: Is the New Regime the default now?
Yes, since 2023-24, the New Tax Regime is the default — you must explicitly opt for the Old Regime if you prefer it.
Q3: What's the rebate limit under the New Regime?
Under Section 87A, taxable income up to ₹7 lakh qualifies for a full rebate, meaning effectively zero tax.
Q4: Can I claim HRA under the New Regime?
No, House Rent Allowance exemption isn't available under the New Regime — a key trade-off compared to the Old Regime.
Q5: Is the New Regime beneficial for everyone?
Not necessarily — individuals with significant deductions (80C, HRA, home loan interest, medical insurance) may find the Old Regime more tax-efficient, so it's worth calculating both.